The IPOX® Week - September 26, 2022
- IPOX® 100 U.S. (ETF: FPX) sheds -6.75% amid global recession fears.
- IPOX® Japan (IPJP) takes +274 bps. from S&P 500 on BOJ plan to bolster JPY.
- IPOX® SPAC (SPAC) falls with benchmarks, 1 SPAC launch this week.
- $75bn Porsche IPO debuts on Thursday, largest listing in Europe since 2011.
WEEKLY IPOX® PERFORMANCE REVIEW: The IPOX® Indexes declined last week, weighed down by fears that the ongoing policy of central bank tightening would increase the likelihood of a recession. After two consecutive weeks of relative outperformance over benchmark indexes, the IPOX® 100 U.S. (ETF: FPX) shed -6.75% to -33.15%, YTD, underperforming the S&P 500 (SPX) and Nasdaq 100 (NDX) by -212 bps. and -213 bps., respectively. While negative sentiment extended to markets abroad, we noted a strong relative outperformance of the IPOX® Japan (IPJP) against the S&P 500 (+274 bps.) after the Bank of Japan announced a program to prop up their own currency through purchases for the first time since 1998. Likewise, the IPOX® International (ETF: FPXI) also outperformed the S&P 500 by +12 bps. On the contrary, the IPOX® 100 Europe (ETF: FPXE) recorded the lowest weekly performance since the invasion of Ukraine (-9.27% to -45.39%, YTD) as the British government announced the biggest tax cuts in 50 years, fueling concerns of heightened inflation leading to higher rates and a deeper recession, which sent the British Pound closer to parity against the U.S. Dollar (GBP-USD: -5.14%).
IPOX® PORTFOLIO HOLDINGS IN FOCUS: Companies in the Energy sector led the decline among global IPOX® Portfolio Holdings amid recession fears, including hydrogen firm Everfuel (10/2020 IPO, EFUEL NO: -17.10%), solar energy equipment producer SolarEdge (10/2015 IPO SEDG US: -16.65%) as well as oil & gas firms such as Highpeak Energy (10/2021 IPO, HPK US: -16.48%) and Magnolia Oil & Gas (07/2018 IPO MGY US: -16.43%). Strong performance was seen in select health care holdings: Payment management firm Change Healthcare (06/2019 IPO, CHNG US: +7.18%) gained as U.S. DoJ loses court fight aiming to block acquisition by UnitedHealth. IPO M&A play Eli Lilly (LLY US: +0.83%) gained on analyst coverage of promising diabetes and weight loss drug Mounjaro. New holding, recent GSK consumer healthcare spin-off Haleon (HLN LN: +6.96%) led the IPOX® 100 Europe Index (ETF: FPXE) after beating earnings, while the IPOX® International Index (ETF: FPXI) was led by Indonesian super app GoTo (GOTO IJ: +9.09%) as analysts at Macquarie see +20% upside. In the U.S., the IPOX® 100 U.S. Index (ETF: FPX) was led by the recent addition of cybersecurity education provider KnowBe4 (04/2021 IPO, KNBE US: +23.93%), which surged after receiving a buyout offer by private equity firm Vista Equity.
GLOBAL IPO DEAL FLOW REVIEW AND OUTLOOK: 2 sizable IPOs launched internationally last week with the average equally weighted deal gaining +13.39% based on the difference between the final offer price and Friday’s close. Deals abroad included Malaysian REIT AME (AMEREIT MK: +1.77%) and Japanese management consulting firm FP Partner (7388 JP: +25.00%). This week, 7 sizable offers are expected to launch internationally: South Korean AI computing firm Openedges (394280 KS: $26m offer) is expected on Monday. Japan-domiciled real estate development firm Lead Real Estate (LRE US: $30m offer) plans to start trading on Nasdaq on Tuesday. On Thursday, Volkswagen’s blockbuster IPO of luxury car maker Porsche (P911 GR) aims to raise up to $8.2 billion in Germany. Other IPOs launching on Thursday include Chinese EV maker Leapmotor (9863 HK: $1b offer), China Vanke’s property management unit Onewo (2602 HK: $784m offer) and Dubai toll road operator Salik (SALIK UH: $1b offer). Video compression software developer Beamr Imaging (BMR US: $36m) to launch Friday.
Other news include: 1) New IPOX® 100 U.S. (ETF: FPX) constituent, 04/2022 IPO cybersecurity training provider KnowBe4 jumps on bid from Vista Equity. 2) Healthcare provider Cano Health (2020 IPO) explores sale after receiving buyout interest from Humana, CVS. 3) Rocket Pharmaceuticals to acquire 2021 de-SPAC, heart disease gene therapy firm Renovacor. 4) British online furniture store, 06/2021 IPO Made.com tumbles after putting itself up for sale. 5) Softbank plans for Arm-Samsung partnership fuel acquisition rumors ahead of planned IPO. 6) Ionos, PE-backed web hosting/cloud unit of German internet services firm United Internet mulls 2023 IPO at possible $5b market cap. 7) Instacart plans to focus IPO on selling employee shares. 8) South Korean $7 billion fintech K Bank gets approval for IPO. 9) German steel maker Thyssenkrupp reiterates IPO plans of hydrogen unit Nucera, albeit not in current market conditions. 10) Yogurt maker Chobani hires new CFO, says IPO option is not abandoned after withdrawing plans earlier this month. 11) CEO of MinRes’s lithium unit exits in surprise move, ahead of planned U.S. listing. 12) Credit Suisse considers split of investment bank into three parts.
THE IPOX® SPAC (SPAC) The Index, currently composed of a selected 50 high conviction plays trading at both the pre- and post-consummation stage, fell -4.98% to -20.63% YTD. IPOX® SPAC Leaders recording upside/downside moves last week include battery maker FREYR Battery (FREY US: +1.61%) rose on Morgan Stanley’s “Top Pick” recommendation, while fantasy sports and sports betting company DraftKings (DKNG US: -19.46%) slumped on broad high-growth stocks sell off. Other SPAC news from last week: 1) 3 SPACs Announced Merger Agreement include Avalon Acquisition (AVAC US: -0.20%) with financial services company The Beneficient Company Group. 2) 1 SPAC Approved Business Combination include a) AEA-Bridges Impact (IMPX US: -23.35%) with Harley-Davidson’s electric motorcycle unit LiveWire (LVWR: 9/27). 3) 4 SPACS opted to liquidate include 2 of Chamath Palihapitiya’s flagship SPACs Social Capital Hedosophia IV (IPOD US) and VI (IPOF US) both at $10.01/share. 4) 1 SPAC launched last week in the U.S.
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Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“Content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content are solely based on the user's independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer or recommend any of the services or commentary provided by any of the market commentators/educators or service providers, and any information used to execute any trading strategies are solely based on the independent analysis of the user.
