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Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government. She earned a Bachelor of… Read more
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Sonoro Gold Corp: New PEA and gold production draw nearer
Published: 10:01 23 Sep 2023
The shine has started to fade from the sparkle of big-ticket IPOs over the last couple of weeks.
Recent major IPOs, including Arm, Instacart, and Klaviyo, have shown early market performance below expectations, reflecting the challenging IPO landscape.
Despite the initial anticipation and excitement, these IPOs struggled to maintain their post-debut gains, with Instacart experiencing a nearly 10% decline, Klaviyo fluctuating around its IPO price, and Arm witnessing an 18% drop since its public offering. This performance has raised questions about the IPO market’s current health, potentially delaying future unicorn IPOs as investors recalibrate their expectations and companies reevaluate their public debut strategies.
One notable concern is the anticipation of discounts, with investors and analysts predicting down rounds and companies raising new funds at lower valuations compared to previous rounds. Traditional IPO pricing strategies, including offering shares at a discount to public peers, might need adjustment to navigate the current challenging tech IPO market. Additionally, achieving profitability and robust growth is now essential for companies eyeing IPOs, given the market’s preference for firms with strong financials and a compelling valuation.
The recent IPO trends underscore the need for a cautious and strategic approach, emphasizing financial health, growth potential, and precise pricing strategies to succeed in the IPO space.
With more big companies still eyeing IPOs by the end of 2023, investors are left wondering whether it’s worth going public.
Here’s a look at the recent IPOs making headlines over the last few weeks:
As enthusiasm wanes for recent tech initial public offerings (IPOs), with shares of Arm Holdings PLC (NASDAQ:ARM), Instacart (NASDAQ:CART), and Klaviyo retreating toward their debut prices, investors are turning to other sectors in search of the next IPO boom.
Signs point to biotechnology and retail.
Shares of newly listed tech companies Arm Holdings PLC (NASDAQ:ARM), Instacart (NASDAQ:CART) and Klaviyo have retreated following their impressive debuts, raising doubts about whether an initial public offering (IPO) market comeback is underway.
The recent IPOs have captured significant investor attention due to the lack of new listings over the past 18 months amid the broader market downturn spurred by rising interest rates.
Klaviyo Inc, a marketing automation company, has priced its 19.2 million share initial public offering (IPO) at $30 apiece, above its previously announced range of $27 to $29 per share, CNBC reported, citing people familiar with the matter.
The pricing would give Klaviyo a market valuation of $9.2 billion.
Instacart (NASDAQ:CART) stock closed the day up 12% at US$33.70 after making its debut on the Nasdaq — above its IPO price of $30 but a far cry from its opening price of $42.
After the initial swell prior to opening, investors engaged in a bit of profit taking on shares of the grocery delivery company.
Klayviyo, a partner of e-commerce firm Shopify, has upped the pricing of its pending IPO following Instacart’s lead after chip designer ARM Holding’s successful float in a market that is heating up.
The company, which provides a marketing automation platform used primarily for email and SMS marketing, said in a filing with the US Securities and Exchange Commission that 19.2 million shares are being offered at between $27 and $29 each. If successful, that would give the company a fully diluted valuation of as much as $9 billion.
IPOs are track to continue accelerating in the last few months of 2023 and into the new year following a series of impressive debuts after a lull in high-profile listings.
This week, ARM Holdings and RayzeBio both made a splash with their respective listings.
ARM Holdings shares fell in early trade on Friday after an impressive debut on the Nasdaq the previous day.
Shares of the British semiconductor maker were down 2% at US$62.25 after closing up about 25% from its listing price of $51 a share on Thursday.
ARM Holdings, the semiconductor chip design firm backed by SoftBank, has priced its initial public offering at $52 per share, according to reports.
That’s higher than the expected price range of $47 to $51 and values the UK-based company at a fully diluted market cap of $55.5 billion. However, the valuation is a step down from the $64 billion at which owner SoftBank acquired a 25% stake from its Vision Fund last month.
Arm Holdings will come to market with a valuation of at least US$54.5 billion based on the interest shown in the chip designer’s New York IPO, according to Reuters citing sources close to the process.
Advisors to the float have opted for the upper limit of its initial US$47-to-US$51-per-share range, and may even price its shares higher when they list on Nasdaq on Thursday, the source told the financial newswire.
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