The IPOX® Update 11/13/23
IPO Buyer's Market Conditions May Offer Opportunities
The current state of the IPO market remains challenging, particularly for US tech companies. According to IPOX Schuster's CEO Josef Schuster, there's a strong buyer's market that offers good opportunities, yet many companies, including Arm Holdings, Klaviyo, and Instacart, are struggling with disappointing results. This trend is evident as only five out of 18 companies that raised over $200 million in traditional US IPOs this year are trading above their offer price. The total amount raised on US exchanges in 2023 has significantly dropped to $24.1 billion, a steep decline from the heights of 2021. Last week, Cargo Therapeutics and Hamilton Insurance Group entered the market, testing current investor appetite. This scenario reflects a broader trend of valuation pressures and market volatility affecting new issuers. (Source)
Klarna Nears IPO Readiness with Turnaround Strategy
Swedish fintech giant Klarna is nearing IPO readiness, as announced by its CEO in an interview with CNBC. The company, known for its Buy-Now-Pay-Later solutions, has shifted its focus towards profitability, addressing investor concerns. This strategic pivot resulted in a remarkable turnaround from a $150 million monthly loss to a $10 million quarterly profit within a year. Klarna achieved this by scaling back investments, initiating layoffs, and enhancing cost efficiency. Notably, its U.S. operations have moved from loss-making to profitable, and credit losses have been reduced by 46% year-over-year. With these positive developments, Klarna is considering an IPO, eyeing the UK as a potential legal entity location, while remaining open to listings in the U.S. and Stockholm. The company's decision will be influenced by ongoing market conditions. (Source)
Jefferies Advises Renault on EV Unit Ampere's Future
Financial services company Jefferies has recommended that French automaker Renault should spin off its electric vehicle (EV) arm, Ampere, rather than pursuing an IPO. This advice comes amidst the backdrop of recent challenges and volatility faced by EV IPOs. Jefferies suggests that distributing Ampere shares to existing Renault shareholders could help minimize dilution, valuing Ampere between €5 billion to €7 billion. Renault's CEO, however, targets a higher valuation of €8 billion to €10 billion. The CEO is also eyeing a diverse investor base in technology and software, potentially through an IPO. Renault is actively considering alternatives ahead of Ampere's capital markets day, keeping options open in a volatile market. (Source)
Dubai Taxi Company Prepares for Public Offering
The state-owned Dubai Taxi Company (DTC) is set to list 624.8 million shares on the Dubai Financial Market this December. The IPO, part of Dubai's state asset privatization program, aims to offer 25% of DTC's shares, with the subscription period opening for UAE retail investors from November 21-28, and for other investors on November 29. Despite 2023's market volatility and geopolitical tensions, this listing is a significant test for the market's receptiveness to upcoming regional offerings. Citigroup, Emirates NBD Capital, and Merrill Lynch are coordinating the IPO. The success of Dubai's IPOs in 2022, which raised $8.5 billion, underlines the potential for DTC's upcoming listing amidst cautious optimism for IPOs in late 2023 and 2024. (Source)
UL Solutions Inc. Files for NYSE Listing
Chicago-based UL Solutions Inc., a leader in testing, inspection, and certification, has filed for an IPO, planning to list on the NYSE under the ticker "ULS." The company, which reported a net income of $214 million in the first nine months of the year, saw its revenue rise to $1.99 billion, up from $1.89 billion year-over-year. The IPO, which is yet to disclose its terms, will be overseen by Goldman Sachs and JP Morgan, leading a team of 11 banks for underwriting. (Source)
