The IPOX® Week #722
IPOX® Indexes trade mixed as Nvidia propels large-cap benchmarks.
Strong earnings drive IPOX® Canada to Top of weekly IPOX® Rankings.
New Product Launch:
IPOX® proudly launches the IPOX® Bond Indexes.
Social media giant Reddit files for IPO, aiming for a $5 billion valuation.
IPOX® PERFORMANCE REVIEW: Mixed earnings drove profit taking in the IPOX® Indexes during the shortened U.S., Japan and Saudi trading week, amid lower risk (VIX: -3.28%) and strength in the IPOX® Aggregate Bond Index (IPOXTD), indicative of the impact of lower treasury yields. In the U.S., e.g., the IPOX® 100 U.S. – underlying for CME-listed Index Futures (IPOH4) and tracked by multiple ETFs, fell -0.46% to +4.51% YTD, better than when compared to U.S. small-caps, however, significantly lagging the Nvidia-infused S&P 500 (SPX), benchmark for U.S. stocks. Mixed trading extended to IPOX® Markets tracking non-U.S. domiciled exposure, including the IPOX® International (ETF: FPXI), IPOX® MENA (IPEV) and IPOX® 100 Europe (ETF: FPXE) which somewhat lagged the benchmarks after the recent big run-up. Noteworthy is another great week for the IPOX® Canada Opportunities (ICDX), the key benchmark for Canadian IPO action. The broad-based, highly liquid and dividend paying portfolio of Canada-domiciled equities trading in Canada and abroad and having pursued an IPO, Spin-off and/or IPO M&A, added a big +2.17% to +7.95% YTD, extending its lead vs. the hard-to-beat Canadian market to a large +550 bps. YTD. The portfolio benefited from the big jump in corporate earnings reported select holdings. More Momentum-driven gains in some of the most recent IPOs also propelled the IPOX® Japan (IPJP) to another solid showing, while the portfolios of incumbent equities pursuing IPO M&A pooled in GINDEX® (GNDX, GNDXI) finished the week with gains as well.
IPOX® PORTFOLIO HOLDINGS IN FOCUS: Amid post-earnings Momentum trading, secondary issuing activity and continued chatter around IPO M&A, the divergence in the return distribution across IPOX® Holdings remained significant. Top of the list of negative outliers, e.g., ranked electric car marker 11/21 IPO Rivian (RIVN US: -38.22%), Israel-based application software maker 05/21 IPO Global-e Online (GLBE US: -19.20%), energy storage solutions provider 10/21 IPO Fluence Energy (FLNC US: -24.79%), desolate trader media firm 04/22 IPO Warner Bros. Discovery (WBD US: -12.41%) and beleaguered auto tech maker 10/22 IPO Mobileye (MBLY US: -7.37%). Factory automation software provider de-SPAC IPOX® heavyweight Symbotic (SYM US: -6.11%) also declined after pricing a secondary. Companies leading in the IPOX® 100 U.S. (ETF: FPX) last week included IPO M&A fintech Square (SQ US: +20.23%), 06/20 IPO Legend Biotech (LGND US: +13.74%) and used car dealer-focused software maker 03/21 ACV Auction (ACVA US: +15.60%), while we also note the fresh post-IPO high in 12/22 Spin-off hospital technology stock GE Healthcare (GEHC US: +3.55%). Amongst non-U.S. domiciled stocks, we are encouraged by the surge in electric car maker 07/20 IPO Li Auto (LI US: +9.99%), dodging the decline in other car makers, as well as by another good week for select Italian-based luxury stocks including high-end fashion maker de-SPAC Ermenegildo Zenga (ZNGA US: +9.48%) and luxury boat maker 03/22 IPO Ferretti (9638 HK: +6.54%, YACHT IM: +5.52%), while IPO M&A industrial services provider RBA Global (RBA CN: +11.51%) helped the IPOX® Canada Opportunities (ICDX) to a great outsized week.
LIVE LAUNCH OF THE IPOX® BOND INDEXES: The IPOX® Bond Indexes are now live, offering access to U.S. dollar-denominated corporate debt from the IPOX® Universe. Designed for both passive and active financial products, these indexes aim to capture the unique returns and potential outperformance of new listings. For more information, contact info@ipox.com.
IPO ACTIVITY AND OUTLOOK: 20 International new listings started trading last week, with the average (median) equally-weighted deal (non-direct listings and de-SPAC) adding +77.92% (+24.49%) based on the difference between the final offering price and the Friday’s close. The largest IPO debut was Turkish cement maker Limak Cement (LMKDC TI: +20.99%, $82m offer). In Japan, digitalization consultancy VRAIN Solution Inc (135A JP: +94.31%) surged to $390m market capitalization after a $22m offer. The biggest news of the week was the S-1 filing of social media platform Reddit (RDDT US) on Friday. The firm now aims to offer around 10% of shares for a $5 billion valuation, making this the largest social media IPO since Pinterest in 2019. The company reported 73.1m daily active users and $90.8m net loss on $804m revenue. In a unique move, Reddit plans to offer IPO shares to select users, based on community contributions. Stay tuned for a special feature of the IPOX® Watch on this upcoming listing.
IPOX® SPAC INDEX (SPAC): The Index fell -1.91% in shortened U.S. trading week to -0.32% YTD. Digital forensic firm Cellebrite DI (CLBT US) increased +2.81% following strong earnings and outlook, while Swiss biopharmaceutical company MoonLake Immunotherapeutics (MLTX US) fell -13.13% as CEO reported stock sells. In SPAC activity, at least 4 SPACs have entered into a definitive merger agreement include SDCL EDGE Acquisition Corporation (SEDA US) announced a merger with Germany specialty copper alloy manufacturer Cunova. Luxury sports car brand Lotus’ EV unit Lotus Technology (LOT US) completed merger with L Catterton Asia Acquisition and traded with high volatility. Two SPACs announced liquidation. One new U.S. SPAC launched last week.
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