IPO market returns as Pinterest launches discount



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The first portfolio of US public offerings resumed Monday, as five companies set the terms of their contracts, including the online scrapbooking site Pinterest.

The wave of activity comes after a dismal first quarter, during which the flow of transactions has been even slower than is typical for this time of year, in part because of the government shutdown in January.

Read also: Long-awaited IPOs from Uber and Lyft could collapse against government wall

"The market almost closed at the end of the year, really in March," said Kathleen Smith, director of Renaissance Capital, a provider of institutional research funds and exchange-traded funds.

The slowdown has been felt around the world, according to a survey by EY, formerly Ernst & Young. The survey revealed that there had been only 199 transactions during the quarter to raise $ 13.1 billion. This is a 41% decrease in the number of transactions and 74% of the same period in 2018.

"While the first quarter is generally a silent IPO quarter in all regions, in 2019 we found that IPO markets were subject to a cautious wait because of the collision of several factors," said Dr. Martin Steinbach, leader of IPOs at EYIA and EMEIA. . "The dense fog of persistent geopolitical tensions, trade problems between the United States, China and Europe, as well as uncertainty as to how the United Kingdom will leave the European Union have slowed the IPO activity in all regions. "

After a period of drought, the usual pattern is that the resulting transactions are the most robust and valued in the most attractive way, Smith said. But that's not what happened with the carpooling service, Lyft

LYFT, -5.67%

who flopped in his debut and is currently just pennies above his IPO price of $ 72.

"Investors are not comfortable with the valuation," she said. "They have a hard time trying to figure out how to showcase this company, and it will be difficult with Uber," she said, citing Lyft's biggest rival, who is also planning to go public this year.

See also: Lyft's stock falls below the price of its IPO on the first day of trading

Related: Lyft short sellers are in overdrive after IPO

Carpool competitors are two of the "decacorns" that should be on the list this year, or startups valued at more than $ 10 billion by private investors. Other services include Slack Instant Messaging, Airbnb House Sharing Company and Secret Security Company Palantir Technologies.

The good news is that Pinterest

PINS, + 0.00%

who set the terms for his own transaction early Monday, launched with a discount from his last round of private financing, "which tells you that they are adapting to the realities of the IPO market," Smith said. .

See also: Pinterest IPO Filing: 5 Things Investors Should Know

Pinterest has set its price range between $ 15 and $ 17 per share, which gives it a valuation up to $ 11 billion, less than the $ 12.3 billion it was valued at a round financing in 2017 at a price of $ 21.54 the action. According to Renaissance, Pinterest offers a powerful business model that allows users to see and compare products that interest them, according to Renaissance.

The other companies that secured this deal on Monday are Zoom Video Communications, a provider of the first video communication platform based in San Jose, California, offering 10.9 million Class A shares to the IPO, to an amount of $ 348.1 million, while the shareholders sells millions of Class A shares.

Palomar Holdings Inc., a specialty insurer, announced the sale of 5.6 million shares at a price of $ 15 to $ 17 each. And the biotech companies Hookipa Pharma and Turning Point Therapeutics set the conditions for their transactions.

Monday's bids should be priced next week after investor roadshows. But this week's pipeline includes Jumia Technologies

JMIA, + 0.00%

an African e-commerce company that offers investors a place for emerging markets in a fast-growing company.

"In terms of investments, we are losing a lot of money," Smith said. "But people are excited about growth in Africa and e-commerce is very underdeveloped. There are logistical challenges and different languages ​​make evaluation difficult. "

Read now: The African e-commerce site Jumia becomes public: 5 things to know before its IPO

The other two expected contracts are cybersecurity firm Tufin Software Technologies

TUFN, + 0.00%

and computer monitoring company PagerDuty Inc.

The Renaissance IPO ETF

Initial Public Offering, -0.45%

has gained 32% since the beginning of the year, while the Renaissance International IPO ETF

IPOS, -0.34%

gained 15%. The S & P 500

SPX, + 0.10%

gained 15% and the Dow Jones Industrial Average

DJIA, -0.32%

added 13%.

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