Despite the high-profile flops of Uber Technologies and Lyft Inc, and WeWork's aborted public offering, most of this year's IPOs finished in the green.
Buoyed by a healthy fourth quarter rally in the biotech space along with a solid outcome in December by back-office software provider Bill.com (up 70% from IPO price), the average return for 2019 IPOs stands at about 26%. Roughly 60% of this year's 152 debutantes are trading above issue, based on a Reuters study. (Study excludes Slack Technologies, which chose a direct NYSE listing).
The ride, however, was far from smooth. By mid-October the average return collapsed to about 2% from 30% at the end of June in the wake of dismal September debuts from the likes of SmileDirectClub and Peloton Interactive as investors slammed the brakes on money-losing companies. Indeed, UBER and LYFT are still trading 34% and 40% below their IPO prices, respectively.
On the flip side, vegan-burger maker Beyond Meat saw its stock sizzle to nearly $240 just months after its May debut. Since then, BYND cooled off significantly, but is still triple its IPO price.
Looking ahead, companies and their investment bankers will likely attempt to get deals done as early as possible before investors shift their focus to the US presidential election.
Meanwhile, Renaissance Capital, said the IPO backlog of billion-dollar companies is larger than ever. In its year-end review, the research firm and manager of IPO-focused ETFs calculates that 2020 issuance could be roughly as active as 2019.
Household and kitchen products maker Reynolds Consumer Products Inc filed for an IPO that could raise more than $1 billion, while well-known shoemaker Cole Haan could seek to go public.
Also, short-term home rental company Airbnb Inc and online food delivery firms DoorDash and Postmates are notable potential debutantes. But Airbnb is among several startups reportedly mulling the direct-listing route.
The S&P 500 has seen quite a rally from its late-December 2018 trough. The broad-market average up more than 28% year-to-date, putting it on track for its best year since 2013.
However, one notion put forth by proponents of Gann Theory, is that US markets may see turning points around the northern hemisphere's fall and spring equinoxes as well as the winter and summer solstices.
Therefore, some traders may be on alert around these events, for an acceleration of the prevailing trend, or a significant reversal. Looking back to late-2018, the S&P 500 has seen some interesting action develop around these seasonal dates. Indeed, traders are noting that the SPX's 3,247.93 high this past Friday did come within one week of this year's winter solstice on December 21.
Traders may also look for turns around the anniversary dates of significant highs and lows. Thus, adding to the potential for a trend change, this year's December high came exactly 52 weeks, or 1 year, from 2018's late-December trough.
Additionally, the SPX has so far failed to sustain strength above the resistance parallel from early May. This line, which now comes in at around 3,250, may continue to hinder gains.
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