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Is the IPO Party Over? ETFs in Focus

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  • (1:45) - What is Going On In The 2019 IPO Market?
  • (6:40) - How Was Beyond Meat The Big Winner In IPOs?
  • (9:10) - The High Profile IPO Failures
  • (18:20) - How Does The IPO Process Work?
  • (22:30) - Renaissance Capital IPO ETF: IPO
  • (28:00) - Renaissance International IPO ETF: IPOS
  •             Podcast@Zacks.com

In this episode of ETF Spotlight, I speak with Kathleen Smith, chairman and co-founder of Renaissance Capital, a global IPO investment advisory firm. We discuss the IPO market and IPO ETFs.

2019 was expected to be a bumper year for IPOs. In fact, the IPO market was quite hot earlier this year but has cooled off now as investors have lost appetite for loss making start-ups with founders that have outsized control.

The shares of SmileDirectClub (SDC - Free Report) fell 28% on their first day of trading last month and are down about 60% now, making it the worst performing IPO this year .  Peloton (PTON - Free Report) shares closed more than 11% down in their debut.  

This year’s top performers are plant based meat maker Beyond Meat (BYND - Free Report) , insurer Palomar Holdings (PLMR - Free Report) and videoconferencing technology provider Zoom Technologies

Some of the most high profile tech IPOs of 2019 including Uber (UBER - Free Report) and Lyft (LYFT - Free Report) are trading well below their IPO prices. It seems private money was chasing growth at all costs.

WeWork, the poster child for what is wrong with some of these unicorns, was valued at $47 billion at its most recent private funding round. Adam Neumann, its eccentric founder, talked about becoming leader of the world, living forever and amassing more than $1 trillion in wealth, per WSJ.

Neumann lost his job and the IPO has been shelved as the company faces a cash crunch.

Is the IPO party over? In addition to WeWork, entertainment group Endeavor also pulled its IPO. Will investors remain cautious of IPOs going forward? Tune into the podcast to learn more.

The Renaissance IPO ETF (IPO - Free Report) provides diversified exposure to newly public companies before they join other core US equity indexes. Major indexes usually include newly public companies only after a “seasoning” period. For example, Google (GOOGL - Free Report) and Facebook (FB - Free Report) were included in the S&P 500 index about two years after going public.

The Renaissance International IPO ETF (IPOS - Free Report) holds recently listed international IPOs. Please visit Renaissance Capital to learn more about IPOs and these ETFs. If you have any comments or questions, please email podcast@zacks.com.

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