Daily Spotlight

Strong Quarter for IPOs

Some 68 companies went public in 2Q19, up more than 200% from a slow 1Q19. As well, more IPOs were successful, as approximately 20 IPOs opened at least 30% above the issue price. Eight Unicorns conducted IPOs, ranging from videoconference company Zoom Video Communications (ZM) to photo-bookmarking site Pinterest (PINS) to transportation company Uber (UBER) to online consignment retailer RealReal (REAL). There were bright spots in the quarter other than Unicorns. Investors snapped up consumer-oriented companies such as plant-based meat-substitute Beyond Meat (BYND), which saw its shares soar more than 84% at the open. Another food-related company, Grocery Outlet Holding Corp. (GO), rose 41%. Even food for pets was popular, as shares of Chewy Inc. opened 63% above the issue price. We think the market for IPOs will remain active. Economic growth, led by the employment environment, appears solid at around 2.0%-2.5%; and corporate earnings are expected to grow at a mid- to high-single-digit rate as the dollar stabilizes and oil prices start to recover. We also look for corporations to continue pruning business portfolios and raising assets through the public markets. ...  companies such as plant-based meat-substitute Beyond Meat (BYND), which saw its shares soar more than 84% at the open. Another food-related company, Grocery Outlet Holding Corp. (GO), rose 41%. Even food for pets was popular, as shares of Chewy Inc. opened 63% above the issue price. We think the market for IPOs will remain active. Economic growth, led by the employment environment, appears solid at around 2.0%-2.5%; and corporate earnings are expected to grow at a mid- to high-single-digit rate as the dollar stabilizes and oil prices start to recover. We also look for corporations to continue pruning business portfolios and raising assets through the public markets.   more

Weekly Market Podcast

Analyst
Quick Notes

Weekly Economic Commentary