8 Companies Expected To Raise $2B In IPOs Next Week

The initial public offering market is flush with activity, as eight deals expected to raise $2 billion hit the market, including outdoor livings product firm Azek Co.

What Happened

So far, in 2020, there have been 43 IPOs, 31% fewer compared to the same period in 2019. Last week was a busy one, as eight IPOs and two special purpose acquisition vehicles hit the market. 

Warner Music Group Corp.’s WMG raised $1.93 billion, having sold 77 million shares at $25 each, according to MarketWatch.

This week, Azek is expected to raise $625 million at the top of its price range. Another debutant, Vroom Inc, a used-car company, is targeting stock sales of $467 million. The company’s revenue is rising steadily, but it is still in losses.

Vaxcyte, a vaccine maker, aims to raise $210 million at the top end of the price range.
Other deals include Burning Rock Biotech, a cancer test company from China, planning to raise $210 million, selling $13.5 million of ADRs priced between $13.50 to $15.50.

Generation Bio Co., a biotechnology company specializing in making treatments for rare diseases, targeting IPO sales of $133.2 million.

uCloudlink, a Chinese mobile data marketplace, which is raising up to $53 million by selling 2.6 million ADRs.

Lantern Pharma, a biotechnology company focused on cancer treatments, aiming to raise $26.52 million and SPAC Hudson Executive Investment targeting $300 million in its offering.

Why It Matters

Even as secondary markets soar, bolstered by news of the reopening of the economy, the primary market is just beginning to pick up momentum.

A number of Chinese companies are scheduled to hold IPOs this week. So far, in 2020, eight companies from China have raised $898 million as of end-May.

Over the same time span in 2019, six Chinese companies had raised $626 million, including the beleaguered Luckin Coffee LK, which raised $561 million in May 2019, reported MarketWatch.

Market operators, such as Nasdaq, are ushering in tighter regulations to curb Chinese listings on their exchanges, after financial malpractices such as the one carried out by Luckin, came to the fore.
New rules would require companies from China and certain other countries to have raised at least $25 million in their IPO, or as an alternative, at least a quarter of their post-listing market capitalization.