Markets are green again this morning on news of more containment of the coronavirus out of China as well as the cutting in half of the tariffs that China had placed on some of our imports as a response to phase 1 of the trade deal. All good news and this has the pre-market up for the third day in a row, a good situation for IPOs to come into. We have a lot to cover for those IPOs so keep reading for the 4 We have today.
IPO’s for today:
Beam Therapeutic – (BEAM)
This IPO is in a very hot Biotech sector but it is also in a very early stage as a company. It is really more of a story than any substance at this point. But their gene-editing technology is intriguing and has garnered significant interest. So much so that they have both increased their share offering twice, yes, twice, from 6.5 to 9.25 and now 10.6 million shares at a price of $17 which is the high end of their range. ($15-$17) Given this high demand, I expect this may pop at the open.
Casper Sleep (CSPR)
You are probably already aware of this IPO. It’s a mattress company, backed by some celebrities. I’ve never used the product, but it is not a profitable company at this point and the history of previous IPOs with a similar story of losses has impacted the valuation of this company. It’s last funding round valued it at 1.1 billion. But CSPR has had to lower its price range from $17-$19 to $12-$13 to get this deal done and priced it at $12. This puts their current value at no more than $515 million. They are cash strapped at the moment and in a highly competitive field. This may offer a nice risk-reward investment.
PPD, INC (PPD)
PPD is in the Biotech field, providing drug development services and has worked with all the major drug companies. They have a great cast of underwriters, their profitability is growing, and their valuation is in line with competitors. The biggest issue I see they have is significant debt, but they have laid out a plan to deal with this. I think they will benefit from coming into the high sentiment currently in the Biotech field. This is also reflected in that they have priced at $27, at the top of their range of $24-$27.
Schrodinger, INC. (SDGR)
This is a very interesting IPO for several reasons. It is a software company that helps identify novel molecules for drug development. So it’s in that hot bio-tech space. Secondly, the largest shareholder pre-IPO is Bill and Melinda Gates. Yes, those people. The company has not yet shown profitability but is growing and has been around for decades with many drug companies using its services. It has a price range of $14-$16 dollars a share but because of demand, it has priced at $17. This is the first IPO we’ve seen in some time to price above its range.