Hello; it's nice to see you again. Last week the IPO market took one of its periodic summer breaks, effectively awarding itself a collective vacation to spend some of the estimated $31.5 billion in proceeds it took in for the first half of 2014. That, by the way, is almost 53% higher than the tally at the same time last year.
If this week is any indication, that percentage will stay nice and chunky. Between now and Friday, 11 companies are slated to go public, with eight of them expected to take in over $50 million from their offerings. Here's a look at three of these issues.
A word of warning before we pull back the curtain, though. IPO investing carries above-average risk, as initial stock prices can be far from the value the market eventually puts on the company's shares. This provides great upside potential, but on the flip side it also carries the risk of losing a substantial part of an investment.
It's going to be a good week for biopharma IPOs; seven of the 11 scheduled issues are in the sector. The largest is likely to be Roka BioScience, a company that specializes in diagnostic solutions that detect foodborne pathogens. According to the firm, this is anticipated to be the fastest-growing segment of the food safety testing market, which totals around $2 billion at present.
Roka BioScience's IPO is scheduled for Thursday. Five million shares will go on sale for $14 to $16 apiece, and the stock should list on the NASDAQ under the ticker symbol ROKA. The lead underwriters of the issue are Bank of America Merrill Lynch, Cowen Group's Cowen and Company, Wedbush PacGrow Life Services, and Leerink Partners.
A hot trend in the renewable-energy space lately has been the yieldco, in which a big producer hives off selected assets into a separate company that distributes the bulk of its profits as dividends. This is analogous to the master limited partnerships currently popular in the oil and gas industry. The large entity in this case is SunEdison (NASDAQOTH:SUNEQ), and the result is going to be the solar-focused TerraForm Power. As of this past March, SunEdison had around 1.9 gigawatts of solar generation assets under management spread across 900 facilities in 12 countries.
Nearly 20.1 million shares of TerraForm Power will hit the market on Friday, priced at $19 to $21 per share. The stock's ticker symbol will be TERP, and it will trade on the Nasdaq. Goldman Sachs (NYSE:GS), Barclays, Citigroup (NYSE:C), JPMorgan Chase's (NYSE:JPM) J.P. Morgan, and Macquarie Capital are the leaders of the big underwriting syndicate.
Well, this is a unique niche. Trupanion provides health insurance that covers everyone's favorite non-human members of the household -- cats and dogs. The firm sells its products via monthly subscription, and it seems there's a robust market for such policies. The top line grew from $19 million in 2010 to almost $77 million last year, and although the company hasn't been profitable, its number of four-legged friends enrolled rose from around 57,000 to 170,000 in that time frame.
Trupanion's stock market debut is to take place on Friday. Just over 7.1 million shares will be sold at $13 to $15 apiece. Royal Bank of Canada's (NYSE:RY) RBC Capital Markets, Barclays, and Stifel are the lead underwriters, and the stock should list on the New York Stock Exchange under the ticker symbol TRUP.
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