Initial public offering (IPO) are back in fashion



After a very quiet first quarter for IPOs, things are now bubbling again on that front, a sign of renewed investor confidence as European stocks keep adding to their new-year gains. However, not all new listings are skyrocketing.

Valuation levels are back to acceptable levels and appetite for IPOs has been recovering, making the period an ideal window for private companies to go public. April has already seen the highest value of traded IPOs since last October, with about $5.1 billion coming to the market.

European investors had no big IPO name to trade since January. This month has been the first to see a decent size of listings, including Swiss train maker Stadler last Friday, which rose 13 percent on its first day of trading. At the other end of the spectrum, medical device manufacturer Medacta was less buoyant, and is now trading below its initial offering price.

Tomorrow will see Italian payment-service company Nexitrade for the first time. The books were largely oversubscribed. A repeat of Adyen’s performance (~190% return since listing on June 13 last year) may be what investors are wishing for. The listing in London of Dubai-based payment service firm Network International Holdings also went well.

But not everyone is IPO hungry.

And, as other IPOs after Adyen showed, not everything does well. Aston Martin’s IPO last year is a good example. Priced like competitor Ferrari, the British carmaker did not live up to the expectations. The stock hit a new low last week and has erased about 50 percent of its value. Metrovasca and Vivo Energy also lost value after their IPOs.

Източник: Bloomberg Finance L.P.

Chart: Used with permission from Bloomberg Finance L.P.

 Trader Milko Zashev

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