The October IPO market produced 24 IPOs—the second highest number for the month since 2000, behind only the 26 IPOs in October 2004. The year-to-date total of 210 IPOs is the highest annual figure since the 445 IPOs in 2000.
Gross proceeds in October were $4.05 billion, bringing the total over the first 10 months of 2014 to $68.4 billion, or 66% above the full-year 2013 total of $41.3 billion.
The median IPO offering size declined 12% from $107.4 million in full-year 2013 to $94.1 million in the first 10 months of 2014—the lowest yearly figure since the $89.3 million median offering size in 2004. The median offering size for life sciences IPOs declined from $68.6 million for full-year 2013 to $56.2 million over the first 10 months of 2014. While the median offering size for non-life sciences IPO companies declined 33% from $187.0 million in 2013 to $126.2 million in the first 10 months of 2014, the 2014 figure was largely in line with the $124.3 million median figure for non-life sciences IPO companies for the five-year period preceding 2013.
The median annual revenue for IPO companies fell from $133.6 million in 2012 to $89.9 million in 2013 and fell further to $70.6 million in the first 10 months of 2014—the lowest level since 2000. The percentage of profitable IPO companies declined from 55% in 2012 to 43% in 2013 and to 36% in the first 10 months of 2014. Among all life sciences IPO companies in 2014, median revenue was just $1 million and only 14% were profitable.
Although October produced seven IPOs by life sciences companies, many faced pricing pressure. Four of the month's life sciences company IPOs priced below the range and two of the remaining three were "broken" (closing below the offering price on the first day).
The average IPO company in 2014 ended its first day of trading with a 13% gain compared to an average first-day gain of 21% for IPOs in all of 2013. However, aftermarket performance has been essentially flat—the average IPO company in the first 10 months of 2014 has gained only 1% from its first-day closing price through the end of October.
Year-to-date, 20% of IPOs produced a first-day gain of at least 25%, and 27% of IPOs were broken. The percentage of broken IPOs in 2014 represents the third-highest figure in the last 15 years.
At October month-end, 43% of all 2014 IPOs were trading below their offering price and just over half of all 2014 IPOs were trading below their first-day close.
IPO activity in October consisted of offerings by the following companies listed in the order they came to market:
- AAC Holdings, a leading provider of inpatient substance abuse treatment services for individuals with drug and alcohol addiction, priced above the range and produced a first-day gain of 23%.
- Atento, the largest provider of customer relationship management and business process outsourcing services in Latin America and Spain, and among the top three providers globally, based on revenues, priced below the range and declined 14% in first-day trading.
- Calithera Biosciences, a clinical-stage pharmaceutical company focused on discovering and developing novel small molecule drugs directed against tumor metabolism and tumor immunology targets for the treatment of cancer, priced an IPO upsized by 33% below the range and ended its first trading day down 6%.
- VWR, a leading, independent provider of laboratory products, services and solutions to the global life science, general research and applied markets, priced below the range and notched a five-cent gain in first-day trading.
- Wayfair, an online retailer of home furnishings, priced above the range and produced a first-day gain of 30%.
- Dermira, a specialty biopharmaceutical company focused on bringing innovative and differentiated medical dermatology products to dermatologists and their patients, priced an IPO upsized by 46% at the high end of the range and ended its first day of trading down 3% from its offering price.
- FMSA Holdings, one of the world's largest providers of sand-based proppant solutions, priced an IPO downsized by 44% below the range and was flat in first-day trading.
- Yodlee, a leading technology and applications platform powering dynamic innovation for digital financial services in the cloud, priced at the midpoint of the range and gained 12% on its first day of trading.
- HubSpot, a provider of a cloud-based marketing and sales software platform, priced above an upwardly revised price range and produced a first-day gain of 20%.
- MOL Global, the largest e-payment enabler for online goods and services in Southeast Asia by payment volume, priced an IPO downsized by 31% at the low end of the range and declined 35% in first-day trading.
- OM Asset Management, a global, diversified, multi-boutique asset management company, priced below the range and shed five cents on its first day of trading.
- Veritex Holdings, a bank holding company headquartered in Dallas, Texas, priced in the middle of the range and produced a first-day gain of 7%.
- Dave & Buster's Entertainment, a leading owner and operator of high-volume venues in North America that combine dining and entertainment for both adults and families, priced at the low end of the range and ended its first day of trading with a gain of 8%.
- Diplomat Pharmacy, the nation's largest independent specialty pharmacy, priced below the range and climbed 23% from its offering price in first-day trading.
- Forward Pharma, a biopharmaceutical company preparing to initiate a Phase 3 clinical trial for the treatment of multiple sclerosis patients, priced an IPO upsized by 10% at the midpoint of the range and ended its first trading day down 17%.
- Great Western Bancorp, a full-service regional bank holding company focused on relationship-based business and agribusiness banking, priced below the range and ended its first day of trading unchanged from its offering price.
- Atara Biotherapeutics, a clinical-stage biopharmaceutical company focused on developing novel therapeutics for serious unmet medical needs, with an initial focus on muscle wasting conditions and oncology, priced below the range and ended its first trading day down 3%.
- Zayo Group Holdings, a provider of bandwidth infrastructure in the United States and Europe priced an IPO downsized by 27% below the range and produced a first-day gain of 16%.
- Anchor BanCorp Wisconsin, the third-largest bank headquartered in Wisconsin offering a full range of financial services through 54 full-service banking offices, priced in the middle of the range and gained 17% in first-day trading.
- DBV Technologies, a clinical-stage specialty biopharmaceutical company focused on developing immunotherapy patches that treat food allergies, priced below expectations and produced a first-day gain of 6%.
- Proteon Therapeutics, a late-stage biopharmaceutical company focused on the development of novel, first-in-class pharmaceuticals to address the needs of patients with renal and vascular disease, priced an IPO below the range but upsized by 30% to raise the expected amount of gross proceeds and ended its first trading day with a gain of three cents.
- Sientra, a medical aesthetics company, priced in the middle of the range and gained 12% in first-day trading.
- Boot Barn Holdings, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories in the United States, priced at the top of the range and produced a first-day gain of 9%.
- Fifth Street Asset Management, a leading alternative asset manager with more than $5.6 billion of assets under management, priced at the expected price and declined 21% from its offering price in first-day trading.