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IPO Activity in the First Quarter Could Bode Well for an Active 2019

The first quarter of 2019 saw the successful initial public offering of jeans brand Levi Strauss & Co. and car service firm Lyft Inc., and while there’s an expectation that 2019 will have a steady pipeline, it’s too soon to say that all will do well.

Levi Strauss hit the big board on March 21, raising $623.3 million. The shares opened at $22.22, or 30 percent above the $17 that the shares had priced at the night before. The shares closed at $22.42, or 31.9 percent above its pre-market pricing. More recently, shares of Levi has been in the trading range of $21.41.

That’s in sharp contrast to what happened with Lyft, which was supposed to price shares at between $62 and $68. Instead, the tech unicorn priced at $72, only to spend its first week of trading on the Nasdaq Exchange at below its offering price. That had some critics thinking that the IPO was a bust, although the shares are now in the $67.95 trading range.

And photo-sharing site Pinterest is set to go public, but first it has to determine at what dollar amount to price its shares. There’s speculation that Pinterest will learn from Lyft’s perceived mistake and be more cautious in pricing its offered shares when it goes to market. It’s now expected to price at between $15 to $17 a share, below its $21.54 a share, pre-IPO, valuation. At the lowered amount, the high end range would value Pinterest at $11.3 billion.

The truth, though, is that there’s a chance Lyft could be the exception rather than the beginning of a new trend. “IPO activity should be robust in the [second quarter] due to the large number of companies that have announced plans to go public,” according to IPO research firm Renaissance Capital.

The research firm noted that since Lyft filed at the beginning of March to go public, 17 additional firms have filed with the Securities and Exchange Commission with total potential deal proceeds of nearly $7 billion. That amount in deal proceeds would exceed the $4.7 billion raised in the first quarter “and five of the preceding 12 quarters.”

Rumored to be coming up is ride-sharing and hailing firm Uber and Chinese e-commerce site Yunji, among others. It’s that pipeline that has Renaissance Capital believing that the “second and third quarters look to be very active.”

And there’s talk that e-tailer Revolve is still considering an IPO, while luxury consignment firm The RealReal has been rumored to be looking hire a financial advisor for its IPO quest.

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