U.S. IPO Weekly Recap: Cannabis Micro-Cap Breaks The IPO Market’s Dry Spell

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A cannabis micro-cap broke the IPO market’s month-long dry spell this past week and became the latest small issuer to soar in its debut, popping 163% on its first day.

One SPAC also priced in the slowest week for blank check IPOs since August. The pipeline saw a bit of activity, with two IPO and four SPACs submitting initial filings.

Akanda (AKAN) raised $16 million at a $116 million market cap. The company plans to supply medicinal-grade cannabis products to wholesalers in international markets, with cultivation facilities in Southern Africa. Its operations are still early stage, and it has generated minimal revenue to date. Akanda traded down after its first day, finishing up 85%.

SPAC Goldenstone Acquisition (GDSTU) raised $50 million to acquire growth-oriented businesses with enterprise values between $150 million and $500 million.

2 IPOs During the Week of March 14th, 2022

Issuer

Business

Deal

Size

Market

Cap

at IPO

Price vs.

Midpoint

First

Day

Return

Return

at

03/18

Akanda (AKAN) $16M $116M -20% +163% +85%
UK-based cannabis producer with cultivation facilities in Southern Africa.
Goldenstone Acquisition (GDSTU) $50M $66M 0% +0% +0%
Blank check company targeting growth-oriented businesses.

Two IPOs submitted initial filings. Chinese toner cartridge maker Planet Image International (PLIM.RC) filed to raise $27 million, and diagnostics and PPE provider Virax Biolabs (VRAX) filed to raise $17 million.

Four SPACs filed led by tech-focused Israel Acquisitions (ISRLU) and energy-focused VIKASA SPAC Series I Acquisition (VSSAU), which both filed to raise $200 million.

6 Filings During the Week of March 14th, 2022

Issuer

Business

Deal

Size

Sector

Lead

Underwriter

Aura FAT Projects Acq. (AFARU) $100M SPAC EF Hutton
Blank check company targeting emerging tech with growth potential in Southeast Asia and Australasia.
VIKASA SPAC I (VSSAU) $200M SPAC Cantor Fitz.
Blank check company targeting renewable energy.
Virax Biolabs (VRAX) $17M Health Care Boustead
UK-based provider of diagnostic tests and PPE for viral diseases.
Israel Acquisitions (ISRLU) $200M SPAC BTIG
Blank check company targeting Israeli or Israel-related tech businesses.
Planet Image (PLIM.RC) $27M Industrials Network 1
Chinese toner cartridge manufacturer.
ClimateRock (CLRCU) $75M SPAC Maxim
Blank check company targeting the sustainable energy industry in OECD countries.

No IPOs are currently scheduled to price in the week ahead, although a few SPACs may join the calendar during the week.

New issuers continue to delay launching, likely deterred by concerns of inflation, the war in Ukraine, and poor IPO returns in recent months. Large deals waiting in the pipeline include Bausch Health spin-off Bausch + Lomb (BLCO), mattress retailer Mattress Firm (MFRM), car-sharing platform Turo (TURO), and digital ad firm Aleph Group (ALEF).

Lock-up periods will be expiring for up to 11 companies.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 3/17/2022, the Renaissance IPO Index was down 27.3% year-to-date, while the S&P 500 was down 7.1%. Renaissance Capital’s IPO ETF (IPO) tracks the index, and top ETF holdings include Uber Technologies (UBER) and Snowflake (SNOW).

The Renaissance International IPO Index was down 23.9% year-to-date, while the ACWX was down 7.1%. Renaissance Capital’s International IPO ETF (IPOS) tracks the index, and top ETF holdings include Volvo Car Group (OTCPK:VOLAF) and Kuaishou (OTCPK:KUASF).

Original Post

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.


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