The IPO market started strong and could soon take off

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According to Renaissance Capital, 42 IPOs have priced this year. The average first-day pop has been 22%, well above the average of 13% to 15%.

The IPO market is off to an exceptionally strong start, after a two-month hiatus around the government shutdown.The above-average performance extends beyond the first day of trading. About 62% of recent initial public offerings are still trading above their IPO price."With returns like this, the floodgates are going to open very fast," said Renaissance Capital's Kathleen Smith.

Coming up next week: Slack will start its road show, lab supplier Avantor will seek to raise $3 billion for its IPO, Pimco Mortgage Interest Trust, a mortgage REIT, will seek to raise $1 billion, and Luckin Coffee, an app-only coffee shop billed as the Starbucks of China, will also seek to raise $480 million. We are also waiting for WeWork to make its filing public.

"The landscape is much more friendly, but this is not an unfiltered environment," he said."If the valuations are going to be pushed above general market expectations, you will have deals that may do well at the open, but they will fall under their own weight." CNBC reported Wednesday that Uber will price its IPO at $47 or below, the midpoint of its $44-$50 price range. At the midpoint, Uber's valuation would be about $86 billion, well below prior price talk of $100 billion to $120 billion.

 

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