Quantitative Partners

IPO Financial Nework

Current thoughts from David Menlow 03/26/19

I'm thinking about a song from 35 years ago that sums up the current state of the IPO market. I'll leave that to your imagination for the time being. Having said that, there is a seismic change that has hit the IPO market like a piano dropped out of 2nd floor window. The noise is the market's signal to pay attention to what is happening in front of it. That kind of a drop is noteworthy, because the piano will break into many pieces for everyone to see, but doesn't mean it is completely shattered. Those pieces are about to provide the legs to restore the IPO market in a fairly distinct way in 2019.

After the lull in the market for what seems like an interminable time of lackluster performance, the IPO market is about to go through a renaissance of enthusiasm. Leading off the pack is this week's offering of Lyft. Certainly the weaker of the two ride-sharing companies that are worth a second look, but Lyft is going to be the trailblazer for the return of the IPO market. However, this emerging interest in the IPO unicorns, is not a return to the early 2000s, but a concerted focus on the "bang for the buck" deals.

Flaws in the underpinnings of all these companies are everywhere, but investors realize they are at party for many other deals that about to hit the street in the upcoming second quarter. This is "herd mentality" once again showing the early phases of investors just wanting a piece of the noise. Lyft is going to provide it, but the timeline for holding will be ticking very loudly, marking an intensive focus on the exit door when already inflated valuations, face the thin air of reality down the road.

The song I mentioned is from Glenn Frey in 1984 entitled "The Heat Is On". It is worth it to look up the lyrics, as a better description of what lies ahead of us in the IPO, cannot be found. The list of hypersensitive IPO offerings that are going to hit the market is numerous. Alight, Uber, Air bnb, Postmates, Pinterest, etc. The list of underwriters will be lengthy for each one, but placement will be sloppy, because of the quantity of banks that are involved. Valuations are evidently not of much interest to investors, other than seeing headlines of what they are.

As an example, a few years ago, the market was saying that Uber would have difficulty coming to market with a $40 Bil market cap. Now we are seemingly comfortable with the talk of $120 Bil. Normal investors are saying "What is wrong with these people?". Smart investors know that focus is on these unicorns, and they have to be there to participate in what is a giant-sized appetite for these IPOs. We are expecting the underwriters to try and put some semblance of credibility into the pricings of these deals, knowing they all have a shelf life before the aftermarket follow through start to whither on the vines. We are at the beginning of this mini-cycle. Being involved in the IPOs at their IPO prices, are going to be crucial for your financial health. The music hasn't started playing yet, let alone be worried about it stopping and there is no chair for you. Even though "the heat is on", step outside for some fresh air once in a while, and manage your expectations properly.

IPOfn Website
IPOfn log in page to retrieve reports
IPOfn Online User Document
Facebook IPO Financial Report

All IPOs of 2004 Listed by sector
Post IPO Research Catalog

IPO Financial Weekly Update 11/13/2006


What Is IPOFN?

IPOFN is known for the accuracy of its IPOFN Rankings on IPOs and Secondary offerings, but is equally proud of the comprehensive IPO research package covering pending deals, after-market coverage, trading ideas and its historical database.

IPOFN provides all the information necessary to participate in the IPO and secondary markets in a series of crisp, concise FAX reports. If you are a participant in these deals, you need to know where each deal is expected to open, which deals are going to be hot, and where to go to get in on the deals - the IPOFN proprietary package is the only source you will need.

What Are the IPOFN Rankings?

IPOFN Rankings tell you which deals are hot and which are not. Over the last six years, IPOFN has achieved high accuracy on its IPO rankings and strong accuracy on its secondary rankings.

Each deal receives a ranking indicating where the deal will trade: 7 possible ranks for secondaries and 17 ranks for IPOs. The IPO ranking correctly predicts where the first bid-side trade will hit the tape. The secondary ranking tells you where the stock will trade on the bid-side during its first 15 minutes of trading.

The IPOFN Rankings are simple to use, however, the analytics behind the rankings are complex. The system utilizes 250 fundamental data items on each company to formulate its ranking.

Who Is Behind IPOFN?

David Menlow is the Principal of IPOFN. Mr. Menlow developed all of the proprietary algorithms that derive the IPOFN Rankings. He has been in the financial markets for 18 years. IPOFN has been analyzing the IPO markets and publishing the IPOFN service for 6 years. He is a frequent commentator on CNBC and has appeared on CNN and the Nightly Business Report. Mr. Menlow is known as a source for The Wall Street Journal, Investors Business Daily and all of the financial publications commenting on the IPO market.

Traditional Weekly Reports

Today"s Equity Pricings

Frequency: Tuesday - Friday
Timing: Before 8:30 am
Content: First look at the deals priced over night with IPOFN RankingsSM to indicate where issues should trade.

Evaluation Changes

Frequency: Tuesday - Friday
Timing: Before 10:00 am
Content: Updates all changes in IPOFN RankingsSM: newly registered issues, newly ranked issues and any changes in IPOFN rankings.

On Deck for Tomorrow

Frequency: Monday - Thursday
Timing: Before 2:00 pm
Content: Details all offerings expected to be priced for trading the next day.

Head Start for Next Week"s Deals

Frequency: Fridays
Timing: Before 2:00 pm
Content: A short term calendar highlighting only the following week"s offerings.

Alphabetical Listing

Frequency: Weekend Delivery
Timing: Friday Evening
Content: A short term calendar highlighting only the following week"s offerings.


Frequency: Weekend Delivery
Timing: Friday Evening
Content: This looks forward for the next 8 - 12 weeks at all deals in the pipeline, providing comprehensive data, including ranking, amount, date, etc.

Historical Selling Group Participants

Frequency: Weekend Delivery
Timing: Friday Evening
Content: Advises of top 40 firms that should participate in selling group based on historical patterns.

Participating Underwriters

Frequency: Weekend Delivery
Timing: Friday Evening
Content: Comprehensive listing of all underwriters either manager or co-manager with all active deals in which each is participating.

High - Yield and Convertible Listing

Frequency: Weekend Delivery
Timing: Friday Evening
Content: Comprehensive list of high yield and convertible issues w/o ranks.

Secondary Issues

Frequency: Every Monday
Timing: Monday Evening
Content: Listing of secondaries with analysis of the last three issues done by that underwriter and in that industry

Sector Breakdown

Frequency: Every Monday
Timing: Monday Evening
Content: Listing by industry group and the secondaries in those groups, includes: rank, deal size, current market cap, and market cap change.

After Market Report

Review of all deals that have come public in the last twelve months. This report may be sorted in several different formats including by alpha, sector, underwriter and % gain. We will provide two formats from the above data items for review. This report is delivered biweekly.

Quiet Period and Analyst Pipeline Report

Review of all deals due to come out of the quiet period or those that have just recently come out of the quiet period. Addition daily updates as recommendations occur with analyst track record. Reviews gain since IPO came public and open price among other variables.

Proprietary Trading Models: IPO Daily Action Track and Secondary Action Track

Daily models developed by IPO Financial to give short term buy and sell signals.