By Ciara Linnane, MarketWatch
The initial public market is bracing for its biggest week of the year so far with eight deals on tap expected to raise $2.5 billion in proceeds.
With the market closed for deals in January and February partly due to the government shutdown, there have been just 26 IPOs in the year to date to raise $6.6 billion, according to Kathleen Smith, Principal at Renaissance Capital, a provider of institutional research and IPO exchange-traded funds.
That’s 42% below the 45 deals that were conducted in the same period of 2018 to raise $15.7 billion.
“We’re still below last year but that should change once we get the Uber deal in May,” said Smith.
Uber /zigman2/quotes/211348248/composite UBER -6.78% , which filed its S-1 last week, is expected to raise about $10 billion in a deal that could value it at $100 billion, but the ride-sharing giant has not yet provided any details of size.
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CEO Dara Khosrowshahi says Uber is on track to go public later this year, a move that could make it the biggest IPO of 2019. WSJ’s Jason Bellini breaks down five ways Uber is preparing itself for its market debut. Illustration: Laura Kammermann
This week’s deals will be led by online imaging site Pinterest Inc. /zigman2/quotes/211319641/composite PINS -5.04% , which has said it plans to offer 75 million shares priced at $15 to $17 each. That price range gives the company a valuation of up to $11 billion, which is a discount to its last private financing round in 2017 that valued it as $12.3 billion.
D.A. Davidson analyst Tom Forte initiated coverage of Pinterest on Monday with a neutral rating and $16.50 price target. The company “provides consumers an impressive visual-based discovery platform for merchandise and advertisers a large and growing global base of consumers with purchase intent,” wrote Forte, which is a “powerful combination” that could drive revenue and profit growth over the long run, in his view.
However, Forte argued that the midpoint of the company’s expected price range “already reflects our favorable view of Pinterest including its growth prospects.”
Zoom Video Communications Inc. /zigman2/quotes/211319643/composite ZM -0.19% , a videoconferencing company, is expected to be the second-biggest deal of the week. Zoom is offering 20.9 million shares priced at $28 to $32 each and will trade on Nasdaq under the ticker symbol “ZM.”
Zoom is growing at a 100% rate, it’s profitable and it has a business that is easy to understand, said Smith. “It’s a nice business model, and people apparently love the product,” she said.