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by Seth Parker on June 10th, 2020

The US IPO boom again

This week, an initial public offering of building materials producer Azek Co and Vroom, a company that sells used cars on the Internet, is expected, Market Watch writes.

After the virus epidemic hit the market and companies had to shift their strategy to strengthen liquidity, a new emission boom began in the stock market last week. So far, only 43 IPOs have passed in 2020, which is 31% less than a year ago. The successful IPOs of this year include technology and digital companies, and those that produce or sell goods provide the services needed during the quarantine and general self-isolation periods, such as Zoom Video Communications Inc., Slack Technologies Inc., and Moderna Inc., which is developing a vaccine against coronavirus.

The largest IPO this week will be the entry to the Azek building materials market, which is projected to raise $625 million. In its handout, the company focuses on being “a leading developer and manufacturer of beautiful, maintenance-free and environmentally friendly products, oriented into an attractive and rapidly growing market.”

The proceeds of capital are necessary for the company to pay off debt and general corporate goals. In the first six months of the financial period from 2020 to March 31, its sales grew to $411.6 million. For the pandemic period, the company was forced to cut staff and take out loans worth $1.2 billion.

Its competitor Trex Inc. – The world’s largest manufacturer of wooden flooring made $42.4 million in profit in the first quarter, and its sales amounted to $200 million. Since the beginning of the year, its shares have grown by 38%, ahead of the S&P 500 index, which fell by 0.8%.

The second major company to hit the market this week was online retailer Vroom Inc., which began trading on Tuesday. The stock price was $22, which is higher than the price range of $18-20. Vroom managed to raise almost $500 million with a valuation of $2.5 billion. Today, its shares rose 110% to $46.34 apiece. The company’s prospectus noted that its losses in the first quarter of this year amounted to $41.1 million, and profit increased by 60% to $375.8 million.

Carvana Inc. – the main competitor of Vroom – helps users find a car using a mobile application, became public in 2017. Today, its shares were trading more than 600% above the IPO price in 2017.

The vaccine manufacturer, pharmaceutical company Vaxcyte, intends to raise to $210 million and use the funds to finance its clinical trials. She hopes to promote the VAX-24 vaccine for clinical trials in the second half of 2021.
There are foreign companies among the candidates: for example, Burning Rock Biotech, a Chinese manufacturer of cancer tests, intends to raise to $210 million by selling 13.5 million American depositary receipts for $13.50 – 15.50 each.

By Seth Parker

Seth is a professional trader with over 10 years of experience. He specializes in the technical analysis. His main focus is on the pure Price Action. In his trading, Seth used the trends, supports and resistances and technical formations. Always, the most important thing in his strategy is the money management. Seth reached a proficiency in trading and for the past three years is doing that for a living enjoying the sun and lovely beaches of the Spanish coast.

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