After a surge of enthusiasm, recent IPOs are pulling back.
As Market Insights has documented on multiple occasions, April and May marked a bullish turn for initial public offerings. Volumes have been at their highest levels since 2014. Several new companies also rallied out of the gate, a sharp contrast compared with recent years.
But this week, traders are taking profits in some of the best performing names.
Chinese tech stocks Iqiyi (IQ) and Huya (HUYA) doubled, or even tripled, between April and mid-June. Dropbox (DBX) surged more than 50 percent. Others like Pivotal Software (PVTL), Bilibili (BILI), Smartsheet (SMAR) and Docusign (DOCU) made similar moves. But this week, they’re down least 10 percent.
All these companies are in the high-flying technology sector, which has also been under pressure. Other recent IPOs with less notoriety are rising this week, especially energy firms like Cactus (WHD), Apergy (APY) and HighPoint Resources (HPR).
Did you see our special report about oil heading into the current OPEC meeting?
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In conclusion, big movers in the tech space face profit-taking while ignored energy companies are showing life. This isn’t a trade recommendation, just a reminder that the the IPO market is finally interesting again and worth watching!