June 16, 2021
Subs -
WE ARE LIVE.
Qualified Canadian Readers Only.
I hope everyone is reading this on a sunny patio with a nice beveragino in hand.
The Federal Reserve released its latest policy and economic update this afternoon, guiding towards at least two rate hikes in 2023. 10s traded up 6 bps to about 1.56%, rocking equity markets slightly.
Lots of activity across Canadian equity, debt and M&A markets this week.
I sat in on several retail broker-focused management presentations this week, which usually gives me a good laugh during Q&A as some folks tend to ask obscure questions. One question in particular:
“Why is the stock down from its IPO levels?"
Boy if that is not a loaded question for management. Not the first time I’ve heard that question - I recall speaking with a former CFO who shared a question emailed to him from a shareholder, praising the stock and dividend yield followed by:
“Why is the stock trading down lately?”
Never gets old.
Several large IPOs and follow-ons hit the market this week, keeping the desks at many of the banks busy - especially across the independent dealers such as Canaccord, Stifel and Raymond James:
AcuityAds closed its NASDAQ IPO for $57.5M of gross proceeds at a price of $10.15/sh. The listing was led by Canaccord Genuity and Needham, along with a syndicate of Canadian dealers including RBC, TD, Roth, Eight Capital, Paradigm and Echelon. The stock has performed exceptionally well on the TSX, returning 970% over the past year.
Hut8 hit the market with a $115M bought deal of units. The deal was again led by Canaccord Genuity and Stifel, and was well subscribed for from Canadian and US hedge funds.
Q4 is out to market its $150M IPO of commons. The public offering is being led by CIBC, National and Credit Suisse. For those not familiar, the company is a capital markets communications firm, or investor relations, making this a very interesting listing. Fortunately for Q4, and shareholders, the firm is of much higher standard than the likes of let’s say…Hybrid Financial? Shimmying their way into the syndicate is once again Canaccord Genuity, Stifel, and Infor Financial.
Blue Apron and Very Good Food tapped the equity markets this week for $20M and $15M, respectively, adding to the growing capital inflow to plant-based and food-centric companies. On the same note, Gravitas will be hosting its food industry conference tomorrow afternoon. I am not promoting the event, but for those attending, please do share any insights.
Lastly, Earlier this week LMPG Inc. decided to withdraw its public offering citing market conditions. From the information I’ve been able to source around the street, the company tested the waters at a very high valuation - received feedback as such, with no interest - and proceeded to continue with its valuation. Ultimately, there was no demand in the book and the IPO had to be pulled. Chalk it up to Covid induced volatility? Yeah, why not.
ECM World
Top 5 Notable Transactions
Q4 Inc.
$150M IPO of commons
CIBC / NBF, CS
AcuityAds
$57M IPO of commons
CG / Needham, RBC, TD
Hut8 Mining
$115M Bought of units (1 sh + ½ wt)
CG / Stifel
Guru Organic Energy Corp.
$52M Bought of commons
Stifel / CIBC
WeCommerce Holdings
$30M Bought of commons
TD / CG, RayJay, Stifel
Cheers,
G.G.