The IPOX® Week, December 6th, 2021

  • IPOX® Indexes extend losses to third week as equity risk and skew spikes.
  • IPOX® 100 U.S. Index declines -5.59%. Marvell Technologies (MRVL US) leaps.
  • IPOX® SPAC (SPAC) follows weakness in equities. 12 new SPACs launched in the U.S.
  • Global IPO market cools as spike in volatility and declines hit pre-IPO valuations.

WEEKLY SUMMARY: Higher U.S. equity risk (VIX: +7.16%%), on declining U.S. yields after weak U.S. unemployment numbers, more losses in China-linked exposure and perceived to be weak forecasts amongst key growth stocks pressured the IPOX Indexes ahead of rollover and U.S. Futures & Options expiration week. In the U.S., e.g., the IPOX® 100 U.S. Index (ETF: FPX), key gauge for the performance of newly listed companies in the United States, declined -5.59% to +0.75% YTD, lagging most U.S. benchmarks anew. Here, amid broad-based liquidation selling amongst high-growth unseasoned satellite positions, 84/100 portfolio holdings declined, with the average (median) equally-weighted stock slumping by -6.61% (-5.21%) Sentiment extended to the International (ETF: FPXI) and European (ETF: FPXE) level with selling pressure in China-linked stocks increasing towards the week-end after the announcement of 06/2021 U.S. IPO Chinese behemoth ride sharing operator DiDi Global (DIDI US: -22.97%) to de-list from the U.S. exchanges. IPO M&A as measured by the IPOX® M&A (GINDX) remained one of the best performing broad-based and diversified equity strategies, benefiting from strong earnings amongst select holdings.

IPOX® 100 U.S. (IPXO) Investing with the “FPX” ETF since 2006

IPOX® PORTFOLIO HOLDINGS IN FOCUS: Computer hardware-related exposure beat out software big for one more week, driving some of the significant skew in the return distribution across individual IPOX® portfolio holdings, including IPOX® 100 U.S. Index (ETF: FPX) top holding chip makers IPO M&A’s Marvell Technologies (MRVL US: +16.11%) and ON Semiconductor (ON US: +6.22%), as well as 03/2018 Swiss IPO Sensirion (SENS SE: +5.24%), a member of the IPOX® 100 Europe (ETF: FPXE). Amongst beleaguered China-linked exposure, we also note the gains in IPOX® International (ETF: FPXI) holdings banking and brokerage giants China Merchants Bank (3968 HK: +3.56%) and China Merchants Securities (6099 HK: +3.55%) last week. Strong earnings but perceived to be weak guidance hit key application software makers and industry bellwethers, such as 04/2018 IPO DocuSign (DOCU US: -45.88%), 09/2020 direct listing Asana (ASAN US: -36.82%) and 10/2018 IPO Elastic (ESTC US: -26.75%) for example.

Select IPOX® Indexes Price Returns 2020 Last Week YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 -4.00 -6.98
IPOX® International (IPXI) (USD) (ETF: FPXI) 72.15 -4.14 -13.91
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 -5.59 0.75
IPOX® M&A (GNDX) (USD) n/a -1.46 n/a
IPOX® ESG (IPXT) (USD) 42.29 -7.78 -0.94
IPOX® SPAC (SPAC) (USD) 48.52 -5.64 -14.04
IPOX® EV (IPEV) (USD) n/a -6.14 28.86
IPOX® Indexes: Europe/Nordic
IPOX® Europe (IPOE) * (USD) (ETF: FPXE) 35.14 -2.79 4.56
IPOX® Nordic Core (IPND) (EUR) 59.89 -3.85 12.32
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 -4.38 -6.10
IPOX® China Core (CNI) (USD) 88.02 -6.28 -39.46
IPOX® Japan (IPJP) (JPY) 25.75 -3.56 9.64

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOZ1). *also available In UCITS format in Europe in EUR (EFPX IM,), USD (IPXE LN), and GBP (FPX LN).

IPOX® SPAC INDEX (SPAC): The Index fell by -5.64% to -14.04% YTD and +27.67% since its 07/30/2020 launch. SPAC news include: 1) 7 SPACs Announced Merger Agreement include: a) Apollo Strategic Growth Capital (APSG US: +0.61%) with American Express Global Business Travel; b) Adit EdTech Acquisition (ADEX US: +0.10%) with bitcoin mining company Griid and c) CF Acquisition VI (CFVI US: +21.64%) with Canadian video platform Rumble. 2) 6 SPACs Approved Business Combinations include a) Altimeter Growth with South Asia ride-hailing giant Grab (GRAB US: -32.68%); b) 890 5th Avenue Partners (ENFA US: -5.11%) with digital media firm Buzzfeed and c) TPG Pace Solutions (TPGS US: -1.72%) with vacation rental platform Vacasa (VCSA US); 3) Northern Star Investment II (NSTB US: -0.92%) terminated its deal with Apex Clearing. 4) 12 new SPACs launched last week In the U.S.

WEEKLY GLOBAL Deal-flow Review and Outlook: Just 7 IPOs launched globally, with the average equally weighted deal adding +8.66% based on the difference between the final offer price and respective Friday’s close. Following the spike in volatility and slump in growth stocks and in recent IPOs, the U.S. IPO market remained quiet. Abroad, NetEase’s music unit Cloud Village (9899 HK: -2.93%) fell on its debut in H.K., while Romanian packaged consumer goods distributor Aquila (AQ RO: +0.00%) closed flat in the country’s larges local IPO ever. Warren Buffet-backed Brazilian digital bank Nubank (NU US), infrastructure software company HashiCorp (HCP US) and Uganda’s largest telecom operator South Africa’s MTN Group spin-off MTN Uganda are set to go public this week. Other IPO news include a) China Tourism Group Duty Free scrapped its $5B H.K. IPO; b) South Korean conglomerate Hyundai Motor Group’s construction unit Hyundai Engineering readies IPO; c) Dubai government set to consider Emirates Airlines IPO:

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

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