The IPOX® Week, December 20th, 2021

  • IPOX® Indexes retreat, follow benchmarks lower during Q4/2021 expiration week.
  • Biotech holdings rise amid increase in COVID and COVID variant cases and more IPO M&A.
  • IPOX® SPAC (SPAC) sheds -2.29%. 15 new SPACs launched in the U.S. last week.
  • Large IPOs close week below final offer price. Saudi and small IPOs in Japan in focus.

Weekly Summary: Amid big intra-day swings across the benchmarks, lower long-term U.S. yields and higher equity risk (VIX: +15.41%), the IPOX® Indexes declined during Q4 ’21 Futures and Options expiration week. After staging a strong recovery into the weekend, e.g., the IPOX® 100 U.S. Index (ETF: FPX) – key benchmark for the performance of IPOs and Spin-offs – still shed -3.20% to -0.14% YTD, in line with the Nasdaq 100 (NDX: -3.25%). In the IPOX® 100 U.S. (ETF: FPX), 63/100 portfolio holdings declined, with the average (median) equally weighted stock recording a loss of -1.74% (-1.71%), in line with last week’s performance of U.S. small caps. Amid index re-balancing, declines extended to markets abroad, including Europe (ETF: FPXE) and Europe’s

IPOX® Europe ETF (ETF Ticker: FPXE) Investing since 2018

Nordic region, as well as Asian Pacific markets. Here, the IPOX® 100 Europe (ETF: FPXE) dropped by -2.50% to +4.19% YTD, a large -246 bps. more than when compared to the European market. Indiscriminatory selling linked to select China-linked health care and information technology stocks, as well as profit taking ahead of the New Year pressured both the IPOX® China (CNI) and IPOX® Japan (IPJP), e.g.

IPOX® Portfolio Holdings in focus:  A reversal in sentiment for global biotechnology firms ahead of year-end amid an increase in global COVID- and COVID variant cases and more IPO M&A benefited select IPOX® biotech exposure. Companies with significant upside focus included French biotech Valneva (VLA FP: +13.04%), 04/2020 IPO Zentalis Pharma (ZNTL US: +12.42%), 04/2021 IPO Swiss-based Polypeptide (PPGN SE: +9.52%) and 05/2019 IPO Britain-based Bicycle Therapeutics (BCYC US: +8.24%). Amid the continuous re-rating of global car makers, we also note another good (relative) week for 10/2021 IPO Swedish car maker Volvo Car (VOARB SS: +7.46). With end-of-year repositioning and tax loss selling in full swing, losses ran deep across many unseasoned companies in the more speculative high growth sectors such as IPOX® heavyweight Europe’s payment processor Adyen (ADYEN NA: -10.12%), gaming platform Roblox (RBLX US: -11.64%), lender Upstart Holdings (UPST US: -13.42%) and car vending machine operator and used car dealer Carvana (CVNA US: -17.44%).

Select IPOX® Indexes Price Returns 2020 Last Week YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 -2.45 -7.63
IPOX® International (IPXI) (USD) (ETF: FPXI) 72.15 -3.76 -16.96
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 -3.20 -0.14
IPOX® M&A (GNDX) (USD) n/a -1.42 n/a
IPOX® ESG (IPXT) (USD) 42.29 -2.43 -2.55
IPOX® SPAC (SPAC) (USD) 48.52 -2.29 -16.49
IPOX® EV (IPEV) (USD) n/a -6.47 20.76
IPOX® Indexes: Europe/Nordic
IPOX® Europe (IPOE) * (USD) (ETF: FPXE) 35.14 -2.50 4.19
IPOX® Nordic Core (IPND) (EUR) 59.89 -1.82 14.74
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 -3.98 -10.08
IPOX® China Core (CNI) (USD) 88.02 -7.45 -42.09
IPOX® Japan (IPJP) (JPY) 25.75 -4.00 3.89

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOH2). *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 -2.29% to -16.49% last week to -16.49% YTD and +24.04% since Its 7/30/2020 launch. SPAC news include: 1) 11 SPACs Announced Merger Agreement include a) SVF Investment Corp 3 (SVFC US: +0.81%) with warehouse robotics and automation system provider Symbotic; b) Spring Valley Acquisition (SV US: +0.50%) with nuclear energy firm NuScale Power and c) AEA-Bridges Impact Corp (IMPX US: +1.52%) with Harley-Davidson EV Motorcycle spin-off LiveWire. 2) 5 SPACs Approved Business Combinations Include a) Isos Acquisition with bowling centers operator Bowlero (BOWL US; -1.94%); b) Investindustrial Acquisition (IIAC US: +2.33%) with Italian apparel company Ermenegildo Zenga (ZGN: 12/20) and c) CM Life Sciences III (CMLT US: -1.32%) with biotech EQRx (EQRX US: TBD). 3) SPAC terminated merger agreement include SCVX with robotics electronics manufacturing software provider Bright Machines. 4) 15 new SPACs launched in the U.S. last week.

WEEKLY GLOBAL Deal-flow Review and Outlook:  19 IPOs launched globally last week, with the average equally weighted deal adding +4.56% based on the difference between the respective final offer price and Friday’s close. Large IPOs all slipped from their respective IPO price, including U.S. software provider Samsara (IOT US: -2.96%), Japanese payment firm Net Protection (7383 JP: -20.55%) and Chinese logistics behemoth Hangzhou SF Intra-city Industrial (9699 HK: -9.38%). Amid the Christmas holiday season, U.S. and European IPO markets are expected to stay quiet, while Saudi food company Almunajem Foods (ALMUNAJE AB) and a list of small Japanese IPOs are lined up to go public overseas. Other IPO news Include a) Indonesia’s GoTo Group (Gojek/Tokopedia) preps for IPO; b) social media firm Reddit and London-based private equity firm TPG filed for an 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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