The IPOX® Week, January 18th, 2021

  • IPOX® trades mixed as international growth stocks consolidate; IPOX® 100 U.S. (ETF: FPX) gains while U.S. benchmarks fall.
  • Perceived corporate actions propels IPOX® SPAC (SPAC) strategy to +7.75% YTD; Churchill (CCIV) soars +83.05%.
  • “Hot” IPO market continues with IPOs around the globe recording big initial run-ups. More IPOs lined up.

IPOX® trades mixed last week:   Amid big strength in the U.S. Dollar, more adverse U.S. government regulatory actions ahead of the transfer of power, weak U.S. economic data, stabilizing U.S. yields and a jump in equity risk (VIX US: +12.89%), the IPOX® Strategies finished U.S. options expiration week mixed. Tracking non-U.S. domiciled exposure, the IPOX® International (IPXI), e.g., followed by the $850 million “FPXI” ETF, declined by -1.07% to +1.14% YTD as investors took profits across European and APAC-traded growth exposure after the big run-up with U.S. trade actions pressuring the IPOX® China (CNI) towards the weekend. In the U.S., however, big gains in specialty growth stocks and in the IPO M&A portion  of  the

portfolio propelled the diversified, FANG-free IPOX® 100 U.S., benchmark for the $2.1 billion “FPX” ETF. The portfolio added  +0.64% to +4.98% YTD last week, closing out the 2nd week of 2021 trading at a fresh weekly all-time high and extending the YTD lead vs. the S&P 500 (SPX) and Nasdaq 100 (NDX) by +211 bps. to +466 bps. YTD and by +294 bps. to +433 bps. YTD, respectively. Ahead of more U.S. earnings, individual companies in focus included personalized shopping platform operator 2017 IPO Stitch Fix (SFIX US: +32.96%), alternative meat producer 2019 IPO Beyond Meat (BYND US: +18.63%) and Chinese biotech 2017 IPO Zai Lab (ZLAB US: +17.18%). Typically value-tilted IPO M&A contributed to the solid showing of the IPOX® 100 U.S. (ETF: FPX) last week, including serial IPO acquirer, Indiana-based drug maker Eli Lilly (LLY US: +14.64%) and non-invasive molecular cancer screening test maker WI-based Exact Sciences (EXAS US: +11.34%). Amongst the weak performing portfolio holding, we note continued declines in select European and U.S.-based payment processors last week, including Italy’s industry consolidator Nexi (NEXI IM: -3.82%) and U.S.-based Fidelity National Information Services (FIS US: -6.44%), while 2020 Siemens Spin-off alternative energy firm Siemens Energy (ENR GY: -8.38%) stood out, pressured by stunning claims over trade secret theft related to competitor General Electric (GE US: -0.17%).

Select IPOX® Indexes Price Returns (%) 2020 2021 YTD Week
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 3.95 0.34
IPOX® International (IPXI) (USD) (ETF : FPXI) 72.15 1.14 -1.07
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 4.98 0.64
IPOX® ESG (IPXT) (USD) 42.29 3.72 -0.27
IPOX® SPAC (SPAC) (USD)** 48.52 7.75 4.23
IPOX® EV (IPEV) (USD)*** 11.02 12.51 -1.19
IPOX® Indexes: Europe/Nordic
IPOX® 100 Europe (IPOE) (USD) (ETF: FPXE) 35.14 -1.03 -3.10
IPOX® Nordic Core (IPND) (EUR) 59.89 -0.19 -1.62
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 3.63 0.43
IPOX® China Core (CNI) (USD) 88.02 5.43 -1.61
IPOX® Japan (IPJP)(JPY) 25.75 -1.37 -2.32

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOH1). Source: Bloomberg. Prices exclude dividends. **since July 30, 2020, ***since Nov. 17, 2020.

IPOX® SPAC Index (SPAC):   The portfolio added +4.23%, rising +60.04% since its 7/30/20 launch. SPAC news include 1) 4 SPACs Announced Merger Agreement/LOI: a) Crescent Acquisition (software provider LiveVox); b) Hudson Executive Investment (online mental health therapy provider Talkspace); c) ArcLight Clean Transition (E-bus manufacturer Proterra); and d) VPC Impact Acquisition (digital asset marketplace Bakkt). 2) 1 SPAC Completed Business Combination include: South Mountain Merger Corp with B2B payment company Billtrust (BTRS). 3) Deals reportedly in talks include Churchill Capital IV (EV manufacturer Lucid Motors); Fast Acquisition (Fertitta’s Casino & Dining assets); and CF Finance III (lidar maker AEye). 4) 24 new SPACs flooded the market on the week.

IPO Deal-flow Review and Outlook:  At least 14 IPOs launched last week with the average (median) equally weighted deal adding +50.96% (+37.22%) based on the final offer price and respective close. Buy-now-pay-later platform Affirm (AFRM US: +138.78%), online thrift store Poshmark (POSH US: +98.10%) and HK-traded Tencent-backed health care data provider Yidu Tech (2158 HK: +147.91%) all surged. Pet store P/E-backed Petco (WOOF US: +53.94%) was also well-received, while Israel-based game developer Playtika (PLTK US: +17.11%) also jumped. Notable debuts this week include German luxury retailer Mytheresa (MYTE US) and Chinese e-cigarette maker RLX Technology (RLX US). Other IPO news include: 1) Blackstone-backed dating app Bumble, advertising software firm Viant, mortgage lender LoanDepot, and gene therapy start-up Sana file for IPO, 2) Barclays’ online retailer Very Group and Thai Beverage’s beer unit weigh IPO. 3) The European IPO market awaits a series of deals including food delivery company Deliveroo, bootmaker Dr. Martens, German’s eyewear retailer Mister Spex, Vodafone’s Vantage tower unit, EQT-backed cybersecurity firm Utimaco, enterprise software provider SUSE, SoftBank-backed online used car marketplace Auto1, French music distributor Believe, and Advent-backed Polish postal locker provider InPost.

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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