IPO Activity Heats Up Ahead Of Holiday Weekend

Listing activity quickened a bit into  holiday weekend, adding to year-to-date tallies. The PYMNTS IPO/SPAC Tracker recorded that through the end of the last week in May (and headed into Memorial Day weekend in the U.S.), there were 16 payments-related initial public offering (IPO) announcements, outpaced by the 27 banking-related issues.

Headlines swirled as Paymentus came to market, listing on the New York Stock Exchange, with a roughly 40 percent jump in its trading debut to end the day at $28.61, up from its issue $21 issue price.

Paymentus CEO Dushyant Sharma told Karen Webster that platforms and modernizing bill payments can transform the model to a “managing spend” mindset through an Instant Payment Network. He told PYMNTS that a relatively concentrated number of monthly bills — 10 of them — represent 58 percent of household spend, at $4.6 trillion in the United States alone.

Elsewhere, Flywire also went public, announcing its IPO at $24 per share, the upper limit of its $22 to $24 per share price range, as has been reported. Coming into the weekend, the company’s shares were trading at just under $34.

Also this past week, Fortune Rise Acquisition, a special purpose acquisition company (SPAC), filed with the Securities and Exchange Commission (SEC) to raise as much as $85 million in an IPO.

In what might be a sign of the continued headwinds (or at least speedbumps) among SPACs, as reported by Renaissance Capital, EG Acquisition, a blank check firm, last week went public, raising $225 million, but offering, as the site noted, 2.5 million fewer units than had been anticipated.

SPAC Slowdown In The Cards? 

In an interview with PYMNTs conducted by written exchange, David Erickson, Wharton senior fellow and lecturer of finance, and author of an article titled “Will 2020 Be Seen as the Year of the SPAC Bubble?” said the slowing of  SPAC listings comes as “the market was overheated by ‘hype’ in certain sectors (i.e., early stage EV companies) that were able to make aggressive forecasts (through the SPAC combination process); and in many cases, these companies have under-delivered on those forecasts; and caused many of the more speculative SPAC stocks to trade off significantly.”

He noted that, with a nod toward SEC staff statements and bulletins issued over the spring, “I expect the SEC to get more aggressive on regulation of SPACs. The only thing that probably delayed this was the transition to the new administration at the beginning of 2021 and the recent approval of the new SEC Commissioner.” The SEC, he said, could limit SPAC combinations’ desires to make forward looking statements, “by increasing the scrutiny and potential liability similar to what companies face in the IPO process.”