U.S. ECM Recap

Q3 2023 U.S. ECM Issuance Falls Despite the Largest IPO in Nearly Two Years

U.S. ECM activity fell for the first quarterly decline of the year yet remained elevated as compared with the same quarter in 2022:

  • Including SPACs, 184 offerings raised $39.9B

  • September marked the the most active month of issuance in the third quarter with 73 offerings completed for $21.0B in proceeds

  • The average weekly activity increased from 12 offerings in 2022 to 14 YTD

  • Q3’23 IPO proceeds growth remained steady with mean gross proceeds of $229.6M

  • Average Q3’23 registered follow-on proceeds increased for the second consecutive quarter from $198.5M in H1’23 to $225.1M in Q3’23

  • Arm Holdings Limited successfully raised $5.2B making it the largest IPO since Rivian Automotive, Inc. in Nov 2021, accounting for 63.0% of IPO proceeds and 13.0% of all proceeds raised in Q3’23

Q3 Trends

  • Including Unregistered Block activity tracked by CMG, Q3 transaction volume increased to $38.9B, a 51.5% increase year over year and a 15.2% decrease from the prior quarter (excluding SPACs)

  • IPOs raised $8.3B, representing a 226.7% increase over the same period last year via 36 offerings, while follow-on issuance raised $30.7B representing a 32.4% increase over the prior year via 142 offerings

  • Technology was the most active sector raising $10.5B (26.9% market share) followed by Healthcare $8.0B (20.6% market share) and Industrials $7.0B (17.9% market share)

  • On a dollar-weighted basis, IPOs returned 22.0% from offer to first day close (vs. a mean of 18.1%)

  • On a dollar-weighted basis, registered follow-ons returned 2.4% from offer to first day close (vs. a mean of 3.3%)

H1 2023 vs. Q3 2023 Dollar-weighted One-day Returns

IPOs21.9% vs. 22.0%

SPACs1.1% vs. 1.1%

Marketed FOs2.1% vs. 3.3%

Overnight FOs4.7% vs. 4.1%

Registered Blocks(0.3%) vs. (0.3%)

Unregistered Blocks0.2% vs. 0.2%

Largest Q1 Dollar-weighted Alpha Contributors (1-Day)

Arm Holdings Limited

09/13/23$5,227.5M IPO +24.7%

Oddity Tech Ltd

07/18/23$423.7M IPO +35.8%

RayzeBio, Inc.

09/14/23$357.6M IPO +38.9%

Discount Trends (Mean File to Offer): H1 2023 Vs. Q3 2023

  • Marketed FOs – (19.4%), (7.9%)
  • Overnight FOs – (15.4%), (16.5%) vs. H1'23 & Q3 2023 % to VWAP of: (15.6%), (16.8%)
  • Registered Blocks – (4.8%), (3.8%) vs. H1'23 & Q3 2023 % to VWAP of: (4.8%), (4.0%)
  • Unregistered Blocks – (3.1%), (2.7%) vs. H1'23 & Q3 2023 % to VWAP of: (3.0%), (2.8%)

IPO Vs. Follow-On Composition as a % of Proceeds Raised: H1 2022 Vs. Q3 2022

IPOs15.7% vs. 21.2%

FOs84.3% vs. 78.8%

Follow-On Composition as a % of Proceeds Raised: H1 2022 Vs. Q3 2022

This information provided is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. You should not act or refrain from acting on the basis of any of this information. Past performance is no guarantee of future results. CMG shall have no liability whatsoever for your use of this information.

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