The market entered October with new YTD lows, which coupled with earnings blackouts and macroeconomic pressures, created a challenging environment for issuers to sell stock. Contributing to uncertainty was the highly anticipated mid-month CPI print, which showed core inflation rising 6.6% in September, the highest level since 1982. Following the print, the broader market rally led to a surge in issuance, buoying what would otherwise have been one of the lightest months of the year.

 

Mobileye (MBLY) was in the spotlight, going public on 10/26, floating only 6% of outstanding shares and initiating its well awaited separation from Intel (INTC). Pricing above the $18-$20 range at $21/sh, the initial IPO valuation of about $16bn was slightly above the $15.3bn price tag Intel paid for the company in March 2017 and well below the rumored $50bn target from earlier this year. The reduced deal size and discounted valuation proved to be a successful strategy as the stock gained 38% day one.

 

Prime Medicine (PRME) priced a $175m IPO at $17/sh (in range). After trading down 9.6% in its opening session on 10/20, the biotech company has since rallied for a cumulative gain of 10.7% to end the month.

 

On the month, there were 24 FOs/blocks raising $5.1bn in equity capital vs. 51 deals which raised $5.5bn in September. The average discount on deals >$50m was 6.1%, with first day performance yielding an average 7.6% gain. The largest deal was a $748m registered block trade (post shoe) of Cameco Corp (CCJ) on 10/12 which priced at a 15% discount and traded up 1.6% the first day.

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Healthcare companies accounted for 43% of capital raised in October, the fourth consecutive month where the sector contributed to over a third of deal flow. Vaxcyte (PCVX), Biohaven (BHVN), Denali Therapeutics (DNLI), Insmed (INSM), and DICE Therapeutics (DICE) were all able to raise over $250m in follow on equity capital.

 

Among the notable changes to the ECM pipeline this month was a report that Instacart would likely be postponing their 2022 IPO plans. The company announced that it confidentially filed for an IPO earlier this year and reportedly slashed its internal valuation to $13bn, 67% lower than the $39bn valuation it raised its latest round at in March 2021. Cybereason also appears to be changing course, with reports the endpoint security vendor is looking to find a buyer. The company reportedly filed confidentially for an IPO earlier in the year as well, but like Instacart, it appears plans are changing amid market instability.