The IPO market finished a perfect 16-for-16 in the second quarter.
This past week, Jefferson Capital (JCAP US) priced with the buy-side in mind and rewarded investors with a four-point premium at open.
The company that describes itself as a leading analytically driven purchaser and manager of charged-off and insolvency consumer accounts priced a full-size deal of 10.0mm shares at $15.00 (low-end of the range) and opened at $19.00 for a gain of 26.7% at open.
The stock traded in a fairly tight range in its opening session and closed at $18.54 for a gain of 23.6%. The stock finished its second session back at the opening print, $19.00.
Channel Checks Oversubscribed
According to our sources, the deal finished multiple-times oversubscribed with high-quality conversions from long-only and sector dedicated accounts. There was no “formal” price guidance available and the deal was on track to price “within the range”. The final outcome being a low-end pricing appeased value investors sufficiently.
We heard from multiple sources who were “traditional” IPO investors that remained squarely “on the sidelines” for this deal based upon the niche financial sector in which this company operates it. But ultimately, it came down to an attractive valuation versus peers. Additionally, it shows the strength of the lead left underwriter, Jefferies, who continues to produce strong results in an array of sectors.
Q2 Goes Perfect in the IPO Market
The second quarter of the IPO market wrapped up with 16 IPOs all opening positive. Among the 16, ten were priced at the high-end of the range or above. The average opening print of the deals in the second quarter was 38% above issue. It is our opinion that the valuation being initially placed on the companies that set terms are highly attractive. This is bringing buyers to the aftermarket and the deals, broadly speaking, have found “staying power”.
The best performing deal, Circle Internet Group (CRCL), remains 482% above issue as of the close on Friday.
A total of 32 IPOs have debuted thus far in 2025 with an average opening print of 25.8%. The same 32 deals closed Friday’s session at +39.6% versus issue. These are the type of statistics that showcase the “IPO window” opening up nicely at this time.