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Reddit Awakens IPO Market After A Long Slumber – Who Is Galderma?

Published April 8, 2024 1:36 PM
Giuseppe Ciccomascolo
Published April 8, 2024 1:36 PM

Key Takeaways

  • Central banks signaling the end of interest rate hikes creates a favorable environment for IPOs.
  • Recent successful IPO debuts like Reddit and Astera Labs set a positive tone.
  • Several other potential IPO candidates are on the horizon across various industries.

Initial public offerings (IPOs) are making a strong comeback, gaining traction not just in the US but globally. As central banks signal a halt to interest rate hikes, the stock market is becoming an increasingly attractive and welcoming avenue for investors to exit.

While Reddit has received significant attention, the IPO landscape encompasses a wide array of opportunities beyond US-based internet companies.

Beyond Reddit

In the past few weeks, the US witnessed two notable tech debuts – Reddit and Astera Labs – making impressive debuts in the stock market. Astera’s stock surged from $36 to $70 in its initial three sessions, setting a bullish tone. Meanwhile, Reddit’s first day saw a remarkable 48% rally, commencing at the top end of its projected range.

This quarter has already seen notable filings from companies like Rubrik  and UL Solutions . Both are expected to contribute over $1 billion to the $9.6 billion raised via IPOs on US exchanges this year.

Further potential IPO candidates this quarter include Lineage Logistics, Ingram Micro, Novelis, Ibotta, Turo, Marex Group, and Contineum Therapeutics.

For investors seeking exposure to IPO potential, there are ETFs available that track recent IPOs. The Renaissance International IPO ETF  (ticker: IPOS; expense ratio: 0.6%) focuses on newly listed non-US IPOs. The First Trust US Equity Opportunities ETF  (ticker: FPX; expense ratio: 0.6%) offers exposure to the 100 largest US IPOs through the IPOX-100 US Index.

Opportunities In The EU

Numerous opportunities are emerging not just in the US but also in the EU. Permira, a private equity firm, is gearing up for an IPO of Italian luxury brand Golden Goose, renowned for its distinctively worn-in sneakers. GG’s debut should happen within the next three months.

OLB Bank, backed by Apollo, is also preparing for its public debut. Additionally, DKV Mobility, a fuel card provider in CVC’s portfolio, is resuming its IPO plans after postponing them last year. CVC is anticipated to enter the market with an IPO exceeding €1 billion, potentially following the Easter holiday.

Europe has already witnessed a number of successful IPOs this year. Renk, a tank gear manufacturer, nearly doubled its €15 ($16) issue price since debuting on the Frankfurt Stock Exchange in February. This success prompted accelerated IPO plans from Douglas and Galderma, aiming to capitalize on the positive market sentiment.

In Italy, 2i Rete Gas, the second-largest gas distribution operator controlled by F2i, is set to be listed. Market speculation also hints at a potential IPO for Prada, a company that needs no introduction.

Why Everyone’s Talking About Galderma

Two weeks ago, the Swiss skincare company Galderma  made its highly anticipated debut on the market, injecting a fresh glow into investor sentiment. The maker of cosmetic fillers and medical creams experienced an impressive 18% surge on its debut. This signaled a renewed enthusiasm for newly listed firms in Europe, where numerous companies are eyeing public offerings.

Galderma’s entrance into the market, Europe’s largest IPO since Porsche in September 2022, was nothing short of a market triumph. Within hours of its debut in Zurich, its shares soared above the initial price. This instilled confidence amid concerns about investor appetite following German retailer Douglas’ lackluster debut, which saw a 12% decline on its first day.

Both Douglas and Galderma, both previously owned by private equity firms, had been the focus of considerable market attention leading up to their listing days, underscoring the pivotal moment for the IPO market, which teetered on the edge of anticipation and uncertainty.

Douglas, owned by CVC, raised €850 million ($920 million) to address debt concerns, pricing its shares at €26, the lower end of the indicated range, and initially trading at €22.70.

Galderma, backed by EQT, raised approximately 2 billion Swiss francs ($2.23 billion), with its shares opening at 61 francs on the SIX Swiss Exchange. This marked a 15% increase from the IPO price of 53 francs per share, positioned at the upper end of the indicated range.

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