US ECM WEBCAST I: THE GREAT EQUITY RECAPITALIZATION IN A POST-COVID 19 FUNDING ENVIRONMENT - Sponsored by
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US ECM WEBCAST I: THE GREAT EQUITY
RECAPITALIZATION IN A POST-COVID 19 FUNDING
ENVIRONMENT
Sponsored by:
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Sensitivity: ConfidentialSponsored by:
• Anna Pinedo – Co-Head of Capital Markets, Mayer Brown
• Seth Rubin – Head of Equity Capital Markets, Stifel
• Geoff Feldkamp – Head of TMT ECM Origination, Barclays
• Robert McCooey – Senior VP of Listing Services, Nasdaq
• Carolyn Saacke – COO of Capital Markets, NYSE
• Robert J. Jackson Jr. – Professor of Law, NYU School of Law
• Michael Kuchmek – Head of ECM, Schonfeld Strategic Advisors LLC.
• Stephen Lacey – US Editor, IFR (moderator)
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Sensitivity: ConfidentialUS ECM Activity
US ECM totaled $270.7bn across products in first nine months of 2020 from more than 550 transactions. Follow-
on activity led the mix of deals, accounting for 57% of total proceeds raised.
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Follow-On (US$bn) IPOs (US$bn) Convertibles (US$bn) # of US ECM Deals
*First nine months for each time period; Excludes deals less than $50m in proceeds
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Sensitivity: ConfidentialUS Convertible Bonds
US convertible bond offerings totaled $73.5bn during the first nine months of 2020 from nearly 130 transactions,
up 75% from a year ago. Technology convertibles account for 35% of total proceeds raised.
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Convertibles (US$bn) # of Convertibles
*First nine months for each time period; Excludes deals less than $50m in proceeds
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Sensitivity: ConfidentialCovid-19 Equity Recapitalizations
Equity underpins balance sheets, recovery of large corporate issuers
April 1 – $2.6bn follow-on & convertible bond
August 5 – $1.4bn follow-on partially to refinance April CB
September 15 – $1bn ATM stock sale
April 28 – $4.6bn follow-on & convertible bond
June 22 – $2.15bn follow-on & convertible bond
*First nine months for each time period; Excludes deals less than $50m in proceeds
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Sensitivity: ConfidentialSale of non-core equity stakes
PNC Financial Services, Regeneron Pharmaceuticals and SoftBank undertake transformative transactions
May 12 – PNC Financial Services’ $13.3bn secondary stock sale of BlackRock
May 26 – Regeneron Pharmaceuticals’ $6.7bn secondary stock sale of Sanofi
June 23 – SoftBank’s $15.9bn secondary stock sale of T-Mobile
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Sensitivity: ConfidentialPIPEs growing role in ECM
PIPE issuance grows to post-financial crisis highs, helping to fund large corporates
PIPEs growing role in ECM
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total Dollars Raised US$bn (LHS) Average Market Capitalization US$m (RHS)
Source: Private Raise
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Sensitivity: ConfidentialPIPEs provide flexibility
Howard Hughes, PG&E and ADT turn to PIPEs for different needs
March 31 – Pershing Square invests $500m in real estate developer via PIPE
June 8 – Hedge funds invest $3.25bn via PIPE as part of BK reorganization
June 25 – California utility raises $5.6bn combo equity-CB re-IPO
September 7 – Google invests $450m via PIPE as part of collaboration
September 15 – Apollo Global sells $435m through overnight stock sale
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Sensitivity: ConfidentialAt the market (ATM) stock programs enter mainstream
Shake Shack, Dave & Buster’s flip to public. Tesla utilizes post stock split. Hertz’s program suspended post-BK.
April 17 – Shake Shack files for $75m ATM program
April 17 – Executes $150m block sale of stock that evening
April 14 – Dave & Buster’s files for $75m ATM program
May 6 – Completes $115m FO offering that was marketed for two days
May 22 – Hertz files for bankruptcy protection
June 15 – Files for $500m ATM program
June 15 – SEC informs company of intent to review offering prospectus
June 17 – Company suspends program
August 11 – Tesla announces five-for-one stock split, effective August 31
September 1 – Files for $5bn ATM program
September 4 – Announces completion of program
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Sensitivity: ConfidentialUS-Listed IPOs
More than $53bn in proceeds raised during the first nine months of 2020 with 121 IPOs priced.
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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
US Domicile IPOs ($bn) Non-US Domicile IPOs ($bn) Number of US Listed IPOs
*First nine months for each time period; Excludes deals less than $50m in proceeds
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Sensitivity: ConfidentialUS-Listed Chinese IPOs (excluding Alibaba)
Fourteen Chinese companies priced on US exchanges during the first nine months of 2020, raising $7.4bn
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2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020
Chinese US-Listed IPOs (US$bn) # of Deals
*First nine months for each time period; Excludes deals less than $50m in proceeds
11 *Excludes Alibaba’s $25bn IPO in 2014
Sensitivity: ConfidentialUS-Listed IPO, Industry Split; First Nine Months 2020
Tech and biopharma companies accounted for more than half of US IPOs so far this year and 44% of IPO dollars
$12.7
24% $14.5
27%
25
33 21%
27%
High Technology
Financials
BioPharma
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$3.2 Media and Entertainment 10%
6% 5 Real Estate
4%2
Other
2%
$4.2
8%
44 $10.0
36% 18%
$8.9 Outer Ring: Proceeds (US$bn)
17% Inner Ring: Number of Issues
*Excludes deals less than $50m in proceeds
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Sensitivity: ConfidentialMultiple alternatives to IPO
Snowflake takes traditional route; Unity hybrid auction approach; Palantir and Asana directly list
September 15 – Raises $3.86bn on IPO, more than doubles on debut
September 16 – VC Bill Gurley labels “final proof” IPO process is broken
September 17 – Raises $1.5bn on IPO via auction process
September 18 – Gains 31% on debut, continues to perform in aftermarket
September 30 – Palantir Technologies, Asana directly list on NYSE
September 30 – Palantir trades down 5% on debut, Asana trades up 6.7%
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Sensitivity: ConfidentialSnowflake more than doubles on Sep 16 debut
Closes first-day trading at $253.90, 111.6% above offer and leaving some $4.3bn of “money on the table”
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Sensitivity: ConfidentialUnity Software uses hybrid Dutch Auction on Sep 17 IPO
Closes first-day trading at $68.35, 31.4% above offer and adds to gains in the aftermarket
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Sensitivity: ConfidentialPalantir Technologies slips on NYSE Direct Listing debut
Closes first-day trading at $9.50, above $7.25 reference but below $10.00 opening trade
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Sensitivity: ConfidentialAsana sees smoother debut after its NYSE Direct Listing
Closes first-day trading at $28.80, above both $27.00 opening trade and $21.00 reference price
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Sensitivity: ConfidentialWhat’s next?
- Direct Listing 2.0 – Direct Listings with primary raise
- NYSE proposal approved by SEC but now being re-evaluated on investor inquiry
- Nasdaq proposal being evaluated by SEC
- What are the differences between the two proposals?
- Lock-ups
- Investment banks respond to dilemma of low-float IPO with early lock-up releases.
- Foreign listings – more stringent standards appear to be on the way
- May 2020 – Nasdaq submits three proposals targeted at “Restrictive Markets”
- May 20 2020 – Senate passes the Holding Foreign Companies Accountable Act
- Requires Public Company Accounting Oversight Board to list on US securities exchange
- June 4 – White House issues Presidential Memorandum
- August 2020 – Financial markets working group comes out with proposal
- Foreign companies, exchanges response
- Chinese companies respond by listing in Hong Kong
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