The IPO slate this year is jammed packed with names we know and tend to love… incuding Shake Shack, Smashburger, Etsy and Party City. These are just a handful of consumer companies that may tap the IPO market on the heels of last year which was the best for IPOs since 2000. “The themes that often come through in 2014 resonate again in 2015.” observes Kathleen Smith, Principal, of the Renaissance IPO ETF (IPO), which is compromised of newly public companies.
Smith points to the success of restaurant chain Zoe’s Kitchen (ZOES) which raised over $87 million last year and has been a winning stock for investors. “That is setting the stage for the tremendous interest we are seeing in Shake Shack.” On Tuesday, the burger chain disclosed in an SEC filing that it plans to raise around $80 million and is prepared to sell additional shares if demand is stronger than expected. Shares will be listed on the New York Stock Exchange (ICE) under the symbol (SHAK).
Investors have also been riding the success of arts and crafts retail chain Michaels (MIK). Those shares have returned over 40% after its IPO raised $473 million last year. Smith says this bodes well for other niche retailers considering IPOs. “We think Party City will be of interest to investors and I think the play on this craft theme comes into what Etsy is trying to do.” Earlier this year, Bloomberg News reported Etsy could go public in the first quarter of this year, while Party City last updated its SEC filings at the end of 2014.
These deals should keep the the momentum for public offerings solid predicts Smith, but likely not as strong as 2014. “We had a record breaking 2014 and we think it might be hard to exceed those numbers particuarly because the largest IPO ever got done, Alibaba (BABA).” The Chinese e-commerce giant rasied $22 billion, which represented 26% of the $85 billion IPOs raised last year.