The Performance of Financial and Payment Company IPOs

Navigator Edition: April 2016
By: Omid Tofigh

High profile initial public offerings (IPOs) of companies in the payments space in 2014 and 2015 have been a mixed bag in terms of returns to investors.  Some of the payments companies have not only underperformed the S&P, but also the Renaissance Capital IPO Index1, an index tracking performance of company stocks (across all sectors) after IPO, while others have outperformed the IPO Index and the S&P.  The top performers have been Yodlee, a financial aggregator platform, whose share price run up was fueled by the acquisition of the company, announced in August 2015 and completed in November by Envestnet, and Synchrony Financial which posted solid asset and earnings growth in 2015.  Hardest hit have been the marketplace lending platforms, as Lending Club and OnDeck have each under-performed the S&P Index by more than 50%.  There has also been a stark reduction in the number of IPOs in the current environment including several withdrawn IPOs, including that of LoanDepot, a Quicken Loans competitor, with a personal loan platform.

Figure 1: Payment Company IPO Performance

Figure-1_-Payment-Company-IPO-Performance1 EOD close on IPO date. 2 EOD price on April 15th, 2016 (except Yodlee).
Source: Renaissance Capital – manager of IPO-focused ETFs.

1Renaissance Capital – manager of IPO-focused ETFs.

For more information, please contact Omid Tofigh, Principal,, specializing in M&A Advisory.

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