Building Products Maker Azek Surges In Debut

After opening higher, building products maker Azek ended its first trading day up over 18%. The company raised about $765 million in the biggest initial public offering of the week.


Vroom (VRM) opened on June 9 at $40.25 after having priced its 21.25 million share IPO at $22.00 per share. The deal size was increased to 21.25 million shares from 18.75 million shares, and the deal priced above the $18.00-$21.00 range. Goldman Sachs, BofA, Allen & Co., and Wells Fargo acted as joint book running managers for the offering. Vroom is an e-commerce company that allows people to buy and sell used vehicles.

After the stock's opening, Benchmark analyst Michael Ward initiated coverage of Vroom with a "Buy" rating and a $55 price target. The company's initial public offering "seems to have hit the target," said the analyst, who added that he was making an "attempt to get out in front of a pricing opportunity in the early days of trading."

Vroom's e-commerce segment offers access to consumers, provides transparent pricing, real-time financing, and home delivery while the virus-related shutdown resulted in an expansion of selling vehicles on-line, Ward tells investors. Until there is a clear path to profitability, he sees a multiple of revenue being the best way to determine valuation for Vroom shares, noting that he is using two times expected 2020 revenue to arrive at his $55 target.

Lantern Pharma (LTRN) opened on June 11 at $14.80. The company had priced 1.75 million shares at $15.00. ThinkEquity acted as lead book running manager for the offering. Lantern Pharma is a biotech redeveloping abandoned drugs for non-small cell lung cancer.

The AZEK Company (AZEK) opened on June 12 at $27.50. The company had priced 33.25 million shares at $23.00. The deal size was raised to 33.25 million shares of common stock from 31.25 million share of common stock, and priced above the $19.00-$21.00 range. Barclays, BofA, Goldman Sachs, and Jefferies acted as joint book running managers for the offering.

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Disclaimer: "Opening Day" is The Fly's recurring series of stories on the latest initial public offerings, their performance, analyst commentary and upcoming ...

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