As we talked about last week, the IPO markets tend to cool off as we head into the holiday season and it usually starts around Halloween. After last weeks busy IPO week, there are only two potential IPO's this week and together they are hoping to raise about $425 million. First we have a Chinese company that claims to be the leader for high performance data centers. If you like growth then this one may be for you as they estimate 20%+ forward growth. We also have a shale mining company which is coming just after we say two other energy companies recently go public.
October will go on record as the busiest month of the year for IPO's with a total of 19 new issues. With the normal, holiday slowdown in addition to the elections on November 8th, many analysts expect the IPO markets to start to wind down for the year.
GDS Holdings (NASDAQ: GDS) is looking to raise $250 million by offering 19.25 million shares at a range of $12-14. The company is a rapidly growing operation in the co-location services space. This includes power and cooling as well as IT and cloud based space. Most of their existing clients (370 of them) are in the internet and financial space which is where 95% of its revenue comes from. According to their filing, net revenue rose 47% for the first 6 months this year to $66 million. This increase did lead to a tightening of gross margins though.
Smart Sand (NASDAQ: SND) is in the mining and processing of Northern White raw "frac" sand, mostly used in oil and gas drilling. The company is looking to raise $175 million by offering 10 million shares at a range of $15-18. Based on its 3.3 million tons of annual sand processing capacity and 244 million tons of proven reserves, Smart Sand has a reserve life of 73 years. As of the first half of 2016 the company only shows six customers. Also of note is that revenue fell 20% to $19 million. Their closest, publicly traded competitors have traded strongly recently, up 33-55% in the last three months.