Last year was a record-setting one for Orange County companies making their debuts on Wall Street.
Eleven local companies went public in 2021 via traditional IPOs, while others went public by reverse mergers using the increasingly popular SPAC (special purpose acquisition company) route.
It’s the largest collection of local companies to go public in at least two decades.
The 11 companies on this week’s list that had traditional IPOs raised a combined $15.2 billion—another all-time annual record for OC—and now have a cumulative valuation more than $106 billion. Altogether, they employ 23,149.
The list doesn’t include companies that went public via SPACs last year, including Newport Beach’s Landsea Homes Corp. (Nasdaq: LSEA) and Aliso Viejo’s Indie Semiconductor Inc. (Nasdaq: INDI).
Rivian Rules
The gorilla in the room is Irvine-based Rivian Automotive LLC, which raised $13.5 billion in its IPO to go along with the $10.5 billion it previously gathered. Among early pre-IPO investors in the electric vehicle maker were Amazon, Ford Motor Co. and T. Rowe Price Associates.
After Rivian (Nasdaq: RIVN) began trading at $78 a share on Nov. 10, it jumped to almost $180 within a few days. By press time, it had settled to around $107 a share with a $90 billion market cap, making it OC’s most valuable public company.
The reason that Rivian has a higher valuation than the world’s largest automobile makers like Ford or General Motors Co. is investor excitement for electric vehicles. Larger rival Tesla Inc. has a $1.1 trillion market cap.
“Rivian may be down 40% from its post-IPO high, but the entire EV space presents 2022 with the chance to reward performers and punish over-hyped messes,” said David Bahnsen, founder and managing partner of Newport Beach’s The Bahnsen Group, which has $3.4 billion in assets under management.
“Whether it be EV or anything else, 2022 will likely be the year that the tide comes down, and we get a good look at what all these companies are wearing,” Bahnsen added.
Of the 11 companies on this week’s Business Journal list, only two are trading at prices higher than their first day closing price.
Heavyweights
TV maker Vizio Holding Corp. has the second-highest valuation of the 11 traditional IPOs, running around $3.6 billion as of last week.
Founder William Wang toyed with an IPO about five years ago before postponing it. Last March, he pulled the trigger (NYSE: VZIO).
“My dream was to make the home everyone’s favorite place,” Wang said in the company’s prospectus. The company’s biggest area of growth is no longer from selling TVs; it is providing targeted advertising to users of its TV platform.
Orange-based Alignment Healthcare Inc. (Nasdaq: ALHC) went public at $18 a share in March and while now around $14, it still sports a $2.6 billion market cap, third-highest of the 11 on this week’s list.
John Kao in 2013 founded the Medicare Advantage provider of customized health plans that can include coverage for things like vision, dental and hearing exams for elderly or disabled beneficiaries.
“Becoming a publicly traded company marks a milestone in Alignment Healthcare’s journey to reinvent healthcare as we know it,” he told the Business Journal last March. “It allows us to reach a much larger audience, with the trust, support and backing of our new shareholders and investors.”
Mixed Reactions
Irvine-based Viant Technology Inc. (Nasdaq: DSP) received a mixed reaction on the Street. The Irvine-based company is positioning itself to grab a larger share of the digital advertising market, helping advertising agencies and marketers get placement for their customers across a variety of channels, including desktops and mobile phones.
Viant burst into trading on Feb. 10 at $25 per share, rapidly climbing to $64 in the following days. It raised about $250 million in gross proceeds from the IPO.
The company’s valuation had settled back to around $10 as of last week for a $610 million market cap.
“We continued to grind it out through good times, bad times and now to be able to go public and hopefully with a great future,” Viant co-founder and CEO Tim Vanderhook said last year.
An IPO looked promising at first for Anthony Hsieh, founder and CEO of Foothill Ranch-based mortgage provider loanDepot Inc. (NYSE: LDI). A year ago, the hard-driving Taiwanese native was named the Business Journal’s Businessperson of the Year in the financial sector. Its stock opened at $14 in February and almost reached $40.
“It really is an honor to be newly listed on the New York Stock Exchange and we look forward to building long-term value for all of our stakeholders including our new shareholders,” Hsieh told analysts on his first conference call as a publicly traded company.
However, as fears that increasing mortgage rates would dampen revenue, investors have become more skittish on loanDepot, which has seen its shares drop to $4.65 and a $1.4 billion market cap.
“When you see companies like loanDepot drop so much from their IPO in such a quick period of time yet knowing the mortgage finance industry has been on fire, it really makes you wonder what happens to the equity of that company in a legitimate downturn,” Bahnsen said. “We always want to avoid IPOs that are more about monetizing founders than they are raising new growth capital for the future.”
Healthcare Cluster
Irvine’s MDxHealth hasn’t yet convinced Wall Street about the merits of its tests that provide noninvasive early detection of prostate cancer.
Since the company (Nasdaq: MDXH) opened at $12 in early November, its shares have dropped to as low as $8.30; at press time, the share price hovered near $9 and a $163 million market cap.
Aliso Viejo’s RxSight Inc. (Nasdaq: RXST) has its sights set on becoming Orange County’s next big public company in the ophthalmology sector. The Aliso Viejo firm makes what it says is the first artificial lens that can be adjusted after cataract surgery to customize and optimize a patient’s vision.
Its largest shareholder is a fund managed by Bill Link, one of OC’s top medtech investors and who sits on the boards of notable OC-based medical device makers Edwards Lifesciences Corp. (NYSE: EW), Glaukos Inc. (NYSE: GKOS), and Tarsus Pharmaceuticals Inc. (Nasdaq: TARS).
RxSight opened in July at $16 and has since drifted downwards to around $10.51 and a $287 million market cap.
Laguna Hills’ Sonendo Inc. (NYSE: SONX), started by Olav Bergheim and his son Bjarne Bergheim, says tooth decay is “the most prevalent chronic disease globally.”
It reports over 600,000 patients have been treated with its GentleWave Systems since it went to market in 2017.
“We’re changing root canal therapy in a big way,” Bjarne Bergheim told the Business Journal last year.
Alas, Sonendo opened at $12 in October and has since fallen in half to around $6.51 and a $171 million market cap.
Other Notables
Costa Mesa’s MeridianLink Inc., which provides cloud-based software solutions for small banks and credit unions, opened in July at $26 for a $2.2 billion valuation. Â
In September, co-founder and Chief Strategy Officer Tim Nguyen, who as a young boy had fled Vietnam, won the Business Journal’s Innovator of the Year award for 2021.
Since the IPO, the stock’s hovered around $21 and a $1.7 billion market cap.
Irvine’s Xponential Fitness Inc., which owns a variety of gym chains, has gotten quite a workout this year.
Its shares opened at $12 each in July, fell to as low as $9.87 and have since rebounded to around $21 and a $970 million market cap.
Moving iMage Technologies, a Fountain Valley-based digital cinema company that serves larger national movie theater chains and smaller operators alike, had the smallest IPO of the 11 on the list.
The company (NYSE: MITQ) started trading on July 8, raising about $12.3 million in gross proceeds for sales and marketing and possibly acquisitions.
Moving iMage shares opened at $3 apiece on its first day of trading. Since then, they’ve dropped to $2.20 each as of Dec. 28 to give the company a market cap of about $23.7 million.
The 91% decline is the biggest on this Business Journal’s list of IPOs
For more on four of the 11 execs of companies on this week’s list of IPOs, see next week’s print edition of the Business Journal, which includes our Businesspeople of the Year.
