Rhodium Enterprises Delays IPO Amid Choppy Market

Rhodium is a digital-asset-technology company that began mining Bitcoin in September 2020. It had filed to sell about 7.7 million shares at $12 to $14 each and planned to trade on the Nasdaq under the ticker RHDM. B. Riley Securities and Cowen are lead underwriters on the deal, a prospectus said. 

Four Springs Capital Trust, a REIT, was also scheduled to trade Thursday, but it’s not clear if the offering has priced. Four Springs was seeking to sell 18 million shares at $13 to $15 a share. It planned to trade on the New York Stock Exchange under the symbol FSPR, a prospectus said. The company did not return messages for comments. 

Rhodium is the latest company to pull its IPO. Justworks, the HR software company, postponed its deal last week due to market conditions. Trajector, the benefits software company, also yanked its offering earlier this month. It did not provide a reason for the withdrawal.

Unlike 2021, where even weak companies could find demand, the environment for IPOs turned more challenging this week. New issues typically take their cue from the broader stock market, which is bumpy right now.

The

Nasdaq
on Wednesday dropped into correction territory, down almost 11% from its late November all-time high, though it was up 1.6% as of midday on Thursday. The Renaissance IPO exchange-traded fund (ticker: IPO), which tracks companies for three years after they go public, is down 17% this year as of Wednesday’s close. This compares to the

S&P 500,
which is down 5.5%. 

New issues have cooled considerably this year. Twenty-two companies, including special purpose acquisition companies, or SPACs, have gone public as of Jan. 18, raising roughly $5.2 billion, Dealogic said. This is down 65% from the 63 new issues that listed their shares during the same time period in 2021, and were valued at $22 billion. 

“For the vast majority of companies, the IPO market is shut down,” said Matt Kennedy, senior IPO strategist at Renaissance Capital. Kennedy said it was “ambitious” for Rhodium to attempt its offering considering the drop in Bitcoin prices. The cryptocurrency has dropped nearly 40% from its November high. 

Some microcap companies are able to get through, Kennedy said. He pointed to

Yoshitsu (TKLF), a Japanese beauty retailer, which rocketed 700% higher in its first day of trading on Tuesday.

TPG (TPG), the large private equity firm, also opened last week, rising 15% during its debut. 

The IPO market is “filtering out some of the weaker companies or out of favor industries,” Kennedy said. Cloud-based software has come under pressure, he said, while Bitcoin is currently weak. 

Firms are still seeking to go public. Dynasty Financial Partners, which provides technology solutions for financial advisors, has filed to raise $100 million with its IPO. The company did not disclose how many shares it would offer or their price range. That will come with future filings.

Dynasty plans to trade on the Nasdaq under the ticker DST, according to a Jan. 19 regulatory filing.

Goldman Sachs and

JP Morgan are lead underwriters on the deal. 

Dynasty has a sticky platform and a high margin, fast growing business that will likely generate demand during the current challenging IPO market, Kennedy said. “These are the types of companies that [will] do fine in this market. [Dynasty] would’ve done even better last year,” he said. 

Write to Luisa Beltran at luisa.beltran@dowjones.com