Dark Horse IPOs Surge Before Top Holders' First Chance to Sell

(Bloomberg) -- Three of the year's smallest and best-performing initial public offerings will be tested over the next week, when some large holders get their first chance to sell shares.

Lockup periods will soon expire for under-the-radar IPOs such as Evolus Inc., Cardlytics Inc. and Motus GI Holdings Inc. Among U.S. companies that raised less than $100 million in an IPO this year, this triad comprises three of the best performers. Medical aesthetics maker Evolus has risen 68 percent from its listing, marketing software maker Cardlytics has surged by 44 percent, while colonoscopy technology maker Motus GI is trading 23 percent above its IPO price.

The three companies went public in early February, diving into the most volatile IPO waters since 2015. The stocks have outperformed as the market spent the next six months recovering from that low point. But lockup periods have been blocking some large holders from selling shares, including certain insiders and pre-IPO investors.

Those restrictions will be lifted on the six-month anniversary of each IPO: Aug. 7 for Evolus, Aug. 8 for Cardlytics and Aug. 13 for Motus GI, according to data compiled by Bloomberg. Short interest in both Evolus and Cardlytics represent more than 10% of each stock's float, according to financial analytics firm S3 Partners.

Nearly 70 companies have gone public on U.S. exchanges this year in IPOs that raised less than $100 million each, a 25 percent increase versus this time last year. These stocks have risen an average of 2.7 percent from their listing price, according to data compiled by Bloomberg.

To contact the reporter on this story: Drew Singer in New York at dsinger28@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Scott Schnipper, Brad Olesen

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