Minneapolis-based Tactile Systems, an at-home compression therapy device company, will go public on Thursday with an offer of $10 per share
, significantly lower than the offering ranges submitted to the Securities and Exchange Commission in June.
The company plans to raise $40 million from the IPO, 33 percent less than the earlier midpoint price of $14 to $16, according to Renaissance Capital
, a manager of IPO-focused ETFs.
TCB wrote about Tactile’s initial offer range in late June and noted that it will be Minnesota’s first IPO
in about 18 months.
Kathleen Smith, a principal at Renaissance, said that the lower price suggests the company got pushback from valuation-sensitive investors. Stock market corrections in the middle of 2015 and in January 2016 cause many investors to lose money or make very little return, leaving them squeamish. At least 8 IPOs have priced 33 percent or more below their midpoint offer range so far this year, and the average IPO gets priced 10.5 percent below its midpoint.
“We’re in a very tough IPO market,” she explained. “It’s an investors market.”
Still, the lower offering shouldn’t suggest trouble ahead for Tactile, she said, noting its growth and profitability. And the company has few peers to be compared to, which made initial valuations trickier.
Tactile’s stock (TCMD) will be priced Wednesday night and list on the Nasdaq on Thursday, Smith said.