Shares of Boston-based online home furnishings retailer Wayfair gained as much as 35.9 percent yesterday in its first day of trading as a public company.
Wayfair's $319 million initial public offering ranks as the eighth largest U.S.-listed Internet-related IPO this year.
"We're excited to see it open so strong, and we were really happy ... we were able to price it above the range," CEO Niraj Shah, 40, said yesterday from New York, where he and co-founder and CTO Steve Conine, 42, rang the New York Stock Exchange opening bell. "Investors, we think, were really able to understand the opportunity at Wayfair and how well-positioned we are."
Wayfair's stock closed at $37.72 yesterday, up 30 percent from the $29 offer price set Wednesday, which exceeded the company's expected $25 to $28 range. That first-day "pop" compares to an average of 13 percent for U.S.-listed IPOs this year and 26 percent for U.S.-listed Internet-related IPOs, according to New York IPO tracker Dealogic.
The 12-year-old Wayfair offers more than 7 million products, shipping most directly from distributors, through websites including Wayfair, Dwell Studio and Birch Lane and online flash sales site Joss & Main.
Investor meetings in the past couple of weeks prompted Wayfair to raise its initial offering price, according to Shah. "We met some great long-term-minded investors and saw that there was significant interest in being a Wayfair shareholder," he said. "Home (furnishings) is a very big market. It's growing nicely online, and ... Wayfair ... is growing at a significant multiple of that. That combination really makes us feel like ... Wayfair is in a really great spot."
Wayfair will use the bulk of its IPO proceeds primarily to bolster its balance sheet. "It's not necessarily earmarked for any special spending plans," Shah said. "It will put us in a great position to be flexible and take advantage of any opportunities we see over time. Our primary focus is growing the business."
The company went from 2.1 million active customers at the end of last year to 2.6 million six months later. "We do a lot of brand-building using television primarily and ... we do a lot of online advertising," Shah said.
But Wayfair has yet to be profitable. While its revenue grew almost 50 percent in the first half of the year to $574.1 million, it lost $51.4 million, primarily due to its increased spending on advertising.
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