Moonpig shares jumped 17% as the group joined the stock market on Tuesday, valuing the company at £1.4bn.
The company placed 140m shares at an initial price of 350p. New investors will have a 14% stake in the greetings card company and retailer.
“Now is the perfect time for us to bring the company to the public market, and we are excited about Moonpig’s prospects for the future,” said chief executive of Moonpig Group, Nickyl Raithatha.
The group’s floatation comes after a strong Christmas, where Moonpig reported £156m in sales in the six months to the end of October. This was a record number as the group benefitting from high street closures and people staying at home amid the pandemic.
Dominick Mondesir, EMEA Private Capital Analyst at PitchBook, commented on Moonpig’s IPO and said: ‘’The short-term performance of the Moonpig IPO reflects equity investors willingness to pay for growth, especially for tech-enabled assets. The stock was priced at the top end of its valuation range and surged in its first day of trading.
The challenge for Moonpig and its private equity owner—who are heavily reliant on post-IPO performance due to lock up periods— will be executing on an M&A and organic strategy that allows the company to grow into its lofty valuation once earnings normalize and a sense of normalcy resumes through lifting lockdowns. A potential headwind will likely come from retaining new customers, particularly those in the baby boomer and gen x cohort, who tend to prefer the brick & mortar experience of gift picking,” he added.