GoDaddy is a go go go in IPO debut
GoDaddy (GDDY), the Internet domain registrar and Web hosting service best known for outrageous TV ads, soared in its stock debut Wednesday, trading at 31% above its initial public offering price.
The IPO was expected to raise $460 million after 23 million shares priced at $20 each were sold. After order imbalances delayed trading by 35 minutes, shares closed up $6.15, or 31%, to $26.15.
GoDaddy had earlier offered 22 million shares in the $17 to $19 range.
Scottsdale, Ariz.-based GoDaddy, which features professional race car driver Danica Patrick as its spokeswoman, had 12.7 million customers, including many small-business operators, at the end of 2014, generating $1.4 billion in revenue but net losses of $143 million.
"The challenge is that the company has not been profitable, and has posted losses so far,'' says Reena Aggarwal, an IPO expert and professor of finance at Georgetown University's McDonough School of Business. "On the positive side, the firm is a leader in its space, revenues, customers, free cash flows have been growing. What happens to the stock in the near term is likely to be driven more by broad market conditions rather than the fundamentals of the company."
Founded in 1997 as
Wednesday's offering values GoDaddy at more than $3 billion.
Long known for risque ads featuring scantily clad women, GoDaddy pulled a controversial 2015 Super Bowl ad about a puppy falling off a truck but making his way back to his family's farm after an arduous journey.
When the puppy arrives back home, his owner greets his with a hug and the words, "I'm so glad you made it home because I just sold you on this website I built with GoDaddy."
Shares trade on the New York Stock Exchange under the symbol GDDY.
Contributing: Elizabeth Weise