Shares of Walmart-backed Ibotta opened at $117 on Thursday and peaked at $117.59 after pricing at $88 on Wednesday in an IPO that was oversubscribed by 20%.
In late afternoon trading, shares had retreated to about $105, still a 19% rise from Wednesday’s close. Initial pricing for the shares—6.56 million were sold at $88, generating more than $577 million—had been in the range of $76 to $84.
“We had just overwhelming demand,” CEO Bryan Leach told Coins2Day on Wednesday. “There was nowhere near enough stock. There still isn’t.”
Matt Kennedy, a senior IPO strategist at Renaissance Capital, which provides pre-IPO research and manages two IPO-focused ETFs, told Coins2Day that Ibotta pricing $4 above the top of its range reflected, at least in part, the company’s growth. For the year ending Dec. 31, revenue was up 52% to $320 million. For 2023, the firm reported net income of $38 million compared with a loss of nearly $55 million in 2022.
“It’s very encouraging to see that demand was resilient enough to price above the range,” Kennedy added. “VC-backed tech IPOs have been very rare. There’s only been a handful in the last two years.”
But after that lull, the market’s heating up—especially for tech. Last month, Reddit raised $748 million in a much-anticipated offering, and Astera Labs grabbed $713 million. But shares of both have declined since steep rises immediately after the IPOs, so Ibotta could prove a real test for the recent crop of public offerings, Kennedy said.
“Because of how few tech IPOs there are, any deal with a lot of publicity can generate that excitement,” Kennedy told Coins2Day. “People are anticipating pops, and I think that played out with Reddit and Astera Labs.”
The year’s biggest IPO so far still belongs to Amer Sport, the maker of Wilson tennis racquets, which raised $1.37 billion in February, according to data from Dealogic. Next week, Rubrik, a Microsoft-backed cloud data security provider, is scheduled to make its debut on the NYSE in a deal that could raise as much as $713 million.
But unlike Ibotta, Rubrik has yet to turn a profit, Kennedy noted, which could temper investor demand for the stock of another “potentially fast-growing but extremely unprofitable” tech firm.