GoDaddy (GDDY) Stock up +31 Percent After Initial Public Offering
Shares of GoDaddy Inc. (GDDY) closed Wednesday at $26.15, up +6.15 or +31 percent from its initial offering price of $20 per share. The company went public yesterday in its initial public offering, selling 23 million shares at the $20 offering price and raising over $460 million. GoDaddy's valuation after the initial sale came to more than $4 billion.
Founded in 1997, Scottsdale, Arizona based GoDaddy Inc. is the world's largest ICANN (Internet Corporation for Assigned Names and Numbers) accredited Internet domain registrar.
GoDaddy employs about 4,000 people and is known for its celebrity spokespeople that include World Wrestling Federation wrestler, Candice Michelle, actor Jean Claude Van Damme and IndyCar racecar driver Danica Patrick. Last year, GoDaddy reported a loss of -$143.31 million on revenue of $1.387 billion.
While many investors have jumped on board in yesterday's offering, GoDaddy has not turned a profit since 2009 and has lost $622 million in the last three years. In addition, the company is saddled with considerable debt after the 2011 leveraged buyout by the three private equity companies. Nevertheless, the company has enormous name recognition and a great position in its market.
GoDaddy had originally intended to sell 22 million shares in a range of $17 - $19 per share but decided to offer an additional million shares and bump the price up to $20 per share to meet the demand. Many analysts are cautious on the new stock due to the company's recent performance, with some analysts avoiding the stock altogether. Rapid Ratings, a financial rating service, gave the company a financial health rating of only 26 in a scale of 100 that indicates an elevated risk of default.
GoDaddy's Chief Executive Officer, Blake Irving responded to an interviewer when asked about the timing of the company's IPO, saying, "We just wanted to launch in the best possible window. In fact, we went so far as to make sure we'd hit the road after the FOMC meeting happened, so that we'd know the results. There was a lot of noise around oil prices and unemployment and the strength of the dollar. If Janet Yellen was going to provide language that would strongly indicate something like significant and imminent rate hikes, we wanted to know about it.
This morning's premarket has had the stock fluctuating in a narrow range, with fractional moves up and down around yesterday's closing price. The next few days will set the tone for the stock as the initial excitement settles and the stock finds a comfortable level. Investors are focused on the company's outstanding cash flow and growing revenues as the principal reasons for company to be valued in excess of $4 billion.
Other News About GDDY
GoDaddy product unevolved: Steinberg
CNBC analyst Jon Steinberg criticizes the company after using GoDaddy and Wordpress, saying they are hard to use
GoDaddy CEO Defends Business Model
Fox news interviews GoDaddy CEO Blake Irving.
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