Pricing IPO at More than Expected Range Wayfair Raises $319 Million
Wayfair Inc. the Boston online retailer of home furnishings is all set to begin trading today on the New York Stock Exchange at a higher than expected share price. This will be the twentieth Massachusetts company this year, to go through an initial public offering.
The online home-goods and furniture retailer sells brands like Birch Lane and Joss & Main. It raised $319 million in its IPO, pricing its shares surpassing the marketed range.
Last night the online retailer said that it will offer 11 million shares priced at $29 per share. This is definitely higher than the $25 to $28 range which the company had set in its regulatory filings, in an arrangement which would raise $319 million.
Wayfair mentions its competitors as Amazon, One Kings Lane Inc. and EBay Inc. and in its list.
An analyst at Wedbush Securities Inc, Michael Pachter says that Wayfair can actually ask for a superior valuation due to its model that requires less investment to grow.
He said, "You will pay a huge multiple if the only thing they need to do to expand is get more people to put stuff up for sale. If Amazon wants to build its core business, it needs to build more distribution centres. The Amazon model is expensive and it's hard to do."