WOOF! Petco Soars In First Day Trading
Pet care retailer Petco Health and Wellness Company Inc.’s shares surged around 63% in the first day trading on Thursday after the Initial Public Offering, reflecting strong demand for pets as majority of people are confined to their homes during the Covid-19 pandemic crisis.
On the Nasdaq, the shares, which are trading under the ticker symbol WOOF, opened at $26, reflecting 44% above its IPO price. The company’s shares closed at $29.40 for the day, putting its market value at $6.4 billion.
On Wednesday, the animal supply chain store, which operates around 1,470 stores across the United States and Puerto Rico, sold 48 million shares for $18 each, raising about $864 million. This was higher than its initially expected price target of $14 to $17.
The San Diego-based retailer, which was founded in 1965, also operates more than 100 in-store veterinary hospitals. According to its filings, Petco had a net loss of $25 million for the 39-week period ended October 31 on net sales of $3.58 billion.
The company initially went public in 1994, but was taken private later by TPG and Leonard Green following acquisition. In 2016, investors including private equity firm CVC Capital Partners and Canada Pension Plan Investment Board acquired Petco for $4.6 billion.
Following the IPO, Petco will continue to be controlled by its largest investors CVC Capital Partners and Canada Pension Plan Investment Board, among others. Goldman Sachs Group Inc. and Bank of America Corp. led Petco’s IPO.
Petco Chief Executive Officer Ron Coughlin reportedly said that the company’s growth accelerated through the pandemic, despite stiff competition. According to him, Petco has competitive advantages over its rivals, and it plans to add vet services to more of its stores.
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