By Christopher Sherman
In the past few months, some big companies released their IPO’s to the stock market for trading. An IPO, which stands for “Initial Public Offering”, is the first time that a company has their stock released to the public to be bought and sold on the major stock exchanges. Before a company “goes public”, there are usually very few investors that are involved in the company. A company can decide to go public in order to raise money for expanding and growing the business that they would not otherwise be able to raise with just a few investors. A private company is not required to report their earnings, but public companies must file their reports with the Securities and Exchange Commission (SEC). The SEC monitors public companies and makes sure they are complying with all securities regulations. Three companies that were talked about extensively before their recent IPOs are Snap Inc. (SNAP), J. Jill (JILL), and Canada Goose (GOOS).
Everyone has heard of Snap Inc., the parent company of Snapchat and the new photo-taking glasses, Spectacles. Snap’s IPO was released on March 2 and opened at $24 per share. It had a high for the day of $26.05 and a low of $23.50, closing the day with a share price of $24.48. The stock closed on Thursday, April 13 at a price of $20.19, down 18.9% from its initial price. Why has the price been decreasing? Instagram, who introduced Stories which is a feature similar to Snapchat, recently released that they have hit over 200 million daily users, surpassing the 160 million daily users Snapchat reported. Additionally, Snap is in the midst of a lawsuit from one of its former employees claiming that they have been inflating the number of users they have. These factors are threatening Snap’s stock price, but it has only been public for a little over a month and a half. It will be interesting to see what happens as the Instagram Stories get even more popular and the lawsuit continues.
Headquartered in Quincy, MA, J. Jill is a woman’s clothing chain that has been operating for over 60 years. Their stock went public on March 9 at a share price of $12.75. On their website, the company released a press statement stating the results of their fourth quarter and fiscal year. Their total net sales increased from $562 million to over $639 million, a 13.7% increase. Also, the gross profit was about $428 million (67% of total net sales) compared to $373 million (66.5%). Many analyst firms such as Bank of America Merrill Lynch, Deutsche Bank, and Morgan Stanley have the J. Jill stock at a strong buy rating, meaning they believe it is underrated and they highly recommend that investors buy it. As of April 13, the price per share was $12.92 and is looking to continue to rise.
Many people walk around campus wearing their Canada Goose coats in the winter. These coats are made with coyote fur and filled with duck down and cost on average $600-$900. Canada Goose went public on March 16 at a price of $18 and closed that day at $16.08. Since then, the stock has been rather volatile with a beta of 2.79, meaning that it is 179% more volatile than the market, and the price rises and falls more than the market does. Canada Goose has been ridiculed by PETA and animal rights activists for their use of fur and down feathers in their coats. However, this fact does not seem to stop many investors in buying the stock. Canada Goose has been doing very well and many experts are impressed with how well it is doing. It does not look like it is going to be slowing down any time soon.