Demand for initial public offers (IPO) in the United States continues to remain strong with shares in financial technology company Chime Financial soaring when they made their sharemarket debut on Thursday (Friday AEST).
Chime (NASDAQ: CHYM) shares surged 59% from their IPO price when they began trading on the Nasdaq exchange at $43, valuing the digital bank at US$18.4 billion (A$28.2 billion) and extending the pattern of new listings being well sought after.
The shares traded between $36.19 and $44.19 and closed at $37.11 as 35.8 million changed hands.
Chime sold 25.9 million new shares and existing stockholders sold 6.1 million shares at $27 per share in the IPO.
“This is an amazing day for Chime. It’s an amazing day for our nearly 1500 Chimers (employees) but more importantly, this is an amazing day for our members,” Chief Financial Officer Matt Newcomb said in an interview with Yahoo Finance.
Although the price jumped on listing, Chime’s market capitalisation is below the $25 billion valuation implied by its last funding round in August 2021.
“You can control what you can control. Markets come and markets go. What we can control is being focused on our mission and building our business,” Newcomb said.
Digital banks have grown fast in recent years with cheap, mobile-based financial services that appeal to younger users and underserved consumers, according to Reuters.
With features such as no-fee accounts, early access to direct deposits and user-friendly apps, they have positioned themselves as accessible alternatives to traditional banks.
Defence and space technology company Voyager Technologies (NYSE: VOYG) doubled in value when it debuted on the New York Stock Exchange on Wednesday. Stablecoin issuer Circle’s (NYSE: CRCL.N) stock has risen fourfold since its IPO last week.
"While this is clearly a strong IPO window now, there is no guarantee it will continue," Mergermarket’s Head of Equity Capital Markets Samuel Kerr was quoted in a Reuters story as saying.
