Shares of Ecommerce Business Moonpig Soar 25% on IPO Debut

By Mariliana Fotopoulou Tuesday, February 2, 2021

Shares of the ecommerce business Moonpig climbed by 25% minutes this morning in London, just minutes after making its public trading debut.

A gift box on top of a star-filled surface.

Ecommerce Boom Still Alive

Moonpig stock price jumped to around 440p per unit from 350p on Tuesday, minutes after the business made its initial public offering (IPO) debut. The company reached a valuation of roughly £1.2 billion ($1.64 billion).

The online retailing business sold about 5.7 million new shares while the existing investors sold 134.6 million shares, reaching the deal size of £491.2 million ($670.6 million). The IPO has covered about 41% of the company’s issued share capital on admission.

Just like its competitors, the company has also seen a large growth in online sales amid the coronavirus pandemic. Moonpig, which mainly sells greeting cards, gifts, and flowers, represents one of the first European companies to consider a stock market debut. Online habits that were formed among consumers during lockdowns are likely to remain.

“This is a business with high margin and cash flow and a 65% market share in online cards in the UK at a time when COVID-19 has accelerated the trend of buying cards and gifts online,” a source familiar with the deal told Reuters.

“It is also a high growth area - online cards and gifts are an earlier stage in the cycle, with online cards only about 10-15% of the market so far compared to 25-30% in the fashion sector.”

Oliver Brown, a fund manager at RC Brown, said that the business “could become the go-to online marketplace for gifting.” He added that the company’s plans to expand into the US and Australia could further increase its growth potential.

The other British companies eyeing an IPO this year include Deliveroo and Darktrace. Investors’ large interest in new stocks and emerging startups indicates a strong growth potential, which prompts many other European companies to consider going public. Startup Savant recently reported that the ecommerce startup Berlin Brands Group aims to invest $302 million in D2C business acquisitions.

The company’s IPO was jointly coordinated by investment banks Citi and JP Morgan, as well as HSBC, Jefferies, and Numis. The company’s selling shareholders are a group of private equity firms such as GoldPoint Partners and Exponent, and Hampshire County Council.

Moonpig stock price now trades at 433.8p in London, according to TradingView data.

Summary

Shares of Moonpig, the company that is known for selling greeting cards, rose by 25% minutes after its IPO debut in London, suggesting an increasing appetite for stocks among investors.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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