Will GoDaddy Put Some Excitement Back in the IPO Market?

Source: courtesy of GoDaddy Inc. Next week’s initial public offering (IPO) for Internet registrar GoDaddy could put a market value of as much as $3 billion on the company. The company plans to offer 22 million shares in an IPO price range of $17 to $19. Pricing is currently expected on Tuesday and shares are expected to begin trading Wednesday, April 1, on the New York Stock Exchange under the ticker symbol GDDY.

Underwriters for the offering are Morgan Stanley, J.P. Morgan, Citigroup, RBC Capital Markets, Barclays, Deutsche Bank Securities, KKR, Stifel, Piper Jaffray, Oppenheimer and JMP Securities. The underwriters have an overallotment option of 3.3 million additional shares.

GoDaddy is a Web hosting and services provider to small businesses, Web design professionals and individuals. The company claims that it operates the world’s largest domain marketplace, providing website building, hosting and security tools. GoDaddy serves approximately 13 million customers. The company believes that its addressable market extends beyond small businesses and includes individuals and organizations, such as universities, charities and hobbyists.

The supply of IPOs so far in 2015 has been sharply lower than in recent years. As of the March 20, IPO ETF manager Renaissance Capital reported that 29 IPOs had priced in the United States in 2015, down about 45% from 2014. Total proceeds raised come to $4.5 billion, down about 47% compared with the same period in 2014.

In the past week, two IPOs have launched to strong demand. SolarEdge Technologies Inc. (NASDAQ: SEDG) priced Thursday’s IPO at the top of the expected range of $16 to $18, and shares opened trading at $20. The stock closed at $20.70 and traded down about 1.5% in Friday’s premarket.

The second — and perhaps more surprising — IPO for the week came Tuesday from Tantech Holdings Ltd. (NASDAQ: TANH). This was a “best efforts” IPO that priced at the bottom of its expected $4 to $6 range and offered 3.2 million American depositary shares (ADS) in a non-underwritten offering. The company, a China-based maker of bamboo-based charcoal products for industrial energy applications and household cooking, heating, purification, agricultural and cleaning uses, saw its share price more than double on the first day of trading. The stock fell back to earth to close Thursday at $6.66, after hitting a high of $9.50 on its first trading day.

The year’s most anticipated IPO to date was probably that of Box Inc. (NYSE: BOX), a cloud-storage company, that came public in late January, pricing above its expected range and closing its first day of trading at around $23, up more than 60%. Shares closed at $17.54 on Thursday.

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