Online greeting card retailer Moonpig saw its shares rise by 25% within minutes of pricing its London initial public offering today, underlining bullish investor appetite and setting the stage for other e-commerce companies to follow.
Stock in the newly listed firm was trading at around 440 pence per share shortly after floating at 350 pence.
The listing price valued the company at around £1.2 billion.
The deal, the second largest UK listing this year after Dr Martens' debut last week, sees the company sell around 5.7 million new shares and existing shareholders sell 134.6 million shares, setting the deal size at £491.2m.
It represents around 41% of Moonpig's issued share capital on admission.
Like many other online retailers, Moonpig has seen its sales soar during the pandemic.
"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 said.
"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," the source added.
Moonpig is among the first of several companies eyeing a stock market listing in Europe this year.
In London, Deliveroo and Darktrace are expected to complete deals this year, while in Europe, Germany's Auto1 is on track for a listing.
A number of other firms such as WeTransfer in Amsterdam and Trustly in Stockholm also have IPO aspirations, boosted by increasing investor appetite for stocks showing strong potential for growth in an uncertain global economic environment.
Moonpig's selling shareholders include a host of private equity firms including GoldPoint Partners and Exponent, as well as Hampshire County Council.
