initial public offerings (IPOs) trading on American exchanges

Friday, November 14, 2014

Virgin America (VA) began trading on the NASDAQ on 14 November 2014

  • The discount airline launched Friday on the public market, opening at $27 a share, after pricing at $23, the higher end of its initial range.
  • The $23 offering price valued the Burlingame, Calif., company at $994 million. The company said it expects to have about 43.2 million shares in total, leaving Cyrus Capital Partners LP and Virgin Group Ltd., as the company’s large shareholders.
  • Virgin launched in 2007 and fared poorly until 2013, turning around its finances by slowing growth and collecting higher fares for more of its eats. The company turned its first full-year annual profit last year and in the latest third quarter produced net profit of $41.6 million, up from $33.5 million a year earlier. Revenue rose nearly 5% to $405 million.

The upstart airline formed by billionaire Sir Richard Branson soared 25% out of the gate Friday from its IPO price of $23. The deal raised more than $300 million.

Virgin America CEO

The company is based in Northern California and now worth about $1 billion.

It's going public at a time when airline stocks are flying especially high. Delta (DAL) is up over 60% this year, for example, while JetBlue (JBLU) has climbed almost 50%. Fuel prices are low and more people are traveling for business and pleasure as the U.S. economy improves.

Virgin America is much smaller than its airline rivals though. It lost $395 million from 2009 through 2012 before eking out a $10 million profit last year.

The airline is marketing its turnaround heavily to investors. In the first nine months of this year, it's made $56 million, according a regulatory filing.

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