“Pet humanization” trend is the trend to beat as shares of Chewy, the online seller focused on pet supplies, rocketed following Thursday’s IPO. Chewy CHWY, +65.00% announced late Thursday that it planned to sell at least 46.5 million shares at $22 apiece, which would bring in more than $1 billion at an initial valuation approaching $9 billion. Chewy had already increased its targeted IPO pricing range to $19 to $21, from an earlier range of $17 to $19, then priced higher than that range and added nearly 5 million more shares to the offering.
The offering consists of 5,600,000 shares of Class A common stock being sold by Chewy and 40,900,000 shares of Class A common stock being sold by a wholly-owned subsidiary of PetSmart, Inc. (the “Selling Stockholder”). Also, the Selling Stockholder granted the underwriters a 30-day option to purchase up to 6,975,000 additional shares of Class A common stock at the public offering price, less underwriting discounts, and commissions. Chewy will not receive any proceeds from any sale of shares by the Selling Stockholder. The offering is expected to close on June 18, 2019, subject to customary closing conditions.
Furthermore, shares took flight on Friday opening, to trade 72% above the $22 initial public offering price. The stock’s first trade was at $36 at 11:03 a.m. Eastern for 6.1 million shares, then kept rising.
Launched in 2011, Chewy offers personalized service of a neighborhood pet store alongside the convenience and speed of e-commerce. They house a wide selection of products of more than 45,000 items (including our Private brands and prescription Rx food and Rx medication products offered at competitive prices.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, and Allen & Company LLC are acting as joint lead book-running managers for the offering. BofA Merrill Lynch, Barclays Capital Inc., BC Partners Securities LLC, Jefferies LLC, RBC Capital Markets, LLC, UBS Securities LLC, and Wells Fargo Securities, LLC are also acting as joint book-running managers. Nomura Securities International, Inc., Raymond James & Associates, Inc. and William Blair & Company, L.L.C. are acting as co-managers.