SmileDirectClub (SDC) joined an exclusive club on Thursday. It became one of only a handful of IPOs to price above the range and break issue on its debut. The company raised $1.3 billion by pricing at $23, but opened with a loss of -11%, and sank further in early trading.
The last time that happened was three years ago, when Chinese delivery company ZTO Express (ZTO) began trading in October 2016. In the past 10 years, only 2% of IPOs that priced above the range fell on day one.
SmileDirectClub also has the distinction of having the worst first-day return for a billion-dollar IPO in 25+ years.
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| SmileDirectClub is the 9th IPO in 10 Years to Price Above the Range and Drop on Day One | |||
|---|---|---|---|
| Company, Ticker | Offer Date | Deal Size ($mm) | First-Day Return |
| SmileDirectClub (SDC) | 09/11/19 | $1,346 | -28% |
| ZTO Express (ZTO) | 10/26/16 | $1,406 | -15% |
| Amplify Snack Brands (BETR) | 08/04/15 | $270 | -10% |
| Flex Pharma (FLKS) | 01/28/15 | $86 | -7% |
| Sysorex Global (SYRX) | 04/09/14 | $20 | -2% |
| uniQure (QURE) | 02/04/14 | $92 | -14% |
| Chegg (CHGG) | 11/12/13 | $188 | -23% |
| WhiteWave Foods (WWAV) | 10/25/12 | $391 | -1% |
| Metals USA (MUSA) | 04/08/10 | $240 | -9% |
Normally, investors are smart to buy IPOs that price above the range, if they can get in that the offer price. That group has averaged a first-day pop of 43% over the past 10 years, with 98% finishing at or above issue.
