Consumers crack open IPO door

Savers Value Village

29/06/2023 22:53

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       NEW YORK, June 29 (Reuters Breakingviews) - The market
for U.S. initial public offerings is starting to crack open, but
some trends are playing better than others. Shares in thrift
store chain Savers Value Village  SVV.N  opened 38% above their
IPO price on Thursday even as two other new entrants, Fidelis
Insurance  FIHL.N  and energy company Kodiak Gas Services
 KGS.N , got a frosty reception. 
    After pricing above its indicated range and then rising
further, Savers Value was worth nearly $4 billion in its early
hours of trading. It follows Cava  CAVA.N , the Mediterranean
lunch chain that by Thursday was worth nearly double the IPO
price of $22 it established in mid-June. Meanwhile, Fidelis and
Kodiak had to cut their price range, and both debuted below
their opening price.
    The divergence looks like a simple economic bet that
consumers are doing better than expected, as inflation eases and
a dreaded U.S. recession stays at bay, at least for now.
Consumer goods are the only sector where new listings in the
second quarter had double-digit positive returns, according to
Renaissance Capital, while healthcare, technology and energy
were negative. It’s not the sale of the century but it’s a
start. (By Jennifer Saba)
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 (Editing by John Foley and Sharon Lam)
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