Moonpig’s shares flew up 17% as it joined the stock market, valuing the company at £1.4bn at the end of its first day.
The online greetings card and gift retailer, which also operates as Greetz in the Netherlands, placed 140m shares at an initial price of 350p on Tuesday, to give new investors a 41% stake in the company.
The float raised £20m in new money to fund expansion while existing shareholders, including private equity firm Exponent, which has controlled the group since 2016, cashed out stakes worth more than £400m.
Nickyl Raithatha, the chief executive of Moonpig Group, said that as the market shifted online, “now is the perfect time for us to bring the company to the public market, and we are excited about Moonpig’s prospects for the future”.
Senior executives including Raithatha, finance director Andy MacKinnon and Kate Swann, a former chief executive of high street newsagent WH Smith who was appointed chair in 2019, sold shares worth more than £10m.
Moonpig Group’s flotation follows a record Christmas as it cashed in on the closure of high street card shops, as restrictions on travel prompted people to send gifts and greeting cards bought online. It booked £156m in sales in the six months to the end of October, up from £173m for the entire previous year.
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Founded two decades ago by Nick Jenkins, a former commodities trader and Dragon’s Den contestant, Moonpig’s name stems from his schoolboy nickname. Jenkins made £42m in 2011 from the sale of the business to the online photo printing company Photobox, which was later bought out by private equity.
Neil Wilson at Markets.com said “[Moonpig’s] market share is huge (60% of online cards in the UK in 2019) and the trend towards online that will last beyond the pandemic is supportive of future growth. Huge market share, strong growth prospects and good margins – what is not to like? Maybe the valuation, but as we have seen before that is hardly a barrier to online retail stocks.”
Moonpig’s debut comes amid a flurry of deal activity as investors look for winners from the switch to online that has been accelerated by the pandemic. Music Magpie, Deliveroo and Trustpilot are also thought to be looking at a stock market listing this year, while Dr Martens made a strong debut last week .