Boohoo.com shares soar on stock market debut as online retailer cashes in on IPO fever
Friday 14 March 2014
Online fashion retailer Boohoo.com soared on its stock market debut opening at 85p, 70 per cent higher than its 50p float price, before easing back to 75.5p.
The flotation sees Boohoo founder Mahmud Kamani, who set up the Manchester-based firm in 2006, pocket £135 million; he is keeping a 25 per cent stake in the company, worth around £210 million after today’s jump. His co-founder Carol Kane pockets £25 million from the initial public offering.
Boohoo.com is the latest in a long line of retailers cashing in on investors’ appetite for spending their cash, with high street discount chain Poundland enjoying a similar surge on its debut earlier this week, and House of Fraser and DFS among the initial public offerings being lined up. Last month internet white goods giant AO.com jumped by a third on its first day of trading.
However, some in the City have urged caution over the current glut of businesses joining the market — especially online firms — suggesting we are in the midst of another bubble similar to the 1990s, when dozens of technology firms were over-priced.
Boohoo.com is now valued at nearly £600 million despite sales only hitting £91.9 million in the 10 months to December and underlying pretax profits totalling £10.1 million.
Today’s listing raised £300 million with £50 million planned to be reinvested in the business.
Abu Dhabi-based energy services firm Gulf Marine Services made its market debut today, dipping back slightly from its 135p float price — already at the bottom of expectations — to 134.5p, giving it a value of around £470 million.
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