Chewy Soars in Trading Debut After $1.02 Billion IPO

Ann Santiago
June 17, 2019

Some 46.5 million Chewy shares were sold in the IPO, up from the 41.6 million originally planned, the source said, requesting anonymity because the details are private. The IPO valued the company at $8.8 billion, which is roughly double the $4.45 billion valuation that PetSmart reportedly set previous year in private communications with investors.

Shares of Chewy are expected to start trading on the New York Stock Exchange on Friday under the symbol "CHWY". It is now 70 percent owned by PetSmart, which acquired Chewy in 2017 for roughly $3 billion financed through debt and equity.

A year ago, Chewy announced offers of $3.5 billion, up 67% from 2017. The initial public offering of more than 5.6 million shares of Class A common stock was priced between $19 and $21 per share.

Shares of the pet supplies retailer finished its first day on the public market about $1 short of its $36 opening trade. The shares closed up 59% to $34.99, giving the company a market value of about $13.95 billion.

Chewy, based in Dania Beach, Florida, is valued in the IPO at about $8.8 billion based on the outstanding shares as listed in its U.S. Securities and Exchange Commission filings.

Given the scale of Chewy Inc.'s sales surge, which had rocketed to $3.5 billion from initial $26 million back in 2012, the pet products retailer would likely to tap more money onto a $70 billion U.S. pet product industry, analysts suggested. The company even noted in its filings that pet spending is resilient in an economic downturn due to the strength of the pet and pet "parent" relationship.

Chewy co-founder Ryan Cohen sees plenty of growth left for the company and long gone are the company's early days when it struggled to attract capital.

Like other companies, Chewy made its debut on the public markets. "They're like the Amazon of pets - fitting, the CEO comes from Amazon, he was a big executive there - with a broad selection of high-quality products at competitive prices".

Morgan Stanley, JP Morgan, and Allen & Company are together acting as joint lead underwriters for the offering.

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