Online greeting card giant, Moonpig, has soared past its £1.2 billion valuation as shares jumped by almost a third during its stock market debut. This makes it the second largest stock listing in the UK this year, behind Dr Martens, which went public last week with a valuation of £3.7billion.
Moonpig set a top end price of £3.50 a share for its initial public offering, only to see trading on the stock open at £4.40 as conditional dealing started. Unconditional trading begins on Friday February 5.
Moonpig CEO Nickyl Raithatha said in a statement: “As the leaders of a market undergoing an accelerating shift to 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.”
The company revealed plans to float on the stock exchange at the start of January, amid surging online demand for its personalised greetings products. Another upswing is expected later this month in the run-up to Valentine’s Day, followed by Mother’s Day on Sunday March 14.
Moonpig, which has 12 million customers and sends 45 million cards a year, is now eyeing a place on London’s FTSE 250 Index of leading shares. In the 12 months to April 2020 the company made underlying profits of £44 million on sales of £173 million.
Writing for The Telegraph’s City Intelligence, Chief City Commentator, Ben Marlow, pointed out that the flotation was uncharted territory, as was its stock’s ‘stratospheric’ rise on the first day of trading which now sees Moonpig valued at £1.5billion. Specialist greetings chain, Card Factory, has a market cap of £118 million.
The £1.5billion figure is almost nine times annual sales, although Moonpig’s management are speaking about an even higher potential value of £2billion, or as much as £53 billion if gifting is included. The question now can only be, is such a stellar performance sustainable?