Wall Street is keen on the intersection of influencers and e-commerce.
Shares of Revolve Group shot up 48 percent to $26.64 right after its initial public offering Friday morning on the New York Stock Exchange.
Revolve priced its Class A shares at $18 — the high end of its expected range — and the stock immediately rose much higher, leaving the firm with a midday valuation of $1.82 billion.
The company is still controlled by co-chief executive officers Mike Karanikolas and Michael Mente, who founded the data-savvy e-commerce site in 2003, and hold 66.9 percent of its voting rights by virtue of their Class B shares.
The offering was helped along by a rising tide that saw the Dow Jones Industrial Average increase 1.3 percent, or 345.79 points, to 25,066.45. Investors were keying in on jobs growth of just 75,000 last month, which was well below the 182,500 economists projected and strengthened the case for lower interest rates, the prospect of which always bolsters stocks.
As a private company, Revolve was well insulated from the immediate reaction to such macroeconomic developments, having to adjust to broad trends when they hit their consumer segment or supply chain. Now the company’s moment-to-moment worth will be dictated by the stock market, which has grown increasingly volatile and is subject to major swings based off a tweet or two.
Even so, this appears to be a relatively good time to come to the market — stocks are still high and enjoying the long recovery following the Great Recession. Revolve also has plenty of fashion company that is new to the market. Farfetch went public in September, followed by Levi Strauss & Co. in March and the VF Corp. jeans spinoff Kontoor Brands Inc. last month. (In the wings still are Old Navy, which is set to be spun off from Gap Inc., and potentially Madwell, which could be separated from J. Crew Group.)
Revolve sold 2.9 million shares in the offering, raising $52.9 million, while early backers sold another 8.8 million shares, for $158.8 million. Revolve plans to use most of the proceeds to buy additional shares from its investors.
In addition to raising money for shareholders, the offering was intended to give the company more financial flexibility and a public market for its stock.