Liquidity Venture

Fastly And Luckin See Their IPOs Soar As Market Continues To Reward Growth

Morning Markets: Yesterday Luckin Coffee and Fastly priced their IPOs at the top of their respective price ranges. This morning both companies are soaring.

After Uber and Lyft struggled following their world-famous IPOs, the state of the public offering market was in question.

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Then, two growth-oriented companies with strong private capital backing and stiff losses priced their IPOs at the very top of their respective ranges. I wrote that just that alone was a bullish signal; investors were not scared off from Uber and Lyft’s failure to rise.

But the story became all the more salutary this morning when both companies opened sharply up from their IPO prices. Here are the results:

Luckin Coffee:

  • IPO price: $17
  • Opening trade: $25
  • Current price: $24.12

Fastly:

  • IPO price: $16
  • Opening trade: $21.50
  • Current price: $24.23

Luckin Coffee is currently up around 42 percent, while Fastly is up a sharper 51 percent. Those are incredibly strong results and could spark the usual round of talk that the companies mispriced their IPOs. Maybe, but at a minimum, they did manage to land the top of their range, and then perform.

It’s hard to be too sad at that result.

So What

The public market still wants to buy growth. That’s clear. And it’s even willing to pay for it in different guises.

Luckin and Fastly share little aside from deficits in the name of growth, and an IPO date. The former is a quickly growing coffee chain with a strong mobile and delivery component; Fastly helps get Internet content to users more quickly for big brands. There’s not too much more that overlaps.

But each found a warm welcome today. That means for companies that have some sort of path to profitability, and at least medium-temperature growth, the IPO window is open.

Which is why, I reckon, Fiverr is trying to get out while being slightly undersized.

Illustration: Li-Anne Dias.

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