WEB FIRM GoDaddy defied analyst predictions on Tuesday night after raising $460m (£310m) in its initial public offering (IPO), with the company pricing its shares at $20 instead of the $17–$19 expected.
However its decision to price above expectations proved too cautious, as shares in the company rocketed 34 per cent on its debut, valuing the company at $5.48bn, including debt. Shares opened at $26.15.
This marked a remarkable vote of confidence in the loss-making firm, which saw all shares in the offering being successfully sold.
The company, which boasts 59m domain names under management and employs 4,000 people, saw its revenues rise 23 per cent last year to $1.4bn.
But this was not enough to offset a net loss $143m as the company struggles to turn the low-margin business of domain registration into profits.
The tech firm may use some of the funds raised from the float to chip away at its $1.4bn debt pile, which last year cost the company $85m to service.
With a very recognisable brand name and a customer base of around 12m, the Nascar-sponsoring firm has less room for rapid growth in its domestic US market than smaller rivals such as DigitalOcean.
However, the firm has been seeking to expand abroad with recent estimates suggesting 28 per cent of its customers were internationally based, with the UK, India and Canada being growth markets.
In addition, operating costs at the company have continued to fall.
GoDaddy was founded in 1997 under the name Jomax Technologies, before changing to GoDaddy two years later.
The company was later acquired by a private equity consortium led by KKR and Silver Lake in 2011.
The successful IPO is the firm’s second attempt at being listed, after coming close to a float in 2006 before it withdrew its application citing market conditions for its decision.