When it was first announced, the IPO for Funko was hailed as a big deal. But it didn’t turn out to be the case, with stock dropping 40% the first day of trading. OUCH.
The collectible toy giant certainly has the profits and the interest to do well – and the IPO – initial public offering, in Wall Street parlance – had a lot of blue chipper back up, like JP Morgan, and Goldman Sachs. And pr positioned the company as “Funko’s Core Competencies Are What Retail Dreams Are Made Of.” Sounds like a no miss!
But as ICv2 reports, last Thursday’s offering was a dud:
The initial offering range was supposed to be $14-$16, according to Seeking Alpha, but the IPO price was dropped to $12. In trading on the first day, shares dropped to $7.07, with a further drop to $7.00 on Friday.
The first-day drop was the biggest since 2005, and the worst for an IPO raising $100 million or more since 1995, according to the Wall Street Journal.
As it stands, Funko is now valued at $325 million – far less than the $555 million valuation that the IPO would have netted.
This doesn’t mean bad times for Funko – although a widely expected market correction in the collectible toy area might be coming soon. Also, it’s part of a trend of IPOs just not doing well – even the mighty Snapchat and Blue Apron have underperformed recently.
Heidi MacDonald is the founder and editor in chief of The Beat. In the past, she worked for Disney, DC Comics, Fox and Publishers Weekly. She can be heard regularly on the More To Come Podcast. She likes coffee, cats and noble struggle.