rose in their stock-market debut Thursday, notching a valuation of roughly $10.4 billion for the private-equity firm and marking a positive sign for the IPO market.
The stock rose 15% from its initial-public-offering price to close at $34 a share. On Wednesday, the company and an existing investor raised $1 billion by selling stock in the initial public offering.
The shares had priced at $29.50, the midpoint of TPG’s projected range of $28 to $31. That valued TPG at around $9 billion. The firm was hoping for a $10 billion valuation when The Wall Street Journal first reported in June that TPG was weighing going public.
TPG’s first-day trading performance is a good signal for the IPO market, even though some investors and bankers cautioned it isn’t a perfect measure. While TPG appealed to growth investors, they said, it isn’t a technology company, the sector of the IPO market that took a big hit at the end of 2021.
“This is an old-style IPO,” said TPG Executive Chairman
who co-founded the firm 30 years ago. “That style doesn’t depend on meme stocks. It’s about quality, long-term positioning.”
In December, about two out of every three traditional IPOs that happened in 2021 were trading below their IPO prices. As of Tuesday, the class of IPOs had fallen 17% on average from their offer prices, according to Dealogic.
Next up for the IPO market is a slate of high-profile companies that have filed paperwork with the Securities and Exchange Commission but have yet to formally pitch their shares to investors. That includes food company Chobani Inc. and social-media platform Reddit Inc.
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Appeared in the January 14, 2022, print edition as ‘TPG Rises By 15% In Market Debut.’