Sun Country Airlines collected $218 million after selling 9.1 million shares at $24 each.
Daniel Slim/AFP via Getty Images
Three companies— Olo, Jowell Global, and Sun Country Airlines Holdings —made their public equities market debuts on Wednesday.
The three are the first traditional initial public offerings of the week.
Sun Country (ticker: SNCY) delivered the strongest performance Wednesday, with shares rising nearly 52%. The stock opened at $33 and closed at $36.38.
The low-cost airline collected $218 million after selling about 9.1 million shares at $24 each, above its $21 to $23 price range. Barclays, Morgan Stanley, and Deutsche Bank Securities are the underwriters on the deal.
Sun Country, based in Minnesota, offers flights throughout the U.S. as well as to Mexico, Central America, and the Caribbean. Its charter business is a big component of its business strategy; clients include casino operators, the U.S. Department of Defense, college sports teams, and professional sports teams. The company is also the air carrier for the NCAA Division I National Basketball Tournament, its prospectus said.
Of the three companies trading Wednesday, only Sun Country is unprofitable. The airline experienced a significant drop in demand last year because of the Covid-19 pandemic.
Olo (OLO) also began trading Wednesday. The stocked opened at $32 and jumped 39%, or $9.75, to end at $34.75.
“This is a manifestation of a milestone moment [for Olo],” Noah Glass, its founder and CEO, told Barron’s from the floor of the New York Stock Exchange. “It’s amazing to now have the credibility that comes along with an IPO and the transparency into our balance sheet and resources that comes along with [it]. It feels like the very beginning of this journey…I couldn’t be more excited on behalf of all of team Olo.”
Late Tuesday, Olo raised $450 million after selling 18 million shares at $25 each, above its expected range. The New York-based software company had initially filed to offer 18 million shares at $16 each, which it raised to $20 to $22 earlier this week.
Goldman Sachs and J.P. Morgan are the underwriters on the deal.
Started in 2005, Olo’s software helps roughly 400 restaurants provide digital ordering and delivery. Clients include Chili’s, Shake Shack (SHAK), Denny’s (DENN), and Cheesecake Factory (CAKE).
Olo has raised about $100 million in capital and doesn’t have any debt, Glass said. The company, which saw its revenue nearly double last year to $98.4 million, has more than $70 million in cash on its balance sheet, he said.
Olo will use proceeds from the IPO to double down in supporting “the enterprise restaurants we service,” which includes about 100,000 individual businesses, he said. The segment processes about $40 billion in transactions, Glass said. “We are looking at the opportunity to grow and scale. It’s a 70-times opportunity from where we left off last year,” he said. “The initial capital we raised will help us address the pain points that restaurants feel.”
One thing Olo likely won’t be taking part in are mergers. “We don’t have any planned [acquisitions] up our sleeve to be the direct reason for doing this,” Glass said.
Olo’s software helps restaurants provide online ordering and delivery. Nearly $14.6 billion in sales were processed through Olo’s platform in 2020, but the company is still in the early stages of providing payments, Glass said, noting that only a handful of customers are using OloPay. “We’re in the super, super early stages but we’re excited about [OloPay] and investing in it,” he said.
The Covid-19 pandemic has speeded the acceptance of digital ordering, Glass said. The biggest challenge for the industry now is the ever-changing healthcare environment and how much of restaurant dining rooms can stay open, he said. “Covid was a devastating thing for the restaurant industry and its owners. We took on a greater role as a lifeline to our restaurant customers and a mission critical component of the business,” he said.
By going public now, Olo is making a statement that it plans to be independent for a long time, he said. Many businesses have been built on top of Olo, he said. “We want them to feel great about Olo’s long term future partner…It’s a great opportunity for our investors who have been with us for our 15-year journey,” said Glass.
Lastly, Jowell Global (JWEL) made its debut Wednesday. The stock opened at $8.60 and closed at $8.71, up 24.43%.
The Shanghai company raised $26 million after selling 3,714,286 million shares at $7 each. Network 1 Financial Securities is the underwriter on the deal.
Jowell provides an e-commerce platform that sells cosmetics, health, and nutritional supplements and household products in China. It also sells its products through authorized retail stores under the brand Love Home Store or LHH Store.
Write to Luisa Beltran at [email protected]
