What Does GoPro's Big Open Mean For The Market?
GoPro (NASDAQ: GPRO) made its public debut Thursday.
Shares of the wearable camera company priced at $24 (the top of the range) and opened at $28.65, the lowest print of the day. After a bull rally took shares to $33, 37.5 percent above its pricing and 15.2 percent above the open, traders took part in a bit of profit taking.
The interest that IPOs have been generating are leading to increased speculation that there is weakness in the broader macroeconomic market. As investors chase after IPOs (as indicated by strong opens), it appears they may be looking to stretch out the last bit of alpha available in equity markets.
The quantity of initial offerings also indicates that equity markets may be overextended (15 IPOs are expected this week alone). A company obviously wants the highest valuation possible for itself when it goes public, as insiders hold stock and and shares are typically authorized, beyond what is offered in the IPO. With a massive rush to go public in 2014, investment bankers and CFOs may think a pullback in the near future is likely.
Shares of GoPro have been trading at a very tight spread on strong volume, although have pulled back significantly from morning trading. Sub-penny trades indicate that much of the trading is being driven by computer algorithms.
The company was last trading hands at $31.19 per share, 29.95 percent above the open.
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