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How Did Elevate Credit Perform in Initial Public Offering?
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Shares of ELEVATE CREDIT, INC. climbed 19.38% to close at $7.76, after the online lender priced 12.4 million shares in the initial public offering (IPO) for $6.50 per share on Apr 6. The nonprime credit lender said that the shares initiated trading on the New York Stock Exchange, under the ticker symbol “ELVT” on Thursday. The offering is anticipated to close on Apr 11, subject to certain conditions.
Notably, shares were priced at half of the targeted price range of $12–$14, as investors are skeptical on the prospects of new online lending models. Notably, a 30-day option to purchase up to an additional 1.86 million shares has been granted to the underwriters by Elevate, which would sum the total net proceeds to $81 million, including expected underwriting discounts and commissions, along with offering expenses. However, on non-exercising of underwriters’ options, proceeds will total $69 million.
The gross proceeds worth $15 million are expected to be used for repaying a portion of the outstanding amount under the company’s convertible term notes, about $53 million to partly repay the outstanding amount under its financing agreement and the remaining amount of the proceeds for general corporate purposes. Notably, Victory Park Capital, one of the company’s lenders, will be acquiring 2.3 million shares at the IPO price.
The online lender offers innovative online credit solutions to "nonprime" consumers with credit scores of less than 700 in the U.S. and UK. Notably, with the backing of Sequoia Capital, the company recorded gross revenue of $580.4 million in 2016, up 34% year over year. Till date, Elevate has originated $4 billion in nonprime credit to consumers above 1.6 million.
"We are serving a huge percentage of customers that have terrible credit options," CEO Ken Rees said. "We've been growing like crazy .... and I think that is because of this large, underserved market we have."
Notably, Elevate initially planned the IPO last year in January, which was delayed due to volatile market conditions that time. The stocks were plummeting on investors’ concerns. However, currently, major indexes are recording all-time highs which could prove to be a major differentiator for the company’s IPO. Further, anticipated easing out of regulations in the financial sector under President Donald Trump will also be favorable.
Still, Rees said that he thinks Elevate's business is actually "a great hedge against any future volatility in the market."
The joint book running managers for the offering include UBS Securities LLC, a unit of UBS Group AG (UBS - Free Report) , Stifel, Nicolaus & Company, Incorporated, a subsidiary of Stifel Financial Corp. (SF - Free Report) , Jefferies LLC, William Blair & Company L.L.C. and Credit Suisse Securities (USA) LLC, a division of Credit Suisse Group AG .
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How Did Elevate Credit Perform in Initial Public Offering?
Shares of ELEVATE CREDIT, INC. climbed 19.38% to close at $7.76, after the online lender priced 12.4 million shares in the initial public offering (IPO) for $6.50 per share on Apr 6. The nonprime credit lender said that the shares initiated trading on the New York Stock Exchange, under the ticker symbol “ELVT” on Thursday. The offering is anticipated to close on Apr 11, subject to certain conditions.
Notably, shares were priced at half of the targeted price range of $12–$14, as investors are skeptical on the prospects of new online lending models. Notably, a 30-day option to purchase up to an additional 1.86 million shares has been granted to the underwriters by Elevate, which would sum the total net proceeds to $81 million, including expected underwriting discounts and commissions, along with offering expenses. However, on non-exercising of underwriters’ options, proceeds will total $69 million.
The gross proceeds worth $15 million are expected to be used for repaying a portion of the outstanding amount under the company’s convertible term notes, about $53 million to partly repay the outstanding amount under its financing agreement and the remaining amount of the proceeds for general corporate purposes. Notably, Victory Park Capital, one of the company’s lenders, will be acquiring 2.3 million shares at the IPO price.
The online lender offers innovative online credit solutions to "nonprime" consumers with credit scores of less than 700 in the U.S. and UK. Notably, with the backing of Sequoia Capital, the company recorded gross revenue of $580.4 million in 2016, up 34% year over year. Till date, Elevate has originated $4 billion in nonprime credit to consumers above 1.6 million.
"We are serving a huge percentage of customers that have terrible credit options," CEO Ken Rees said. "We've been growing like crazy .... and I think that is because of this large, underserved market we have."
Notably, Elevate initially planned the IPO last year in January, which was delayed due to volatile market conditions that time. The stocks were plummeting on investors’ concerns. However, currently, major indexes are recording all-time highs which could prove to be a major differentiator for the company’s IPO. Further, anticipated easing out of regulations in the financial sector under President Donald Trump will also be favorable.
Still, Rees said that he thinks Elevate's business is actually "a great hedge against any future volatility in the market."
The joint book running managers for the offering include UBS Securities LLC, a unit of UBS Group AG (UBS - Free Report) , Stifel, Nicolaus & Company, Incorporated, a subsidiary of Stifel Financial Corp. (SF - Free Report) , Jefferies LLC, William Blair & Company L.L.C. and Credit Suisse Securities (USA) LLC, a division of Credit Suisse Group AG .
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>