An American insurance policy comparison website SelectQuote Insurance Services, Inc. (SelectQuote) on Wednesday, May 20, 2020, announced that it has raised $360 million after selling shares in its initial public offering (IPO). The sale of shares was above the expected price due to the rising demand of the investors for the digital insurance industry.
SelectQuote’s listing in the IPO Market
SelectQuote, which provides consumer services to compare insurance policies for life, auto, and home insurance from companies including American International Group (AIG), Prudential Financial Inc. (PF), and Liberty Mutual (LM), has offered in the IPO market despite the widespread coronavirus pandemic impacted global market. The CBOE Volatility Index or also known as Wall Street’s fear gauge has been above the 20-point threshold since late February when the virus outbreak gradually spread.
The virus outbreak has shut most companies which led to a worse stock market volatility in the IPO market in March and April but only a handful of biotechnology and blank-check companies went ahead with IPOs during this period. SelectQuote’s offering reflected the latest sign of pandemic trended downwards in recent weeks and boosted investors’ confidence to test the market.
Chinese cloud computing company, Kingsoft Cloud Holdings Ltd. has made the biggest IPO by a company neither a biotechnology firm nor an investment acquisition firm, since the onset of the pandemic. The Chinese company raised $510 million in its US stock market debut earlier this month.
SelectQuote’s IPO listed above Expected Prices
Kansas-based SelectQuote reported that it has sold 18 million shares with the existing shareholders of 10.5 million shares raised up from 7 million, at $20 each as the share price of the IPO. The company, which was led by Credit Suisse and Morgan Stanley as advisors for the IPO, had expected a price share between $17 and $19 per share.
With this fundraising through the IPO, the company is valued at $3.25 billion. Meanwhile, it was reported that shares of EverQuote Inc. (EverQuote), a peer competitor of SelectQuote, hit a record high earlier this month after it increased its full-year revenue and adjusted EBITDA forecast. EverQuote also said that the virus outbreak has accelerated the digitization of the insurance industry.
Sources reported that SelectQuote posted $390.1 million in revenue for the nine months to the end of March, up almost 50% year on year while its net income edged up 2.4% to $61.1 million. The company’s stock will start trading on the New York Stock Exchange (NYSE) on Thursday under the symbol “SLQT”.
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