Investors eager to own a piece of trendy shoemaker Crocs Inc. on Wednesday drove the share price of Colorado’s newest public company up nearly 36 percent on its first day of trading.
Niwot-based Crocs offered 9.9 million shares at $21 each Tuesday evening, raising $95 million after underwriting fees and other expenses for the company and a similar amount for dozens of selling shareholders, including the company’s founders.
When trading began on the Nasdaq on Wednesday morning, the stock opened at $30, hit a high of $32.50 and ended the day at $28.55, a gain of $7.55 a share. Nearly 12 million shares traded hands.
“We believe we have developed a very unique set of products and look forward to continuing to grow our business and the Crocs brand,” chief executive Ron Snyder said. “Although being public brings important benefits to Crocs, the most important thing for us is to continue making great shoes that people can’t live without.”
Investors gave Crocs a market value of $1.09 billion, making it the country’s fifth-largest publicly traded shoemaker behind Nike, Reebok International, Timberland Co. and Wolverine Worldwide, according to Bloomberg Financial.
Brands known to consumers, such as Chipotle Mexican Grill and Crocs, have received the warmest reception from investors in a resurgent market for initial public offerings, said Steven Tuen, an analyst with IPO Value Monitor in New York.
“It has taken a few years for investors to get comfortable again with the IPO market, but it is a case-by-case stock picking as opposed to the rising tide lifts all boats,” Tuen said.
Denver-based Chipotle, which spun off from McDonald’s, was priced at $22 a share and closed at $44 a share on its first day of trading. Crocs shares have doubled from the $13 to $15 a share that the offering’s lead underwriters, Piper Jaffray and Thomas Weisel Partners, initially estimated the market would support.
“This was a wonderfully successful IPO, versus one that opened higher and then broke its issue price,” said David Menlow, president of IPOFinancial.com in New Jersey.
The company didn’t squeeze out all the return available to investors, and its shares also didn’t “float away like an inflated balloon,” Menlow said.
“We are very happy,” Snyder said of the offering.
Snyder and the Crocs management team made more than 80 presentations in 70 cities to promote the offering in recent weeks. That included a last- hour pitch in Milwaukee.
The Crocs team flew back from Minneapolis to Denver on Wednesday afternoon before taking the celebration to an area nightclub.
“I slept much better after 2 1/2 weeks on the road,” Snyder said.
Crocs rubber clogs, sold in a wide palette of colors, started as a Midwest phenomenon but have gained traction along the coasts, Snyder said. The company also has begun selling the shoes in more than 40 countries.
Crocs, which sold $1.2 million worth of shoes in 2003 and $13.5 million in 2004, sold about 6 million pairs and generated approximately $108 million last year. The company is rolling out several new colors and is expanding its product line to more than 17 styles.
After expenses, the IPO should net $95 million for Crocs, which said it plans to spend portions of the proceeds as follows:
Capital spending of $11.7 million to improve manufacturing capacity and other infrastructure.
A $3.5 million upgrade of the company’s financial reporting systems to comply with U.S. Securities and Exchange Commission requirements.
Repayment of a $5.9 million credit line and another $5.7 million in debt.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
