GreenSky Opens Below IPO Price

GreenSky (NASDAQ:GSKY), a fintech company that provides loans at the point of sale began trading on Thursday (May 24) through an IPO which the company is estimated it to have raised US$874 million.

The stock opened on Thursday at US$22.15, below its initial IPO price of US$23, but it recovered and reached US$23.35. The stock closed the trading day slightly higher at $23.36, up 1.57 percent over its first trading day.

The company had set a range of US$21 – $23 for 34.1 million Class A shares and sold 38 million shares.

Further, GreenSky said that it intends to use the net proceeds that it receives from this offering to purchase the same number of shares of Class A common stock or other equity interests that are exchangeable or convertible into shares of Class A common stock.

According to its website, over 1.6 million people have used their services to get loans while 12,000 companies offer financing through the platform.

Prior to the IPO, the company raised US$560M in funding and was on the Fintech 50 2018 list by Forbes and was valued at US$4.5 billion which made it one of the largest players in the sector.

The company that acts as the middleman between the contractors and banks provides loans for home improvement, healthcare and retail.

According to Moodys, the projected annual revenues is estimated to be over $400 million for this year as the company earns a transaction fee from merchants each time they use GreenSky’s platform to facilitate a consumer credit transaction while also receiving loan servicing from its bank partners. Further, it was said that its expectation of  GreenSky is that the company would generate cash flow from operations at over $130 million while growing its revenues at more than 20 percent over the next year.

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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.