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From its IPO price of $21 per share, Fiverr (FVRR) stock zoomed 90% higher to end its inaugural trading day at $39.90. Investors continue to clamor for the stock tonight; in post-market action, it’s up an additional 7.5%.
Freelance marketplace Fiverr (FVRR) had a very good first day on the New York Stock Exchange. This week the company priced its IPO at $21 per share and raised more than $111 million. It then started trading at $26, with shares climbing up for most of the day and closing at $39.90 — more than 90% from the IPO price.
Israel-based Fiverr which produces software that connects freelancers with companies that need projects completed sees big potential in bringing the search for freelancers online. Chief Executive Micha Kaufman said that the online market for freelance services has a low single-digit share of the overall freelance market. He commented:
“That level of transparency is game-changing for businesses. It’s really like e-commerce 20 years ago.”
FVRR shares priced higher than expected are suggesting healthy demand and you may say that this IPO followed that of Upwork, which went public in October last year.
Fiverr reported some $75 million in 2018 revenue, up 44% from a year earlier, but it also reported a $36 million operating loss as expenses, that, around 50 percent of them for sales and marketing, came to $100 million.
Fiverr is paid based on fees related to the value of the services people purchase through the platform. Services are bought and sold based on fixed fees, rather than hourly rates.
Until today, the startup has raised a total of $111 million from investors including Qumra Capital, an Israeli VC, Bessemer Venture Partners, Square Peg Capital, Access Venture Capital, and Cubit Investments.
According to recent studies, growth projections for freelancing are increasing by 3.5% year-over-year. As Upwork’s 2019 Future Workforce Report says, some 74% of millennial and Gen Z managers have workers who work primarily remotely. According to this report, some 50% of managers increased their use of freelancers since 2016.
Fiverr is just one of several coming IPOs. Cloud-based security software CrowdStrike Holdings (CRWD), which went public Wednesday, also soared on its first trading day.
Slack Technologies, a workplace productivity tools company, is scheduled to start trading via a direct public listing next week.
More than a billion shares were issued in the Uber IPO, and almost 200 million were issued in the Lyft IPO. That’s not a situation where you can have big upward prices moves because it is difficult for demand to match supply.
The Beyond Meat IPO has offered crazy returns because they were offering only a few million shares, a lot of them were shorted, and buying demand forced a short squeeze.