Farfetch’s debut at the NYSE

  • ECO News
  • 24 September 2018

Farfetch's debut was pure madness: after a euphoric introduction to the equities market, the company's shares went through the roof. José Neves saw the value of his company, and fortune, multiply.

It is not enough to say that Farfetch’s debut at the New York Stock Exchange was successful. It was pure madness. Everyone is talking about Farfetch, and its entry in the stock market was unbelievably successful. The company’s shares increased almost by 50% in comparison to the IPO value.

The upward trend of the shares value reminds us of Facebook, Snapchat, Square or FitBit, just to name a few of the companies that had this type of debut at the NYSE. It corresponded to investors expectations — indeed, exceeding them by far — as the company’s titles went from 15 to 20 dollars in their first day.

And even if the shares were that high already, investors kept buying, buying and buying some more. That shows how exciting and promising their business model is, regardless of how the current values haven’t yet turned out to be profitable. The future looks bright for Farfetch and its investors.

Here are some numbers:

Farfetch at $20 per share. Not 15, nor 17. It’s 20!

After submitting its request to the NYSE, Farfetch revealed that its shares value would range from 15 to 17 dollars. However, the growing appetite investors had for these shares made the value range reach a new level, going from 17 to 19 dollars.

At the NYSE debut, the value was yet again increased, staying then on 20 per share, way above the estimates, allowing the company to raise 885 million dollars on the company’s first day on Wall Street.

53%: High stakes in the stock market

Despite the madness of the debut, which was translated into a significant increase in the share prices, investors were not scared. The first rating after the admission to the stock market was excellent as well, with a 53% valuation of the shares, placing the company’s performance close to those tech giants such as Facebook or Twitter when they did their own IPO’s.

The company’s stocks increased to a maximum value of 30.6 dollars, which meant a 53% valuation, but the day closed at a 42.25% valuation: Farfetch’s stocks stood at 28.45 dollars by the end of the day.

2.5 billion dollars worth

The escalating prices at the stock exchange made the company’s value rapidly peak. The company was valued at 1.5 billion dollars, prior to the NYSE debut. Now, given the IPO performance, and the value of 20 dollars per share, Farfetch’s market capitalization stands at around 5.8 billion.

At the debut, the value went up even further. In one session alone in Wall Street, the company’s market value increased by 2.8 billion dollars.

8.3 billion dollars, the double of one of Portugal’s biggest banks

In the bundle of high tech companies that are valued way above Farfetch’s billions (such as Amazon, or Apple), the company is still flying low.

If compared to Portuguese companies, Farfetch is very close to the market cap of EDP renewables (7.3 billion euros), and it is worth almost twice as much as the Portuguese bank BCP (valued at 3.8 billion euros). These are market cap’s in euros and given the current exchange rate to the dollar (now at 1.1744), Farfetch is worth 7.1 billion euros.

José Neves is one of the richest ten Portuguese already: FTCH’s leader is worth 1.2 billion

This year, the Portuguese richest ranking from Forbes Portugal had already put José Neves at the top ten ranking, with an estimated fortune of 689 million euros. He was ninth in the ranking, according to the estimations of 15 to 17 dollars, but the increase has made his fortune rocket.

By now, his numbers’ improvement has put him his fortune at around 1.2 billion euros, meaning that he is now one of the Portuguese multimillionaires.