PetSmart subsidiary sets share price higher than expected

Chewy shares skyrocket in stock market debut

Chewy shares skyrocket in stock market debut

The company's shares opened at $36.00 and rose as high as $41.34, compared with the IPO price of $22.00. They closed the day up 56 percent to $34.99. The offering included 5.6 million shares sold by Dania Beach, Florida-based Chewy and 40.9 million sold by a wholly owned subsidiary of PetSmart, according to a statement.

Many market watchers have been fervently waiting for the listing, which was first thought to be between $17 and $19 per share, but was raised to the $19-$21 range and now has topped that mark.

PetSmart resolved the dispute by amending its loan agreement, promising to give lenders a portion of the proceeds from any eventual sale of the online business, according to people with knowledge of the situation.

Jay Ritter, an IPO expert and professor at the University of Florida, however, is skeptical whether Chewy's valuation allows enough further upside potential for investors. "I expect the stock to continue to be volatile".

Cohen doesn't have a hand in Chewy's day-to-day operations anymore and said he'll likely get involved in another startup.

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Chewy is expected to start trading on Friday morning on the New York Stock Exchange under the ticker "CHWY." The Chewy site, which started in 2011, logged sales of $3.53 billion for the year ended February 3, up from $2.1 billion from the previous fiscal year, according to the company's prospectus.

The company, which is yet to make a profit, in its IPO pitch also highlighted the industry's resilience during downturns.

Chewy now has 640 employees at its Dania Beach headquarters, and an additional 1,100 at its Hollywood-based customer service center.

Chewy holds a 45% share of the online dog and cat food market, matching Amazon's share, according to research firm 1010data. And despite being in the red, Chewy grew 68 percent past year.

"If (Chewy) can clear legal and registration hurdles, they'll have no trouble competing out there", said Phillip Cooper, an independent consultant who advises pet industry investors. Chewy started trading with a head-turning market cap of more than $15 billion. PetSmart was to have 70% of the total shares and 77% of the voting power, the filings show.

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