(Bloomberg) — Sacks Parente Golf ended its first week of trading lower, just days after it made its best initial public offering (IPO) debut on a U.S. stock exchange this year.
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Shares fell 20% on Friday, the third straight day of declines, pushing weekly losses to 37%. The pullback also erased all of the gains from Tuesday’s jump of 624%. The golf company closed Friday at $2.51, well below its initial public offering price of $4.
The swing action is reminiscent of the “pop and drop” trend found in small IPOs last year, when small-cap listings saw huge gains in their trading debuts that quickly collapsed, according to Matt Kennedy, chief strategist at Renaissance Capital.
“In a typical IPO, it would be strange to price a company at the lower end of its range and then pop 600%,” Kennedy said over the phone, referring to Sacks Parente’s first day of trading.
But the $400 putter maker’s first week shows that “there is still a sub-section of the IPO market where the casino is open,” he said.
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Kennedy added that although rapid deployments have been less frequent for IPOs this year, there is another recent public company that has experienced similarly volatile price swings.
VinFast Auto Ltd.’s market capitalization increased. , which debuted this week through the merger of a special purpose vehicle acquisition company, gained 255% on its first trading day Tuesday, pushing the electric car maker’s market capitalization higher than shares of General Motors Co. and Ford Motor Co. It has since fallen, erasing more than 58% since Tuesday’s close.
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Sacks Parente Golf, the maker of a $400 golf putter, experienced a turbulent first week of trading after its initial public offering (IPO). The company, which initially debuted with great success, saw its shares fall by 20% on Friday, marking the third consecutive day of declines. This downward trend resulted in a weekly loss of 37%, with the stock closing at $2.51, well below its IPO price of $4.
This rollercoaster ride in the stock market is reminiscent of the “pop and drop” phenomenon seen in small IPOs last year, where companies experienced significant gains upon their trading debut only to quickly see those gains diminish. Matt Kennedy, chief strategist at Renaissance Capital, noted that while it is unusual for a company to price at the lower end of its range and then experience a 600% jump, there are still segments of the IPO market where extreme volatility persists.
Kennedy also pointed out another recent example of a company with volatile price swings in the public market. VinFast Auto Ltd., an electric car maker that recently went public through a special purpose acquisition company merger, saw its market capitalization surge by 255% on its first day of trading. However, the stock has since fallen, erasing more than 58% of its gains.
Despite the ups and downs of the stock market, the IPO arena continues to attract attention and generate excitement. While rapid fluctuations may be less common this year, there are still instances where companies experience dramatic price movements in a short period of time.
As Sacks Parente Golf wraps up its first week of trading at a price significantly below its IPO level, investors and market watchers will be keeping a close eye on how the company navigates the challenges and opportunities that lie ahead in the public market.
