China's iPower Inc. (Nasdaq: IPW) surged 15% in its public trading debut Wednesday, in a significantly downsized IPO.
The hydroponic equipment retailer priced at $5 – well below the initially anticipated range of $9 to $11 per share and the lowered range of $7 to $9 announced more recently. IPower sold 3.36 million shares, with an additional 504,000 optional for post-IPO sale.
Overall, iPower raised $16.8 million – well below the high target of $55 million it set previously. Its IPO was also pushed from the expected date of May 7 to May 12.
The IPO capital will expand iPower's e-commerce platform, purchase inventory, R&D, enhance its IP portfolio, and be used for acquisitions and general corporate purposes, the company said in a statement today.
D.A. Davidson & Co., Roth Capital Partners, LLC, and US Tiger Securities, Inc. secured the offering.
Shares in the company peaked at $7.67 midday, then leveled off to close at $5.74 per share. In after-hours, the stock dipped 2%.
One of the largest providers of hydroponics in North America, iPower sources some of its supplies from China, offering products from its own and other brands. It sells via its own website and to partners including Amazon (Nasdaq: AMZN), eBay (Nasdaq: EBAY), and Walmart (NYSE: WMT).
In the second half of 2020, iPower's revenues reached $26.2 million, up 69% from the same time in 2019. Net income surged 117% year-over-year, according to the filing. For the year ended June 2020, iPower posted $39.9 million in revenue on nearly $2 million income.
Citing Hydroponics – Global Market Trajectory and Analytics by Global Industry Analytics, Inc., iPower said the global hydroponics market was estimated at $25.2 billion in 2020 and is forecast to reach $36.3 billion by 2027, spurred by the increased legalization of marijuana. In the United States, 44 states plus the District of Columbia have legalized cannabis in a certain form.