Summary
Arlo completed its IPO at $16 per share, substantially below its indicated pricing range of $18-$20.
The offering follows on the heels of Sonos, which a day earlier had also priced its IPO below its initial expectations.
Still, Arlo shares caught a bid on the first day of trading, with shares being bid up to close the day up 42% from its initial IPO price.
Arlo's high-growth nature, and the possible growth of non-hardware revenues in the form of Arlo Services, makes it an attractive IPO to invest in.
Following directly on the heels of Sonos' IPO, surveillance camera company Arlo (ARLO) also completed its IPO and began trading on the New York Stock Exchange. And like its predecessor, Arlo was also unable to live up to its original pricing expectations, ultimately pricing its IPO at $16 per share, $3 below the original midpoint pricing of $18-$20. Note that just a day earlier, Sonos had done exactly the same thing, pricing its IPO at $15 per share versus an original expectation of $17-$19.
Yet despite the weak perceived institutional demand for these companies (sentiment on the hardware sector has been grim for years, especially after the spectacular fallout of companies like Fitbit (FIT) and GoPro (GPRO)), shares fared much better in the open trading session. On its first day of trading, shares of Arlo caught a massive bid and opened at $18.50 (16% higher than its IPO price), and ultimately glided higher to close the day at $22.75, marking a 42% "pop" on its first day of trading. That's the number that generally works its way into the financial headlines, so perhaps Arlo artificially priced its IPO low to draw attention, as many companies are apt to do. However, the wide spread between the below-market pricing (a rarity in a year where companies have usually nudged pricing higher in IPOs) implies that Arlo left considerable money on the table.
