Shares of Unity Software Inc soared in their debut on the New York Stock Exchange on Friday, giving the gaming platform a market value of around $18 billion and signaling sustained demand for new stocks.
The Silicon Valley startup's stock, which debuted on the New York Stock Exchange at $75 per share, closed at $68.35, well above the $52 per share in its initial public offering on Thursday.
"Going public is good for discipline. We can also compensate our employees with more transparency," said Unity Chief Executive John Riccitiello. "We picked the date earlier this year, and we never expected it's going to be a hot IPO market."
Unlike most companies that require employees to hold onto the stock for a lockup period following the public debut, Unity allows employees to sell 15% of their vested shares on the day of IPO.
It is the second $1 billion-plus U.S. software IPO this week to price above the targeted range after data warehouse company Snowflake Inc raised more than $3 billion in the largest U.S. listing so far this year.
Unity's software platform is widely used by game developers, artists, architects and filmmakers to create, run and monetize interactive 3D content.
"The company's (IPO) timing is good. Not only have U.S. market indexes returned to records, but one of Unity's top competitors, Epic Games, is also challenging Apple in court," said Michael Underhill, chief investment officer for Capital Innovations, which invests in IPOs.
Last year, more than half of the top 1,000 games in Apple's App Store and Google's Play Store were built using Unity's software platform, Underhill added.
For Unity's IPO, the lead underwriting banks, Goldman Sachs Group Inc and Credit Suisse Group, created an online system at Unity's request to take indications of interest from investors, with the aim of getting a more accurate gauge of demand. Orders for an IPO are typically made over the phone.
"We're so data-centric in everything we do. The idea of working with an IPO system perfected in the 1920s just didn't appeal to us," said Riccitiello.
(Reporting by C Nivedita and Abhishek Manikandan in Bengaluru, Krystal Hu in New York; Additional reporting by Niket Nishant; Editing by Shounak Dasgupta and Tom Brown)
