Moonpig shares surge as trading gets underway

The online card retailer priced its initial public offering at 350p a share. By 0930 GMT the stock was trading at around 426p, though it had earlier touched highs of more than 440p.

The offer comprises around 5.7m new shares, raising around £20m, and around 134.6m existing shares, equating to a total offer size of £491.2m. It represents 41% of Moonpig’s issued share capital on admission.

Unconditional dealing is expected to start on Friday.

Chef executive Nickyl Raithatha said: "Listing on the London Stock Exchange is an incredibly special milestone and will provide new opportunities for the business.

"As the leaders of a market undergoing an accelerating shift to online, now is the perfect time for us to bring the company to the public market, and we are excited about Moonpig’s prospects for the future."

Neil Wilson, chief market analyst for Markets.com, said: "Moonpig has been a big beneficiary of lockdowns, as card shops have been closed and consumers have found options online to send greeting cards; sales doubled in the six months to the end of October. Its market share is huge - 60% of online cards in the UK in 2019 - and the trend towards online that will last beyond the pandemic is supportive of future growth.

"The strong debut, coming amid a flurry of deal activity that last week saw Dr Martens shares surge on debut in conditional dealing, is a sign investors are still willing to pay a premium for growth and a premium for names they are familiar with."

Michael Hewson, chief market analyst at CMC Markets, said: "This is an impressive start for a company that is likely to face challenges that have seen the likes of Paperchase and Card Factory struggle, although both of these businesses have much higher costs due to their store footprint.

"Moonpig has certainly seen a big increase in demand as a result of the pandemic. Its last set of accounts showed that revenues for the end of last year, to 30 April, increased to £173.1m, a rise of 44%. It stands to reason that revenues for this year should come in much higher - however, whether that’s enough to justify [its] valuation remains to be seen."

Moonpig is expected to qualify for inclusion in the FTSE 250.