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Warby Parker Ends Debut With $6.1 Billion Market Value

Warby Parker. Shutterstock.
Warby Parker. Shutterstock.

Warby Parker Inc. opened trading at $54.05 a share and held steady, fluctuating barely a dollar from that price to give the eyewear retailer a market value of about $6.1 billion in the second direct listing of the week.

The shares, which never rose above $54.72 or dipped below $52.96, closed at 44 cents above the opening price Wednesday in New York.

That was more than double the $24.53 at which shares changed hands in private trades in April, as detailed in Warby Parker’s filings with the U.S. Securities and Exchange Commission. Accounting for stock options and similar holdings, the company’s fully diluted value is more than $6.6 billion.

Before trading began, the New York Stock Exchange assigned the shares a reference price of $40. Unlike the sale price in an initial public offering, the reference price serves merely as a guide for investors and allows trading to begin.

Warby Parker’s debut comes on the heels of data analytics firm Amplitude Inc. rising 9.6% in its direct listing Tuesday.

Coinbase, Roblox

The two were the fifth and sixth major direct listings on US exchanges this year, following the likes of cryptocurrency exchange Coinbase Global Inc. and online game maker Roblox Corp. As with previous direct listings, Warby Parker didn’t issue new shares as it would in a traditional IPO and its investors don’t have to wait for a lockup period to sell shares.

Advocates for direct listings contend the option is a better deal for startups and their investors than IPOs, which require underwriting fees and come with expectations of a first-day share pop.

Warby Parker counts Tiger Global Management, T. Rowe Price, General Catalyst, D1 Capital Partners and Durable Capital among its largest investors, according to its filings.

The eyewear maker got its start as digital platform and has been expanding its offline footprint. It had a net loss of $7.3 million on revenue of $271 million in the first six months of the year, compared with a net loss of $10 million on revenue of $177 million during the same period in 2020.

While e-commerce accounted for only 8 percent of eyewear sales in the U.S. last year, the increasing use of smartphones, tablets and computers is contributing to customer growth within the market, Warby Parker said in its filings. Some 76 percent of adults in the U.S. now use some form of vision correction, according to statistics cited by the company.

The company grew during the coronavirus pandemic, partly through virtual eye exams for prescription renewals.

Silver Lining

“We’re super excited about telemedicine,” said Dave Gilboa, who is co-chief executive officer with Neil Blumenthal. If there’s any silver lining to the pandemic, it was prioritising telemedicine, Gilboa said in an interview.

Warby Parker is a public benefit corporation, giving it a mandate to focus on more than maximising shareholder returns. Working with nonprofit organisations, it channels donations of glasses to people in more than 50 countries.

While banks don’t underwrite shares in a direct listing as they do in an IPO, Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. have been advising Warby Parker on its listing. The shares are trading on the NYSE under the symbol WRBY.

By Crystal Tse and Katie Roof

Learn more:

Warby Parker, Allbirds and Why DTC Brands Still Can’t Scale Profitably

The two companies’ recent IPO filings revealed growing sales and growing losses. These digital innovators now see stores and other old-school retail strategies as the key to success.

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