Online used car dealer Vroom (VRM) popped 118% on Tuesday, the best first-day return for a tech IPO since China's Qutoutiao (QTT; +128% pop) in September 2018. Among US-based tech IPOs, Vroom notched the best pop since Nutanix (NTNX; +131%) in September 2016.
Backed by L Catterton, T. Rowe Price, and Cascade Investment, Vroom raised $468 million at a market cap of $2.8 billion by offering shares at $22, well above the original range of $15 to $17.
The company recorded trailing revenue of $1.3 billion, with an operating loss of $148 million. Vroom shows IPO investors are once again willing to bid up money-losing companies with the right growth story and a discount to public peers. In this case, Vroom came public valued well below Carvana (CVNA) on forward sales.
Of the tech sector's 10 highest first-day pops since 2018, four traded up substantially after day one (ZS, FVRR, AVLR, ZM) while three went on to produce significant losses in the aftermarket (QTT, RVLV, JMIA)
