Warby Parker Given $40 Reference Price for NYSE Direct Listing

29 Sep 2021, 12:32 PM IST

(Bloomberg) -- Eyewear retailer Warby Parker Inc. was assigned a reference price of $40 a share by the New York Stock Exchange as it prepares for its Wednesday trading debut in the week’s second direct listing.

As with previous direct listings, Warby Parker isn’t issuing new shares at a set price as it would in a traditional initial public offering. Instead, its current investors can simply begin selling the stock based on demand when trading opens.

Unlike the share price in an IPO, it isn’t a direct indicator of the company’s market capitalization because it’s a guide rather than a sale price. Setting a reference price is a requirement for trading to begin.

Still, at $40 a share, Warby Parker would have a market value of about $4.5 billion based on the outstanding shares listed in a statement. Shares of the company traded privately in April at $24.53 apiece, according to its filings with the U.S. Securities and Exchange Commission.

Warby Parker’s listing comes on the heels of one by Amplitude Inc. After being assigned a reference price of $35 by Nasdaq, shares of the data analytics startup opened at $50 on Tuesday and rose 9.6% from that on their first day.

Direct Listings

ZipRecruiter Inc., website-hosting service Squarespace Inc., cryptocurrency exchange Coinbase Global Inc. and online game maker Roblox Corp. went public earlier this year via direct listings, which have been increasingly favored by investors who see IPOs as leaving money on the table. Palantir Technologies Inc. and Asana Inc. debuted through direct listings last year, following a trail blazed by Spotify Technology SA and Slack Technologies Inc. before them.

Warby Parker had a net loss of $7.3 million on revenue of $271 million in the first six months of the year, according to its filings. That compared with a net loss of $10 million on revenue of $177 million during the same period in 2020.

The eyewear maker got its start as digital platform and has been expanding its offline footprint.

Eyewear Sales

While e-commerce accounted for only 8% 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% of adults in the U.S. now use some form of vision correction, according to statistics cited by the company.

The 11-year-old company counts Tiger Global Management, T. Rowe Price, General Catalyst, D1 Capital Partners and Durable Capital among its largest investors, according to its filings

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. are advising Warby Parker on the listing. The company plans for its shares to trade under the symbol WRBY.