Planet Fitness Inc.'s stock fell Thursday in a disappointing
trading debut.
Shares of the budget fitness chain, which is known for its $10
monthly memberships, opened at $14.50, 9.4% below their IPO price.
Late Wednesday the IPO was priced at $16 a share, at the high end
of expectations.
The deal raised $216 million by selling 13.5 million shares.
That total doesn't count a so-called overallotment option, which
gives underwriters the opportunity to sell additional shares in
certain circumstances.
Planet Fitness and certain selling stockholders had planned to
sell shares at $14 to $16 apiece, according to regulatory
filings.
Planet Fitness's stock decline comes the day after several poor
trading starts. Amplify Snack Brands Inc. and Sunrun Inc. tumbled
in their first session of trading on Wednesday. Amplify's 10% fall
marked a rare setback for a high-profile IPO that had been priced
above its range and likely signaled a warning to big-name consumer
brands preparing to go public. Momentum investors piled into the
Amplify deal, which was more than 20 times subscribed, looking for
a big first-day pop. When there was none they bailed, a person
familiar with the matter said, taking the price of the stock
down.
The fall in shares of Amplify and Planet Fitness follow a string
of strong first-day performances by consumer-brand companies. Last
month, Blue Buffalo Pet Products Inc. shares jumped 36% in their
first day of trading. Fitbit Inc., another buzzed-about consumer
company that made its debut earlier this year, popped 48% after
being priced above expectations.
Planet Fitness, which is majority owned by private-equity firm
TSG Consumer partners, began trading on the New York Stock Exchange
Thursday under the symbol "PLNT." The deal was led by J.P. Morgan,
Bank of America Merrill Lynch, Jefferies and Credit Suisse.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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