In This Article:
(Bloomberg) -- Smithfield Foods Inc. shares fell 1.3% in the pork producer’s return to being a public company, after the stock priced below the range offered in its IPO.
Most Read from Bloomberg
-
NYC Subway’s Most Dangerous Stations Are on Lexington Ave. Line
-
Texas HOA Charged With Discrimination for Banning Section 8 Renters
-
Newsom Enlists Magic Johnson, Guggenheim CEO for LA Rebuilding
Shares of the world’s largest pork producer closed at $19.75 each on Tuesday, below the initial public offering price of $20 each. Smithfield and an indirectly owned subsidiary of its backer, Hong Kong-listed WH Group Ltd., sold about 26 million shares to raise $522 million.
The trading gives Smithfield a market value of about $7.8 billion, based on the outstanding shares, well above the roughly $5.38 billion WH Group projected last year.
Smithfield and WH Group had offered 17.4 million shares each for $23 to $27 apiece, a previous filing showed. WH Group, which acquired Smithfield more than a decade ago, will maintain control of the company after the listing.
The offering is part of a rocky start to the year for the recovering US IPO market. First-time share sales rose to $43 billion last year, 64% higher than 2023 but below the average in the decade prior to the pandemic, data compiled by Bloomberg show. Venture Global Inc. shares have slumped since the liquefied natural gas exporter’s troubled IPO last week.
Well-Known Brands
Smithfield produces packaged meats and fresh pork and sells them under well-known brands including Eckrich, Nathan’s Famous and its eponymous line. It also has a hog production business, which helps supply its fresh pork segment.
The Smithfield, Virginia-based company had net income of $581 million on revenue of $10.2 billion for the nine months ending Sept. 29, compared with a net loss of $2 million on revenue of $10.6 billion a year earlier, according to a filing.
The company has been streamlining its operations ahead of its listing, separating its European operations into a standalone business in August. In December, Smithfield agreed to transfer part of its hog farming operations to a new venture controlled by Murphy Family Ventures LLC. It’s also sold its hog production assets in Utah and some farms in Missouri in recent months, the filing shows.
“We’ve done all of that heavy lifting, so now, as we come back to the US market, our strategy is all about growth — and that growth will be led by our packaged-meats business,” Smithfield chief executive officer Shane Smith said in an interview. The company also said it has no plans for additional plant closures.