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Smithfield Foods (SFD, Financials) launched its IPO on Tuesday, starting trading at $21.05 before falling to $20.18 by midday. On Wednesday, shares were priced at $19.29 as of 3:34:43 PM EST, reflecting a 3.5% drop from the previous close.
Pricing shares at $20.00, the first public offering fell short of the targeted range of $23 to $27. The IPO assessed the firm at more than $8 billion.
Having bought Smithfield for $4.7 billion in 2013, WH Group still owns almost 90% of it. Since the parent firm held the sold shares, Smithfield itself will not get any profits from the IPO.
Smithfield underlined its financial strength in the worldwide market by showing a net profit of $581 million on sales of $10.2 billion for the nine months ended September 29, 2024. Operating more than 500 American farms, the corporation contracts with 2,000 individual farmers. Last year, Smithfield made $14 billion in sales and employed 50,200 people worldwide.
Established in 1936 in Smithfield, Virginia, the enterprise generates approximately six billion pounds of meat and handles 27 million animals yearly. With profitability in the sector increasing since 2014, its packaged meats businessoffering brands like Eckrich, Nathan's Famous, and Farmlandhas grown to be the pillar of its company.
This article first appeared on GuruFocus.