(Golf stock) Shares of Sacks Parente Golf Inc. closed 624% higher on Tuesday in their first day of trading on Nasdaq after the company raised its initial public offering price.
The deal is priced at $4 a share, the lowest in the $4 to $5 suggested range, and was last listed at $19. Shares of Sacks Parente Golf fell about 7% in extended trading Tuesday.
The company sold 3.2 million shares to raise $12.8 million through its sole underwriting firm, Benchmark Company, with proceeds going towards expansion in Asia, professional touring, marketing expenses, and fundraising, among other things.
With 13.8 million shares outstanding after the transaction closed, the company was valued at $55.2 million. The stock trades under the symbol SPGC.
The business is not profitable. It recorded a net loss of $3.5 million in 2022, higher than the $302,000 loss recorded in the year-ago period. Revenue dropped to $190,000 from $200,000 in 2021.
What does a golf company do?
“We design, manufacture, and sell high-quality, state-of-the-art golf equipment, including golf equipment, golf shafts, and related product groups,” the company said in the document filed with its IPO. Matthew Kennedy, senior IPO market strategist at Renaissance Capital, an institutional IPO research and exchange-traded fund provider, said Golf’s latest IPO is from Acushnet Holdings Corp., the parent company of the company. Titleist brand, in 2016.
Topgolf was rumored to be an IPO candidate before being acquired by the publicly traded Callaway Golf in 2021 for around $2 billion. Callaway, later renamed Topgolf Callaway Brands Corp., is the leader in this field. Kennedy told MarketWatch: “Golf equipment is definitely a competitive industry, with longstanding brands owned by Acushnet and Callaway, big sports equipment companies like Wilson and Puma, [archaic] brands. private sector] like TaylorMade, etc.
The deal comes at a time when the sport is going through a renaissance, Kennedy said, fueled in part by casual games like TopGolf, a high-tech game played at specialty resorts. provide food and drink, just like bowling.
Sacks Parente is still a startup and makes its equipment at a factory in Missouri.
“The company’s putters are currently around $400, a price that’s by no means exclusive to golf professionals. Many golf enthusiasts would shell out $400 for a putter if they were to put it on the table. They think it’s going to reduce their hit count,” Kennedy said.
Renaissance’s IPO portfolio swap fund is up 30% year-to-date, while the S&P 500 is up 16%.
