Xoom IPO Priced Higher Than Expected
Feb 15th 2013 10:10AM
Updated Feb 19th 2013 6:35AM
An international money transfer company, Xoom Corp. (NASDAQ: XOOM), held its initial public offering this morning. The shares were offered at $16 apiece, above the estimated range of $13 to $15 a share. About 6.33 million shares were offered, and gross proceeds will reach more than $100 million. Of that, about $77.7 million will go to Xoom.
The company is selling 5.22 million shares, and certain shareholders are selling an additional 1.1 million shares. The underwriters have an option on an additional 948,750 shares.
Xoom anticipates net proceeds of $74.7 million ($88.8 million if the underwriters exercise their option), and the company said it will use the proceeds for working capital and general corporate purposes. Xoom may also use some of the proceeds to acquire "complementary businesses, products or technologies," but has not made specific commitments yet.
Xoom's chief competitor is the venerable Western Union Co. (NYSE: WU), and the new company makes its money primarily from transaction fees for its international money transfers. Unlike other international transfer firms, Xoom originates all its transactions online and its users can fund the transfer with a U.S.-based bank account, credit card or debit card. The company currently can make transfers between the United States and 30 countries.
As of 10:00 a.m. ET, no shares had yet been traded.
Filed under: 24/7 Wall St. Wire, Financial Stocks, Internet, IPOs Tagged: featured, WU, XOOM