Shares of the luxury cruise operator opened at $26.15, above its initial public offering price of $24. It’s currently up 10% at $26.44. Viking stock started trading on Wednesday on the New York Stock Exchange under the ticker VIK.
The company has a market valuation of $11.3 billion based on that opening price and more than 431 million in shares outstanding. The company raised $1.54 billion, the most money among U.S. initial public offerings this year. Shareholders Canada Pension Plan Investment Board and private equity group TPG also offered more than 53 million shares, an upsize of the initial plan.
Viking certainly picked an interesting day to start trading, with markets on edge after a Tuesday selloff over inflation fears and investors awaiting the latest interest-rate decision from the Federal Reserve. There’s more, too: Viking’s debut comes on the same day that one of the three other major cruise operators reports results, with earnings from
Norwegian Cruise Line Holdings
front-running Viking’s IPO.
The cruise line’s IPO should attract investors because of the company’s profitability, high-end niche, and growth potential, Barron’s has reported. Viking’s European river tours are popular with wealthy older Americans.
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Viking’s IPO is making a splash in a relatively quiet year for capital markets. Still, the company is riding what has been a rising tide for cruise operator stocks.
for example, was one of the best-performing names last year in the
last year, with a 162% jump. Only Big Tech’s
and
fared better. The stock, however, has had its share-price momentum slow.
Carnival’s stock is up 57% over the past 12 months but down 20% this year. Norwegian Cruise Line Holdings, which reported earnings on Wednesday, has seen its shares run up by a third over the past year though the stock has slid 6% since the start of January.
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The cruise sector was hit particularly hard by the Covid-19 pandemic and lagged behind much of the rest of the travel industry during reopening.
These companies can still be seen as in their post-Covid recovery phase, but the key question is whether the shares can continue to cruise higher from here.
Write to Jack Denton at jack.denton@barrons.com
