Online real estate brokerage Redfin became the latest real estate company to go public, when the company’s shares began trading on the Nasdaq on Friday morning.
Interestingly, the company priced its initial public offering at $15 per share, which is actually beyond the range the company set in its prospectus.
Last month, Redfin laid out its IPO plans in a S-1 form filed with the Securities and Exchange Commissions. Then, earlier this month, Redfin disclosed that it plans to sell 9,231,000 shares of common stock in its IPO, and estimated a price range of between $12 and $14.
But Redfin set the actual price for its IPO at $15, and traders ate up the stock after it began trading at approximately 10am Eastern on Friday.
In early trading, Redfin’s stock (trading under the symbol “RDFN”) shot up past $20 per share, an increase of more than 35% above its initial trading price.
Redfin’s early projections of trading at $14 per share would have placed the company’s market cap beyond $1 billion, so trading at $15 or well beyond that pushes Redfin comfortably into the billion-dollar category.
Redfin initially said that it intends to use the net proceeds that its receives from the offering for “working capital and other general corporate purposes, including technology and development and marketing activities, general and administrative matters, and capital expenditures.”
It added that it would use a portion of the net proceeds to invest in or acquire third-party businesses, products, services, technologies, or other assets.
Redfin started as an online real estate brokerage, but the company has been expanding into other areas of the home buying process recently.
Earlier this year, Redfin started “Redfin Now,” a new service where Redfin buys homes directly from home sellers and resell them to buyers.
The company called the program “experimental,” but added that it has faith that Redfin Now will work.
“We believe our industry-leading algorithms for calculating what a home is worth will limit the risk that the price we pay a Redfin Now customer for her home is below the price we charge a new buyer for that home,” Redfin said in its prospectus.
“And we believe our ability to reach more than 20 million monthly average visitors through our website and mobile application, coupled with our network of Redfin buyers, will let us effectively resell the homes we purchase through Redfin Now,” the company added.
Redfin Now is currently only offered to a limited number of customers in two non-disclosed markets, but the company said that depending on the program’s early results, it could be expanded beyond that.
That news came shortly after Redfin launched Redfin Mortgage, adding a mortgage-lending operation into the company’s existing digital-focused real estate brokerage and title businesses.
Back in January, the company said that its “ultimate goal” is to have is an “entirely digital process, with better service, a faster closing and lower fees.”
And now the company has a lot more money to put towards those endeavors thanks to its IPO.
The company celebrated its introduction to the Nasdaq by ringing the opening bell on Friday, and based on the company’s posts on Twitter and some pictures shared by Nasdaq, the results of the company’s IPO have Redfin executives rather excited.
Check out the video below for a quick break down of the Redfin news.