Mossimo Inc., the Irvine-based sports and leisure wear company, joined the parade of apparel-related public stock offerings to light up Wall Street, rocketing 39% above its initial offering price Friday and ending the day as the second-most-active issue on the New York Stock Exchange.
Hot from the moment the market opened, Mossimo's stock closed at $25, with 3.6 million shares changing hands.
The company's shares were priced at $18, above the anticipated $14 to $16 range. Strong demand prompted the company to increase its offering size by 1 million shares to a total of 4 million. Mossimo and its founder each sold 2 million shares.
Founder and Chairman Mossimo Giannulli, who at 32 is the youngest chairman of a company listed on the exchange, was on the trading floor when the market opened.
"It was so amazing to see all these savvy institutional people responding to our story so strongly," Giannulli said. "Next to the birth of my child, it was the most incredible experience of my life."
Market observers linked Mossimo Inc.'s strong first-day performance to Wall Street's continued willingness to embrace new retail-oriented stock issues--even as many retailers struggle to turn a profit.
"It's a good company and the deal was attractively priced," said Ryan Jacob, research director for New York-based IPO Value Monitor. "But the timing was especially good. It was the perfect time for a stock like this to go public."
Mossimo joins several other apparel companies that recently met with success on Wall Street.
In October, Gucci Group generated $539 million and Intimate Brands Inc., operator of the Victoria's Secret chain, raised $680 million in public offerings. In August, Oakley Inc. founder and Chairman Jim Jannard saw the value of his holdings soar to $530 million following the upscale sunglass company's initial offering.
The Mossimo stock offering marked the latest chapter in the business life of Giannulli, a Newport Beach resident who started his namesake company by selling volleyball shorts and T-shirts. Based on Friday's closing price, the 11 million shares still held by Giannulli have soared in value to $275 million. He retains 73% of the company's stock.
Mossimo reported $15.1 million in net income for the nine-month period ended Sept. 30, up from $7.4 million a year earlier. Revenue for the period rocketed to $53.8 million from $30.7 million.