From CNET: GoDaddy, the website registration and hosting service, expects to raise hundreds of millions of dollars on Wednesday in a long-planned initial public offering.
The company on Wednesday priced its shares at $20, above its previously predicted range of $17 to $19. At that rate, GoDaddy will raise $460 million on the 23 million shares it plans to offer on the New York Stock Exchange under the ticker symbol "GDDY." GoDaddy has set aside an additional 3 million shares that it will offer if demand is high. Those shares, saved for what's called "overallotment," would push the amount of cash GoDaddy raises to $520 million.
GoDaddy's decision to offer shares at above its initial price range is likely due to positive reactions it received from would-be investors during a recent roadshow. That roadshow, which all public companies must undetake, allows them to pitch their companies to institutional investors and gauge interest. Based on the interest in its shares, a company then decide its offering price. The idea is to offer shares at a price that the market will find appealing, thus selling out of the initial allotment and then getting to offer the extra shares. Issuing those additional shares indicates that demand is strong and that the investment community wants more shares.
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