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Unity Software soars in blockbuster NYSE debut
[NEW YORK] Shares of Unity Software soared in their debut on the New York Stock Exchange on Friday, giving the gaming platform a market value of around US$18 billion and signaling sustained demand for new stocks.
The Silicon Valley startup's stock, which debuted at US$75 per share, closed at US$68.35, well above the US$52 per share in its initial public offering (IPO) on Thursday.
"Going public is good for discipline. We can also compensate our employees with more transparency," said Unity chief executive John Riccitiello.
"We picked the date earlier this year, and we never expected it's going to be a hot IPO market."
Unlike most companies that require employees to hold onto the stock for a lockup period following the public debut, Unity allows employees to sell 15 per cent of their vested shares on the day of IPO.
It is the second US$1 billion-plus US software IPO this week to price above the targeted range after data warehouse company Snowflake Inc raised more than US$3 billion in the largest US listing so far this year.
Unity's software platform is widely used by game developers, artists, architects and filmmakers to create, run and monetise interactive 3D content.
"The company's (IPO) timing is good. Not only have US market indices returned to records, but one of Unity's top competitors, Epic Games, is also challenging Apple in court," said Michael Underhill, chief investment officer for Capital Innovations, which invests in IPOs.
Last year, more than half of the top 1,000 games in Apple's App Store and Google's Play Store were built using Unity's software platform, Mr Underhill added.
For Unity's IPO, the lead underwriting banks, Goldman Sachs Group and Credit Suisse Group, created an online system at Unity's request to take indications of interest from investors, with the aim of getting a more accurate gauge of demand. Orders for an IPO are typically made over the phone.
"We're so data-centric in everything we do. The idea of working with an IPO system perfected in the 1920s just didn't appeal to us," said Mr Riccitiello.