Brazil’s Traders Club has enough demand for its IPO

RIO DE JANEIRO, BRAZIL – Traders Club social platform for investors currently has sufficient demand for its initial public offering (IPO), according to two sources close to the operation, which on Friday (23) closes the reservation period.

Traders Club established an estimated share price between R$9 (US$1.73) and R$11.25 for the offering earlier this month, which involves the primary offering of up to 75 million shares, including additional and supplementary lots.

According to one of the sources, there is three times oversupply at the average price of the indicative range, which is R$10.13.

At this price, the offering would total almost R$760 million, considering the placement of additional and supplementary shares.

Another source said that demand is several times above the floor and more than one time the ceiling among institutional investors, disregarding potential anchor investors.

IPO demand is still likely to be affected by retail investors’ movement, which typically occurs near the close of reservations.

In recent weeks, while some companies either dropped or deferred plans to list their shares on the stock exchange, such as Privalia and Intecement, citing volatility or unfavorable market, others saw their shares soar on their debuts.

The main highlight was SmartFit (SMFT3), with the gym chain’s shares closing the first trading session soaring almost 35%.

In the case of Traders Club, the funds will be used in strategic acquisitions to enhance the company’s ecosystem and investments in platform development and marketing.

Founded in 2016, Traders Club offers services such as news, research, and chats about investments. It has a 450,000 user base on its app.

In 2020, the platform posted a net revenue of R$40 million, with EBITDA of R$18.8 million and a profit of R$13 million. In the first quarter 2021, revenues totaled R$21 million, with EBITDA of R$663,000 and a loss of R$26,000.

BTG Pactual (BPAC11) and Modal Bank are the IPO’s coordinators.

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