Dutch fintech firm Adyen surged nearly 100% in their first day trading as a public company, going from $8.3B to 17B overnight and making their IPO one of Europe’s biggest ever in the tech sector.
Talk about getting underpriced.
Or did they? The 12-year-old company has been profitable for some time, with revenue over $1.18B last year — and their debut at $283 per share (that since doubled) was nothing to shake a stick at.
Still, this jaw-dropping valuation spike caught everyone by surprise, and has many seeing flashes of a certain pre-millennium-explosion…
It’s what we in the biz call an “overreaction” or, as Bloomberg puts it, just plain “unhealthy.”
These days, stable, profitable companies seem rarer than unicorns (the actual mythical horse kind), and when they do come around, investors lose their cool like a pre-teen at a boy-girl party.
After all, Adyen processed $127B in payments last year and works with companies like Netflix, Facebook, and Spotify (that’s 50% of FANG, people!).
But experts are skeptical.
The word “bubble” isn’t one to be thrown around willy-nilly, but, compared to the typical 10-15% spike of a successful IPO, Adyen’s bonkers valuation seems less than sustainable.