Sun Country’s stock jumped in its debut on Wednesday after pricing an initial public offering above expectations on Tuesday, with air travel increasing and airline stocks skyrocketing.
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The low-cost carrier cost 24 per share, above the expected range of 21 to 23, valuing the company at $ 1.34 billion.
Sun Country Airlines (SNCY) sold 9.09 million shares and raised $ 218.2 million with the IPO. It plans to use part of the proceeds from the offer to repay the loan from the federal government’s CARES Act.
The company posted a loss of $ 3.9 million last year and revenue of $ 401.5 million, according to regulatory documents.
Sun Country’s shares jumped 42% to 34.00 on Nasdaq in the stock market today. Discount carrier Southwest Airlines (LUV) rose 1.3%, and ultra low cost carrier Spirit Airlines (SAVE) rose 1%.
Among other airline actions, American Airlines (AAL) rose 0.7%, United airlines (UAL) gained 1.3% and Delta Airlines (DAL) added 0.8%.
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Rival may follow Sun Country’s stock debut
Airlines have struggled in the midst of the coronavirus pandemic, but air travel has increased in recent weeks, with increased vaccine distribution in the U.S.
The Transportation Security Administration said it has tracked more than 1 million travelers in the past six days as the normally busy spring break season begins.
Sun Country’s shares go public when the airlines’ shares have surpassed or almost recovered to levels prior to the pandemic. On Monday, major carriers reported stronger orders or an increase in cash flow forecasts.
The increase in travel also coincides with another airline’s IPO, which may take place shortly after Sun Country’s stock debut.
Last week, low-cost operator Frontier Airlines filed for an IPO, after dropping plans to go public last year. She plans to list on Nasdaq under the symbol FRNT.
Frontier is owned by Indigo Partners, a private equity firm that also has stakes in three other ultra-low cost carriers, the Chilean JetSMART, the Mexican Volaris and the Hungarian Wizz Air.
Follow Gillian Rich on Twitter for aviation news and more.
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