NEW YORK – Shares of athletic apparel maker Under Armour (UARM) doubled in their market debut Friday, showing that a well-known brand name can help sell an initial public offering.
The shares rose to $26.14 on the Nasdaq, up from a $13 IPO price.
The 10-year old company, which last year recorded $14.3 million in net income on $205.2 million in revenues, this year has been heavily promoting its brand in TV ads.
"From what I understand from retail-type people, they can't keep this merchandise on the shelf. It just goes," said Sal Morreale, an institutional salesman who tracks IPOs for Cantor Fitzgerald in Los Angeles.
He added that having a well-known consumer brand is often a help in stimulating IPO demand.
"It always helps the company when they're very widely known and have name brand recognition," Morreale said.
Under Armour sold 9.5 million shares in the 12.1 million-share deal, which was worth $157.6 million. The Baltimore-based company plans to use the proceeds of the IPO to pay down debt and for general corporate purposes.
The company this week raised the target price range for its shares to $10 to $12, from an earlier forecast of $7.50 to $9.50.
Goldman Sachs & Co., a unit of Goldman Sachs Group Inc. (GS) was the lead underwriter on the offering.
Two other U.S. IPOs met with less enthusiastic market reception.
Insurance company Amerisafe Inc. (AMSF) debuted at $9 per share, at the low end of its forecast range. Its shares dipped 3.7 percent to $8.67 on the Nasdaq.
It plans to use the proceeds of its $72 million deal to repay debt and for general working capital
Equestrian-products retailer Dover Saddlery Inc. (DOVR) issued shares at $10, also at the low end of its range. Its shares rose 2.5 percent to $10.25 on the Nasdaq.
Its offer included 2.75 million shares, with 1.4 million from the company and the rest from selling shareholders. It plans to use its proceeds to fund expansion.