- Stock up 14.3% in unconditional dealings
- Affordable computer developer already profitable
- IPO will boost brand awareness
Today marked the first day of unconditional dealing on the stock market for Raspberry Pi (RPI), which meant investors could buy and sell shares in the affordable computer designer as they wished without restrictions.
This trading freedom saw the stock enjoy another pop, jumping a further 14.3% to 471p versus a top-of-the-range listing price of 280p.
Investors lucky enough to get in at the start have already enjoyed juicy returns.
Bumper demand for shares in the Cambridge-based business meant some retail investors didn’t get everything they wanted in the IPO offer and might have come back for more at a higher price.
(RASPBERRY) JAM TODAY
Founded by chief executive Eben Upton in 2012 to make computing more accessible to young people, Raspberry Pi designs and develops low-cost SBCs (single board computers) and compute modules for industrial customers, enthusiasts and educators around the world.
Investors are clearly enthused by Raspberry Pi, a profitable, established name that isn’t reliant on the ‘jam tomorrow’ story that often props up technology IPOs.
The company has a large community of users; it makes money rather than simply being a bright idea that is not yet commercialised; and there is a strong social angle as Raspberry Pi has education built into its business model.
Backed by strategic shareholders Sony (6758:TYO) and Arm (ARM:NASDAQ), Raspberry Pi believes it can sustain its strong growth trajectory in a TAM (total addressable market) worth some $21.2 billion (£16.7 billion).
Pre-tax profit powered up by an impressive 90% to $38.2 million last year.
However, the company has flagged volatility in customer demand in 2024-to-date, which has led to ‘higher than usual levels of inventory’, although management expects this to normalise over the course of 2024 ‘resulting in stronger results in the second half of the year than in the first half’.
BRAND AWARENESS BOOST
Russ Mould, investment director at AJ Bell, said a key reason why companies float on the stock market is to raise brand awareness and boost their reputation.
‘Being a listed company means the accounts are transparent and everything it does is in full public view. A lot of people like this openness and it can help to drive more business as people often have greater trust in the company,’ explained Mould.
‘Having a successful IPO also raises awareness of a stock among the investment community and Raspberry Pi has been the talk of the town after its stock market debut went off with a bang earlier this week.’
Disclaimer: Financial services firm AJ Bell owns Shares Magazine. The author (James Crux) and editor (Martin Gamble) own shares in AJ Bell.
