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Monday, June 15, 2020

Going public: Shift4 makes big board debut

While the coronavirus pandemic has placed many business activities on hold, not so for Shift4 Payments’ initial public offering. The Allentown, Pa., payments processing company raised $345 on its first day of trading on the New York Stock Exchange, June 5.

At the start of the June 5 trading day a mask-wearing Jared Isaacman, Shift4 CEO, became the first to ring the opening bell in-person on the NYSE floor since it re-opened for trading in late May. But unlike past IPO-related bell-ringing ceremonies, the trading floor was not packed with spectators due to social distancing requirements.

Concurrent with the IPO, Isaacman put $100 million of his own money into Shift4 through a private stock placement, the company reported. Searchlight Capital, a private equity firm that has been backing Shift4, is reported to have purchased about 46 percent of available shares.

Shift4 shares, which trade under the ticker FOUR, were priced at $23 at the June 5 opening bell, well above what the company said it expected when it filed paperwork with the Securities Exchange Commission for the IPO in December 2019. The IPO also raised more than analysts expected. Renaissance Capital in early May predicted Shift4’s IPO would raise up to $300 million. As of June 15 Shift4’s share price had risen by than 55 percent.

A spokesman said Shift4 is unable to speak publicly about the IPO, pending expiration of a regulatory-imposed “quiet period” around the IPO. However, analysts have suggested that pent-up demand from the lack of IPOs during the coronavirus lockdown was one factor that drove interest in the offering. Warner Music Group, which went public just two days before Shift4 saw a 20 percent surge in share prices during the first few days of trading.

From basement to Wall Street

In a May 11 statement on an unrelated topic, Isaacman sounded hopeful about the economy, noting that transaction volumes had begun to pick up at Shift4 merchant locations. “With restrictions beginning to ease nationwide, we see meaningful signs of hope that the worst of the pandemic is behind us and we can steadily turn our attention to helping these businesses, especially the hospitality industry, get back on their feet,” he said.

Shift4 is a quintessential success story in merchant services. Isaacman founded the company in 1999, when he was a teenager, and ran what was then known as United Bank Card from his parents' basement., in Far Hills, N.J. In 2004, United Bank Card introduced the industry’s first free terminal placement program, and one year later was ranked high on Inc magazine’s Inc 500 list of fastest growing private companies.

The company underwent a few name changes before rebranding as Shift4 Payments in 2018, after relocating its headquarters to Allentown. It boasts over 200,000 customers, with a focus on the food and beverage, hospitality, retail and ecommerce verticals. For the 12 months ending on March 31, Shift4 reported it had booked $776 million in revenue. end of article

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