Smithfield Foods' stock saw a slight drop in its initial day of trading, following the pricing of its new shares below their previously advertised range. On Monday, Smithfield and its Chinese parent company, WH Group, set the price for nearly 26.1 million shares at $20 each in their joint initial public offering (IPO). The originally proposed offering comprised 34.8 million shares priced between $23 and $27. The shares kicked off trading on Nasdaq Tuesday with a modest start at $21.05, decreasing 1.3% to end the day at $19.75.
The IPO symbolizes Smithfield's return to the American listing, following its acquisition in 2013 by the WH Group, a transaction nearly worth $5 billion, that made the company private. However, the lukewarm response to the IPO coupled with the low pricing indicates an overestimation of demand by the company, which entered the market amid anticipation of abundant deal activity this year.
Having taken over Smithfield over a decade ago in what was then the largest purchase of a U.S. firm by a Chinese firm, WH Group will keep around 90% ownership of Smithfield. This IPO by Smithfield is noted as the most substantial by a food company in the U.S. since the $1.6 billion listing by Sweden's Oatly Group in 2021.
In addition to pork production, Smithfield retails packaged meat under various brand names, including its own, Eckrich, Nathan’s Famous and Farmer John. This article includes updates regarding the closing share price and additional background details.