ATLANTA -- United Parcel Service became a publicly traded company Wednesday, and investors quickly pushed the share price more than 30 percent higher for the world's biggest package carrier.
In its first hour of trading on the New York Stock Exchange, UPS was up $18 from its initial offering price of $50 per share on early volume of about 46 million shares.The stock opened at $65 shortly after UPS Chairman and chief executive James Kelly rang the trading bell on the NYSE, which featured a large UPS banner and several traders dressed in UPS's familiar brown jackets.
The offering, amounting to 109.4 million shares, or about 10 percent of the Atlanta-based company, became the biggest domestic IPO to date at $5.47 billion. That easily surpassed the previous largest IPO of $4.4 billion when oil company Conoco Inc. went public in October 1998.
It came a day after the successful debut of shares in Microsoft co-founder Paul Allen's Charter Communications. The cable company's stock shot up 20 percent in its first day of trading on the NASDAQ Stock Market.
The St. Louis-based company priced 170 million shares at $19 to raise $3.23 billion -- the fourth-largest domestic IPO in history, accounting for UPS's market debut.
Analysts say UPS is an instant blue chip on Wall Street, which likes the company's strong performance record and prospects for snaring a sizable portion of the business of delivering the stuff sold online.
UPS reported net income of $1.7 billion on revenues of $24.8 billion last year.
"There's certainly a strong demand out there for it," said Cameron McLennan, a logistics and transportation analyst with Scott and Stringfellow in Richmond, Va. "It's a brand-name type company. This is an IPO of a company with a history."
While UPS' promising future in e-commerce deliveries will lure many investors, the company's financial performance over the long-haul is even more enticing, McLennan said.