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Petco stock soared in its trading debut Thursday after its initial public offering prices above forecasts late Wednesday.
X The pet supply retailer raised $864 million from its IPO after selling 48 million shares at $18 each, above the expected range of $14-$17. At that price, the company’s market valuation tops $4.6 billion.
Petco Health and Wellness (WOOF) will join the Nasdaq under the ticker symbol WOOF. Goldman Sachs and Bank of America are the lead banks for the IPO.
Shares jumped 69% to 30.39 on the stock market today.
The isn’t the first time Petco has made a public debut. It first went public in 1994 before going private in 2000. Then it went public again in 2002 before going private again in 2006.
According to IPO research and advisory firm IPO Boutique, Petco is “well-oversubscribed” and, it added, “the underwriters are currently guiding pricing to the high-end or above the $14-$17 range.”
More pet-focused IPOs are on the way in 2021. BarkBox, a popular monthly subscription service for dogs, is expected to go public via a merger with Northern Star Acquisitions, a blank-check company, in the second quarter. It will be listed on the New York Stock Exchange under the ticker BARK.
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Petco Stock Joins Rally
Pet ownership has boomed during the Covid-19 pandemic as Americans went on adopting sprees. Shelter Animals Count, a database that follows 500 shelters around the U.S., said adoptions rose 15% in 2020 vs. 2019.
Americans also spent more money on their pets last year. A LendingTree poll in October found that 1 in 3 pet owners increased spending on their pets during the pandemic even as unemployment rose and other types of spending fell.
The trend has lifted other pet stocks like Chewy (CHWY) and Freshpet (FRPT), while PetMed Express (PETS) and PetIQ (PETQ) have been more mixed.
Chewy stock fell 1% Thursday after surging 8% Wednesday. Freshpet dipped 0.5%.
Follow Gillian Rich on Twitter for investing news and more.
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Shopify could benefit from an acceleration in e-commerce, says Oppenheimer.
Andrew Harrer/Bloomberg
Another day, another set of recommendations for how to play the cloud.
Since the start of the year, a number of analysts have weighed in with thoughts on the outlook for the cloud software sector, after the group cranked out fantastic returns in 2020. On Thursday it was Oppenheimer analyst Brian Schwartz’s turn.

In a 116-page report, he laid out the case for taking a more selective approach to the sector this year, noting that multiple expansion is likely to be limited after last year’s fat gains. But he has plenty of stock picks to offer, and as part of his call adjusted ratings on several stocks.
“Our 2021 outlook … is positive because of the potential for outsized stock returns, though we expect share outperformance for this year to come more from upside to estimates and company-specific catalysts,” Schwartz wrote in his research note.
“SaaS [software as a service] technology presents a powerful market setting for durable growth and cash generation, and is experiencing accelerating market adoption from the Covid-19 pandemic,” he continued. “While SaaS valuations have reached the top shelf versus historical averages… we think the premiums are justifiable [because of] the scarcity of public SaaS names, investors searching for growth in a slow-growth macro recovery, heightened consolidation and private-equity interests for these names, investors playing catch-up and chasing performance, and low rates.”
Schwartz raised his ratings on both Shopify (SHOP) and ServiceNow (NOW) to the equivalent of Buy from the equivalent of Hold, and set target prices of $1,300 for Shopify and $600 for Service Now.
The analyst concedes that he’s “late to the party” on both stocks, but adds that he sees both companies gaining market share, innovating and “remaining in the Street’s good grades in 2021, even with any missteps.” He also downgraded eGain (EGAN) to the equivalent of Hold from the equivalent of Buy, in part because the stock has rallied 57% since mid-December 2019.
For Shopify, the analyst offered five reasons to own the e-commerce software company’s stock. First, he noted that the company operates in a “very large and accelerating” market. Second, he argued the company should be a “rule of 40” company for a long time to come—referring to companies that can grow revenue at better than 40% with gross margins above 40%. Third, he said the company can gain share in the global market; he also noted that the pandemic is driving an acceleration in e-commerce; and finally, he wrote that the company’s “international opportunity is still ahead.”
As for ServiceNow, Schwartz writes that the company “stands out … as the pioneering trailblazer in SaaS for IT services management.” He adds that ServiceNow “has transitioned and progressed over the years into a verifiable cloud platform success story as it rides atop a best-in-class and unified platform with multiple product pillars of substantial scale, profits, and growth trajectory.”
Schwartz includes both Shopify and ServiceNow on his list of top picks for 2021. Other picks include Adobe (ADBE), Paycom Software (PAYC), Coupa Software (COUP), Medallia (MDLA), and Workday (WDAY). He suggests that investors avoid Paylocity (PCTY) and 2U (TWOU), as well as eGain.
Despite the upgrades, Shopify was down 0.5%, to $1,194.27 on Thursday afternoon, while ServiceNow was off 0.7% to $518.04. eGain shares were down 0.8%, while the S&P 500 was up 0.1%.
Write to Eric J. Savitz at eric.savitz@barrons.com […]

Synchrony Financial and Walgreens are launching a card portfolio.
This move could reinvigorate the issuer’s business by tapping into a fast-growing retail sector.
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As part of a larger financial services push from Walgreens, the drugstore will team up with major private-label issuer Synchrony to debut a prepaid debit card, a store card, and a cobranded credit card set to run on the Mastercard network.

Synchrony Financial and Walgreens are launching a card portfolio. Insider Intelligence
Details remain scarce, but the cards, which are set to debut in H2 2021, will be tied to the chain’s new myWalgreens loyalty program and offer cash rewards, among other perks. The cobrand will also feature benefits on health and wellness spending specifically.
Partnering with Walgreens could help Synchrony reinvigorate growth by tapping into a strong and growing retail category.
Walgreens offers Synchrony access to regular volume, even amid the pandemic. Though overall US consumer spending has been down, essential goods sales have been up across categories. And health, personal care, and beauty hit $544.64 billion in retail sales last year, up 4.7% annually—the second-highest growth rate of any category, per eMarketer estimates from Insider Intelligence. Gains in Walgreens’ key category—and the products’ primary rewards focus—might help Synchrony attract customers and bring in volume, especially if it can tap into frequent repeat drugstore visits from prescription holders to generate primary card status.
And the Walgreens deal complements Synchrony’s ongoing partnership push as the issuer recovers from a rocky year. Synchrony has had a challenging few quarters after losing its Walmart partnership—a top-five portfolio—to Capital One and then facing further declines in spending amid the pandemic, although it has started to bounce back. To reinvigorate growth, the brand has entered into a slew of partnerships, including tie-ups with Verizon and Venmo. The Walgreens deal could complement these tie-ups and help the brand tap into a massive potential audience to bring in cardholders and, in turn, volume.
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7Park is being shut down as a standalone business two years after Vista bought it for $100 million, Insider has learned. Samantha Lee/Business Insider
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7Park Data, which Vista Equity Partners bought for $100 million, is shuttering as a standalone alt-data business and being absorbed into the Vista-owned software provider Apptio.
The company has struggled to deal with a new mandate from Vista, the loss of key outside data streams, and client departures, sources told Insider.
In 2017, 7Park had a large client roster including a star-studded list of buy-side firms like Tiger Global, Coatue, and Citadel, according to a pitch deck viewed by Insider.
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7Park Data, a darling of the alternative-data boom feeding quantitative hedge funds, is shuttering as a standalone business just two years after being acquired for $100 million by the private-equity juggernaut Vista Equity Partners.
Sources told Insider the Bellevue, Washington-based Apptio, another Vista portfolio company, would absorb 100% of 7Park’s business. 
A spokesperson for 7Park confirmed the deal, citing the strength of its tech. An Apptio spokesperson said in a statement that the company was “poised to enhance our robust IT Benchmarking solution as well as provide additional machine learning-driven data cleansing and auto classification capabilities” with the purchase. 
A Vista spokesperson declined to comment. The terms of the deal were not disclosed. 
The New York-headquartered 7Park has seen challenges in recent months, including client defections, losing access to key data streams, and a precipitous drop in revenues, according to people familiar with the matter who spoke on the condition of anonymity to preserve their relationships. Details regarding how 7Park, and its offerings, will be integrated into Apptio were not immediately clear.
Annual revenue has fallen by more than 50% since Vista purchased the company, according to people familiar with the company. 
Read more: PE shop Vista Equity Partners paid $100 million for 7Park to get in on the alt-data craze. Insiders describe the management turnover, amped up sales pressure, and change in strategy that followed.
The alt-data company’s plummeting fortunes mark a rare miss for Vista. In recent months, the private-equity firm, which has $73 billion in assets under management, has also been rocked by its billionaire cofounder Robert Smith’s admission to yearslong tax evasion and the exit of Brian Sheth, Vista’s No. 2.

7Park, founded in 2012, rose to prominence amid Wall Street’s embrace and shift toward novel data streams, such as retail foot traffic, credit-card statements, email receipts, and website and app traffic.
The company made most of its money selling this data to many of the world’s top hedge funds, which cleaned it up and packaged the intel into algorithms to inform prospective investments. The firm in 2017 produced roughly $15 million in revenue and had more than 140 clients, including Balyasny, Citadel, Coatue, Tiger Global, and SoftBank, according to a pitch deck presentation viewed by Insider.
It had ambitions of growing that revenue stream to more than $200 million, according to the presentation. 
In 2018, a breakout year for alternative-data providers, Vista bought the company for $100 million, adding a data up-and-comer to its portfolio of technology investments.
Read more: The alt-data industry is having growing pains after its sudden glow up — and insiders are looking at new pricing models and unlikely customers
But 7Park has encountered an array of obstacles since, including a slew of staff exits and leadership changes in 2019, Insider previously reported.
More importantly, the company had lost access to data streams throughout 2020.
Jumpshot, a data stream collected and sold by the cybersecurity firm Avast before being shut down in January 2020 following concerns over data privacy, was one such example. Jumpshot’s data was a part of 10 to 15% of 7Park’s offerings at the time, a person familiar with the situation had told Business Insider. While some of 7Park’s products that included Jumpshot data were salvageable, other were not, the person added.

7Park had previously faced issues around data streams going dark, a somewhat common peril of operating in the world of alternative data.
In 2015, two of 7Park’s critical data vendors were acquired nearly simultaneously, the person familiar with the situation previously told Business Insider. One of the acquiring companies wasn’t interested in working with 7Park, while the other was a competitor. As a result, the company was forced to quickly switch to new offerings essentially overnight to salvage the business, the person said. 
Read more: Alt data’s Wild West days may be ending as Congress and privacy advocates zero in on the industry. Nearly a dozen insiders tell us how data streams going dark is an ‘unhedgeable’ risk.
One former employee, who spoke on the condition of anonymity to speak freely, said the company was left scrambling in early 2019 when Google changed its policy to limit email-receipt data.
The company’s feed on email receipts at the time was one of its most accurate and a best seller, the person said. 
To be sure, 7Park’s view of the market, and its place in it, changed after the Vista acquisition, the person familiar with the situation previously told Insider. A key consideration of the company after the deal was the value it could provide Vista’s other portfolio companies when it came to their internal data, whether that be selling it or using it for other purposes, the person said.
But its eight-year run as a standalone firm has come to an end, and it will now be folded into Apptio, a software provider that Vista purchased for nearly $2 billion in 2018. 

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