Imaging company Matterport had a bumpy ride during its first day trading shares on the stock market, but by Friday evening prices ultimately settled slightly lower than they were when the opening bell rang earlier in the morning.
Matterport’s public debut Friday happened thanks to a merger with Gore Holdings VI, a firm known as a special acquisition company (SPAC) or blank check firm. Such companies exist solely to merge with other firms and help them get onto the stock market without having to hold a traditional initial public offering (IPO). News of the merger between Matterport and Gore Holdings VI was first announced in February.
On Friday morning, when the acquisition was finally completed, shares in the combined company began trading at $14.42. They quickly jumped in value by about $0.20, but then fell to under $14 per share. The price bounced around for the rest of the day before ultimately settling at around $14.20 per share.
As of the time the market closed Friday, Matterport’s share price meant that it had a market cap of just over $624 million.
To celebrate its stock market debut, Matterport created a digital rendering of the Nasdaq’s New York City facilities.
In a statement, company CEO RJ Pittman said “what better way to mark the significant milestone of Matterport becoming a public company than to digitize the iconic Nasdaq MarketSite where industry trailblazers like Matterport become public companies.”
While that public debut may be a bit underwhelming — every company would probably love to see its stock price soar right off the bat — there are reasons to believe it’s not a vote of no confidence from investors. First, many companies initially see a drop in their share prices when they begin trading. Most recently in real estate, for example, Compass saw its share price fall from a debut of more than $20 in April to a current price of less than $14.
Opendoor — which in December also used a SPAC to go public — also saw its share price fall from a debut of more than $31 to less than $23 in the following days. The iBuyer’s share prices have fluctuated considerably since then, but currently sit at about $14.40.
All of which is to say it’s not unusual for share prices to move up and down, and the real test for Matterport will be how it performs in the coming months and years.
The second reason Monday’s debut isn’t necessarily bad news is because a SPAC merger means motivated investors already had access to Matterport’s stock via Gore Holdings VI. Indeed, Gore Holdings VI shares saw a significant spike in price in February after news of the merger broke. Prices have settled back down since then, but the important thing to keep in mind is that if you wanted Matterport stock prior to Friday you could buy Gore Holdings VI shares and simply wait for them to turn into Matterport shares.
In that light, the fact that Matterport stock remains up compared to Gore Holdings VI stock six months ago — before the merger announcement — means investors do appear to believe the 3D imaging company has value going forward.