OrthoPediatrics shares surge more than 50% in trading debut

Shares of OrthoPediatrics Corp. surged more than 50% in their first day of trading Thursday as investors flocked to the maker of implants and other instruments for children with bone or muscle injuries.

The stock KIDS, +47.85%  opened up 38%, putting it in ninth position in the top 10 best-performing initial public offerings of 2017 measured by price offer to open price, according to Dealogic.

The top performer also made its debut Thursday. CarGurus Inc. CARG, +72.38% a marketplace for used and new cars, jumped 81% at the open. That put it ahead of TDH Holdings Inc. PETZ, -0.21% a maker of pet food that gained 59% at the open on its first day of trading in September. 

Read now: CarGurus shares rocket 80% on their first day of trading

OrthoPediatrics, which markets 21 surgical systems that serve three of the largest categories within the pediatric orthopedic market, sold 4 million shares at $13 a pop to raise $52 million.

The company is trading on Nasdaq under the ticker symbol “KIDS”. Piper Jaffray and Stifel were lead bookrunners on the deal, with William Blair acting as lead manager and BTIG acting as co-manager.

In its IPO prospectus, OrthoPediatrics estimated that the part of the market it serves offered a $1.4 billion opportunity in 2015, with about $800 million of that total in the U.S.

“We address this unmet market need and sell the broadest product offering specifically designed for children with orthopedic conditions,” said the prospectus.

See: MongoDB IPO: 5 things to know about database-software ‘unicorn’

The company is planning to use the proceeds of the offering to pay dividends on its Series B preferred stock, to repay debt, to invest in implant and instrument sets for its customers, to fund research and development, to expand sales and marketing and for the catchall “general corporate purposes.”

The company had revenue of $8.07 million in 2016, up from $6.18 million the year earlier. It had a net loss of $1.81 million, narrower than the $2.11 million loss posted in 2015.

The S&P 500 SPX, -0.17%  has gained about 14% in 2017, while the Dow Jones Industrial Average SPX, -0.17%  has gained 15%.

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