Editor’s note: This article was updated Dec. 31 to provide more context on the price action in VGR stock following the spinoff.
Just in time for the New Year, real estate brokerage Douglas Elliman (NYSE:DOUG) has decided to go public. Now trading as DOUG stock on the New York Stock Exchange, investors looking for exposure to the growth in the luxury real estate market now have a known name to look to.
This deal appears to be an intriguing one for a number of reasons. Notably, Douglas Elliman was held as a wholly owned subsidiary under Vector Group (NYSE:VGR). While this spinoff initially resulted in VGR stock taking off, today has been different. Currently, Vector Group has given up all its yearly gains on the second-to-last day of the year. Today’s loss for investors in Vector Group stands at 34% at the time of writing. Ouch. However, investors should note this price action accounts for the distribution of the spinoff company. Each Vector Group shareholder received one share of DOUG stock for every two shares of VGR stock they held.
Investors should also take a close look at Douglas Elliman’s reported numbers. This luxury real estate brokerage reported $354 million in revenue this past quarter, up 70% from $208 million for the same quarter a year prior. Closed sales volume increased 62% to $12.6 billion, a rather impressive number. And these numbers suggest to investors that this company may have more operating leverage than competitors in the space — an enticing proposition.
Here are seven top things investors may want to know about this listing today.
What to Know as DOUG Stock Goes Public
- Douglas Elliman was able to raise $200 million of net cash as a result of the deal.
- Shares of DOUG stock were listed at $10 per share but rose as high as $12.66, a 27% increase this morning.
- Since then, shares of DOUG stock have settled down at around $10.30 per share, a reasonable gain of 3%.
- The company reports strong revenue growth and healthy margins.
- Accordingly, Douglas Elliman expects to use this growth capital to amplify its returns for shareholders.
- Additional liquidity events could come from the market, something bullish for long-term investors.
- Indeed, this listing today is one investors may want to keep their eye on heading into 2022.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.