Compass seems to have found its bearings. The SoftBank-backed real estate brokerage avoided the embarrassment of what Wall Streeters call a “broken IPO”—where the stock price falls below the IPO price on the first day of trading—thanks to its savvy decision to slash the size of the offering yesterday.
As a result, Compass shares managed to inch up on their debut today, closing at $20.15, up a whole 12% from the IPO price of $18. Never mind that originally Compass was going to sell shares at between $23 and $26 apiece. It also helped that the market was on an upswing today, with the S&P 500 passing the 4,000 level for the first time. Whatever the reason, Compass executives will count this as a victory—as will SoftBank, which is now sitting on a profit of $1.5 billion on its $1 billion investment in the company.