By Arasu Kannagi Basil
March 6 (Reuters) – Medtronic’s diabetes business MiniMed shares opened 4.8% below their offer price in Nasdaq debut on Friday, valuing it at $5.35 billion, as heightened market volatility continues to roil the new listings market.
The IPO market has been navigating challenges over the past month amid concerns around AI disruption and uncertainty linked to the conflict in the Middle East, dampening investor appetite for new listings.
Wall Street’s most-watched gauge of investor anxiety, the CBOE Volatility Index, hit a four-month high on Friday as a weak jobs report further weighed on sentiment.
MiniMed going ahead with its IPO amid high market volatility “shows that the U.S. IPO market is still open, but that it has become a price-sensitive buyers’ market,” said IPOX Research Associate Lukas Muehlbauer.
Its stock opened at $19.05 each, compared with the $20 offer price, at which it sold 28 million shares and raised $560 million. The shares were sold well below the marketed range of $25 to $28 apiece.
Some analysts were apprehensive that MiniMed’s growth prospects might not justify the valuation of over $7 billion the firm was seeking in its IPO.
MiniMed was founded in 1983 with a goal to make diabetes care wearable and consumer-focused. Medtronic took over the business nearly 25 years ago.
The company makes products such as insulin pumps, glucose monitoring systems and sensors for type 1 and type 2 diabetes.
The business returned to growth in recent quarters after addressing regulatory concerns over management quality and cybersecurity issues related to certain devices in previous years.
“I don’t think about the business as being a turnaround anymore. We’re really at the point of acceleration,” MiniMed CEO Que Dallara told Reuters.
“We’ve also continued to deliver on our roadmap.” The company will launch its smart multiple daily injection system called MiniMed Go in the US in the spring, she said.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Vijay Kishore and Shinjini Ganguli)
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