Smithfield Foods Returns to Public Market with Rocky IPO

Smithfield Foods Inc. (SFD) shares fell approximately 4.33% in their return to the public market, following an initial public offering (IPO) priced below the expected range.

Key Points:

* Shares traded at $19.50, under the $20 IPO price.
* Smithfield and its subsidiary sold 26 million shares, raising $522 million.
* Market valuation at $7.7 billion, exceeding WH Group's projection of $5.38 billion.
* WH Group, Smithfield's parent company, retains majority control.
* IPO marks a challenging start for the US IPO market in 2023, following a strong 2022.

Well-Known Brand and Streamlined Operations:

Smithfield produces packaged meats and fresh pork under renowned brands like Eckrich, Nathan's Famous, and Smithfield. It has also streamlined operations, separating European and hog farming businesses.

Growth Strategy and Market Outlook:

CEO Shane Smith anticipates growth through packaged-meat products, as reduced cattle supply favors pork consumption. He remains optimistic about the outlook for dry sausage and other products.

Wan Long, WH Group Chairman:

Smithfield's Chinese parent, WH Group, is led by 84-year-old Chairman Wan Long, whose wealth exceeds $3 billion.

Trump's Immigration Policies:

Smithfield has warned of potential cost increases or disruptions due to immigration policy changes, but the company remains proactive in this area.

Antitrust Litigation:

Smithfield has settled claims of antitrust violations, but it faces ongoing lawsuits that it intends to defend.

IPO Underwriters:

The IPO was led by Morgan Stanley, Bank of America Corp., and Goldman Sachs Group Inc. Smithfield's shares trade on the Nasdaq Global Select Market under the symbol SFD.