Venture Global IPO Range Narrows Amid Investor Concerns
Venture Global Inc. has significantly reduced the price range for its upcoming initial public offering (IPO), potentially dampening market value expectations.
Reduced Price Range and Valuation
The liquefied natural gas (LNG) exporter is now offering 70 million shares at $23-$27 each, down from the initial $40-$46 range. This represents a reduction of over 40%, with the company's market valuation now estimated at $65 billion, compared to the previous target of $110 billion.
Investor Feedback
Sources close to the deal attribute the lower price range to investor feedback, suggesting they preferred a more conservative valuation. A representative for Venture Global has not commented.
Setback for US Energy IPOs
The lower pricing is a setback for potential IPO candidates in the US energy sector, which had looked to Venture Global's offering to revive sentiment around first-time share sales. Only six energy IPOs have listed on US exchanges in 2024, raising a mere $667 million, the lowest volume in 21 years.
High Valuation Relative to Competitors
Despite the reduced price range, Venture Global still aims for a lofty valuation compared to competitors. Cheniere Energy Inc., the largest US LNG exporter, has a market cap of $56 billion after a 50% surge in the past year.
Operating Performance and Litigation
Venture Global has reported net income of $756 million for the nine months ended September 30, 2024, on revenue of $3.4 billion, compared to $3.6 billion and $6.3 billion, respectively, in the same period in 2023.
The company is currently engaged in arbitration battles with major energy customers, including BP and Shell, over contract disputes related to its Calcasieu Pass plant.
Outlook for LNG
LNG is anticipated to play a vital role in global energy markets, as countries seek cleaner alternatives to oil and coal. The US is poised to strengthen its position as the world's largest LNG supplier under the current energy policy.