Cellular Goods makes historical IPO debut
Cellular Goods commenced trading on the London Stock Exchange at 8am this morning, under the ticker symbol CBX, making it the first pure-play biosynthetic cannabinoids consumer products company to list on the LSE.
The David Beckham-backed firm, saw its stock rise 310% to 20.50 pence at 8:15am from its IPO price of 5 pence, which had valued the company of £25m.
The IPO was 13 times oversubscribed, helping it raise gross proceeds of £13m, instead of the original £8m target. The oversubscribed placing and subsequent demand is testament to investor confidence in the Cellular Goods offering as well as the rapidly expanding cannabinoid market.
Commenting on Cellular Goods’ flotation, Alexis Abraham, Chief Executive Officer, said: “Cellular Goods’ debut on the London Stock Exchange is a major step in the Company’s development and provides a strong foundation to execute our long-term growth strategy. We are delighted with the strong support from a wide range of institutional and retail investors to build premium consumer products based on biosynthetic cannabinoids under the Cellular Goods brand.”
Cellular Goods was established in August 2018 to develop efficacy-led and research-backed cannabinoid products. The initial focus is on two product verticals: premium skincare and topical athletic recovery products to be launched from this autumn.
These will be made available through partnerships with leading online and physical retailers and direct to consumers through the Company’s website.
The Company has partnered with four leading biosynthetic cannabinoid producers in the United States who have experience and expertise in the manufacture of these compounds through a fermentationbased process to secure a consistent supply of legally-compliant raw materials.
The production of biosynthetic cannabinoids does not involve the cultivation or processing of the cannabis sativa plant.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: “With shares 13 times over-subscribed, initial demand for cannabinoid company Cellular Goods was always likely to be high and as trading has got underway it’s become a hot stock. Shares lifted to just over 29 pence, before falling back to 23 pence, still more than four times the issue price of 5 pence per share. The surge in the share price values the company at more than £100 million.
“David Beckham’s backing certainly added a celebrity glow to its listed debut. It might seem a bit of a curve ball for a man known for free kicks rather than scoring on the financial markets, but he certainly has form as a skincare and grooming guru.
“DB Ventures, the former England star’s commercial business took a minority stake in the business, which makes skincare and topical creams to provide relief for athletes using biosynthetic cannabinoids.
“It’s forecast that the global CBD skin products market alone could grow by a quarter over the next five years to almost $3.5 billion. But already it’s a highly competitive field, with innovations coming thick and fast from all over the world.
“Unlike many other IPOs which have made a debut on the market in recent months, this offer was open to investors, large and small. 192 million shares have been conditionally placed with institutional investors, and another 68 million were allocated to retail investors with 6,000 signing up through the Primary Bid platform.
“It’s not clear exactly how Mr Beckham’s backing will evolve with Cellular Goods but whether he’ll remain behind the scenes, or appear on the packaging, his personal brand has given the launch a bit of a kick.’’