Shares of Kohlberg Kravis Roberts fell 2.9 percent in the firm’s debut on the New York Stock Exchange Thursday, from $10.50 per share to $10.20 per share, but the decline was perceived primarily as a result of what turned out to be a bad day for the market in general.
The modest drop in price for KKR’s shares may have surprised those who have been eagerly anticipating the long-awaited transition from the Euronext, but did come following a strong period for the stock during its final two weeks on the Amsterdam Euronext.
Was I expecting the stock to perform better yesterday? Yes. It was down, but it was down modestly. The whole market was down, so I don’t think it’s a reflection of anything structuralMichael Kim
“I think what we saw yesterday in terms of the stock action was really just more a function of the fact that the stock had had a pretty good run in the last couple of weeks prior to the relisting,” said Sandler O’Neill analyst Michael Kim. “The step up in liquidity, which ultimately I think is favorable for the stock, actually probably worked a little bit against it yesterday in that people who were looking to maybe reduce some of their positions used the step up in liquidity in yesterday’s volume to accomplish that.”
Kim also underscored the fact that the relisting was being inaccurately perceived as an initial public offering.
“I continue to see reports that referenced it as an IPO. It’s not an IPO. It was just a relisting,” he said. “Was I expecting the stock to perform better yesterday? Yes. It was down, but it was down modestly. The whole market was down, so I don’t think it’s a reflection of anything structural.”
In addition to the relisting, KKR announced in early May it would sell additional shares valued at a maximum of $500 million, which Kim added could dilute the price of KKR’s shares. KKR declined to comment on the stock's performance Thursday.