Shares in Redfin Corp. soared in their stock market debut Friday as investors bet on the residential real estate brokerage’s growth prospects despite a U.S. housing market that’s been hampered by a worsening shortage of properties for sale.
The stock climbed $6.70, or 44.7 percent, to close at $21.70. The gain came against a backdrop of mostly sluggish trading on Wall Street. The major U.S. stock indexes ended mostly lower.
Seattle-based Redfin priced its initial public offering of about 9.2 million shares at $15 each. That was above the maximum offering price of $14 per share that the company listed when it filed plans to go public in June.
“They’re a discount real estate broker with a technology edge, so they’re a disruptor, and growing faster than other brokers in the industry,” said Kathleen Smith, a principal at Renaissance Capital, which manages IPO-focused exchange-traded funds. “And they’re gaining market share, which is what’s interested investors.”
The company, which launched in 2002 and adopted the Redfin name in 2006, provides listings of homes for sale online and via a mobile app where users can search for properties and find information on pricing trends, neighborhood data and other details.
Redfin also employs agents to work with buyers and sellers in more than 80 U.S. markets. The company says it charges most home sellers a commission of 1 percent to 1.5 percent, compared to up to 3 percent charged by traditional brokerages.
While the company’s revenue has been rising, it has booked consecutive annual losses going back to 2014.
For the three months ended in March, Redfin’s loss widened to $28.1 million, compared with a loss of $24.3 million a year earlier. Revenue jumped 44 percent to $59.9 million.
Like other real estate brokerages, Redfin has had to contend with the impact of a housing market that’s been hampered by a stubbornly low inventory of homes for sale.
Despite solid demand in a relatively healthy economy for houses, sales…