Toast Shares Surge 60% On Debut; Raises $20 Bln

Shares of restaurant software company Toast Inc. (TOST) rallied over 60 percent on its debut on the New York Stock Exchange after the company priced its initial public offering at $40 per share, above the expected range.

The company opened its trading $65.26, raising its market cap to over $32.5 billion. Toast had raised around $870 million through its IPO, pricing shares at $40 each, compared to its previous expected range of $34 to $36, which was up from initial range of $30 to $33.

The restaurant technology firm road to the IPO has been a long and hard one. During the height of the COVID-19 pandemic, the company's revenues was down 80 percent as restaurants all over the country shut shop and there was no business. Toast reduced its workforce by half in the middle of 2020 and also undertook many drastic measures to remain in business.

With the pandemic slowing down, restaurants turned to takeout and outside dining, following all the protocols. This upswing helped Toast as well as its business started picking up. When the company sales started picking up, Toast offered a one-month credit of software fees to its customers and gave them free access to technology that allowed takeout, online ordering and gift card purchases.

In the third quarter, the company's revenues rose came in higher than it was before the pandemic. For all of 2020, revenue rose 24% to $823.1 million. In the second quarter revenue tripled to $424.7 million.

In spite of higher sales, the company's net loss widened to $135.5 million from $53.7 million in the same period last year, driven by increase in sales and marketing expenses.

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