One of a slew of recent initial public offerings (IPOs), telemedicine services provider American Well (NYSE:AMWL), did well on Tuesday. Its shares rose by over 8% on the day, easily eclipsing the gains of the wider stock market.
The catalyst for the latest pop seems to be two updates American Well issued about its IPO, one after market hours on Monday, and the other on Tuesday morning.
These revealed that the issue was upsized in both price and volume. Initial investors paid $18 per share, up from the previously anticipated $14 to $16. Just over 47.4 million shares were sold; 35 million was the original plan. Meanwhile, the IPO's underwriters fully exercised their right to buy additional shares (6.2 million, all told).
Finally, American Well said that Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Google has, as agreed, bought a stake in the company for $100 million. This deal, which establishes Alphabet's Google Cloud service as the company's "preferred global cloud platform," gives the tech giant a 2.5% stake in its partner. Alphabet and American Well will also collaborate on the research and development of telemedicine tech.
In short, Amwell's IPO was successful and then some. That's not really surprising, given the understandable popularity of telemedicine stocks such as Teladoc (NYSE:TDOC) in the please-stay-at-home environment of the coronavirus pandemic. Like Teladoc, Amwell is going to be a stock to watch in this segment, particularly given its already large customer base and expansive provider network.