Early investors aren't the only people making mad money on the slam-dunk initial public offering of Shopify Inc.
The investment banks that underwrote the share offering are splitting almost $9.2-million (U.S.) in fees. The commission on the share sale was 7 per cent according to the final prospectus filed Thursday, which is 200 basis points more than Cara Operations Ltd. paid out to its bankers earlier in the year when it went public.
The big winners were the lead bankers, who sold the lion's share of the 7.7 million shares. Morgan Stanley was allocated just over 3 million shares so it will take home about $3.5-million in fees. Credit Suisse, which was a co-lead, was given 1.9 million shares. RBC Dominion Securities Inc. has bragging rights as the only Canadian co-lead on the syndicate but its allocation was only 1.15 million shares, significantly less than its U.S. counterparts.
U.S. investment banks Pacific Crest Securities Inc. and Raymond James & Associates Inc. and Canadian independent Canaccord Genuity Inc. assumed secondary responsibilities as co-managers on the deal. All three banks were allocated 539,000 shares each to sell.
If underwriters exercise their overallotment option – and they likely will – they'll wind up selling up to 1.1 million additional shares and the fees paid out to bankers will rise to $10.5-million.