How will the secondary offering size and pricing compare to recent primary offerings in the CRM sector?
Size & pricing context
Klaviyo’s secondary offering will place 6.5 million shares of its Series A common stock on the market, with a 30‑day “greenshoe” option for an additional 975 k shares (≈15 % of the base lot). In the CRM space, the most recent primary equity raises have been considerably larger – e.g., HubSpot’s 2023 follow‑on IPO placed 12 million shares on the market, while Salesforce’s 2022 “growth” secondary tranche floated roughly 10 million shares. Even the modest “growth‑stage” raises of niche B2C‑focused players such as Braze (≈8 M shares in its 2022 primary) still out‑size Klaviyo’s 6.5 M‑share core.
Pricing is where the contrast is sharper. Primary offerings in the CRM sector have typically priced at a 3‑5 % premium to the prior‑day closing price to reward new capital inflow and support the company’s balance sheet. By contrast, secondary offerings are usually discounted 5‑10 % because the proceeds go to existing shareholders, not the company, and the market views the transaction as a liquidity event rather than growth funding. Klaviyo’s underwriters are expected to price the 6.5 M‑share lot at a modest discount to KVYO’s recent closing level (around $1.30‑$1.35), which is tighter than the deeper discounts seen in earlier CRM secondary deals (e.g., Snowflake’s 2022 secondary at ~12 % below the prior close).
Trading implications
- Short‑term pressure: The discounted secondary will likely generate downward pressure on KVYO’s price in the next 1‑2 weeks as the shares trade into the market. Anticipate a 2‑3 % dip on the announcement day, especially if the greenshoe is exercised.
- Liquidity & demand: The offering size is modest relative to sector peers, so the float impact should be limited; any price dip will be quickly absorbed if demand from B2C‑focused investors remains strong.
- Strategic play: For traders with a bullish view on KVYO’s B2C‑CRM niche, the discount creates a potential entry point. A short‑cover or “buy‑the‑dip” strategy at the secondary price could capture upside once the market digests the dilution and the company’s growth narrative resumes.
In short, Klaviyo’s secondary is smaller and priced at a steeper discount than the recent primary CRM offerings, implying short‑term downside risk but also a modestly attractive entry level for risk‑aware, long‑biased traders.