Planet Fitness has gone public. The company's long-expected Initial Public Offering began Thursday, trading on the New York Stock Exchange with a starting price of $16 a share.
The company is looking to grow, and quickly - right now Planet Fitness has just over 1,000 locations, but it says it sees the potential for more than 4,000 in the future. But while the company’s profits have grown along with its footprint, so has its debt, to the tune of $500 million.
Thursday's initial public offering, putting the company's stock up on the New York Stock Exchange, could help fund such expansion. However, Bob Sanders of the New Hampshire Business Review, speaking on NHPR's The Exchange Friday, said the money raised in the IPO is likely to go to investors first rather than to adding new locations.
Meanwhile, the company may also run into other obstacles as it looks to grow. Industry analyst Sara Turk of IBISWorld, Inc., says more and more low-cost gyms are looking to court the same consumers Planet Fitness has gone after for years - “tapping into a customer that is budget conscious and may not be utilizing the gym that frequently,” Turk says.
Along with adding more locations, Planet Fitness plans to raise more money by moving more of its 7 million members from $10 a month basic accounts to upgraded memberships at a monthly cost of about $20.
Ahead of its IPO, Planet Fitness said it would move company headquarters out of New Hampshire if the state didn’t cut taxes on companies that go public. Governor Maggie Hassan vetoed such a measure in June, but offered to restore the cut as part of a new budget plan last month.
CEO Chris Rondeau told the New Hampshire Union Leader that Planet Fitness that "right now there is no plan to move," though he added "we'll have to see" what happens in state government.