How Unprofitable GoDaddy Can Open $10 Higher

Speaking to Benzinga, O'Neil Securities Director of NYSE Floor Operations Kenny Polcari described how GoDaddy Inc (NYSE: GDDY) could open nearly $10 higher than its original price.

Polcari explained that the company had to meet with institutional investors ahead of the IPO and that those investors must have liked the company's story.

Apparently there was sufficient interest from the institutions that the company could raise the IPO price and still have demand after the stock began trading.

Related Link: Will GoDaddy's IPO Be As Flashy As Its Super Bowl Ads?

Further, with a limited number of shares available at the IPO, some institutions may not have been able to purchase all the shares they wanted, according to Polcari.

Institutional investors that did not get the full allocation of shares, in Polcari's view, may have been buying after the IPO and driving up the price of the stock.

Polcari felt that there was demand for the stock because investors had confidence in whatever GoDaddy planned to do with the proceeds, which may have included paying down the company's debt or financing and expansion.

GoDaddy recently traded at $26.29, up 31.45 percent.

Kevin Riley and Brianna Valleskey contributed to this report.