By Niket Nishant
(Reuters) -Republican Party's top bank, Chain Bridge Bancorp (NASDAQ:BDGE_old), was valued at $138 million after its shares fell 2% in their NYSE debut on Friday, marking a grim start to its stint as a public company.
The IPO was relatively rare from the banking industry, coming at a time when the market has been dominated by entrants from the technology and biotech space.
While some analysts had lauded timing the IPO just a month ahead of the presidential election, the lukewarm reception highlights the challenges of attracting investors to a less recognizable conservative-leaning brand.
"An increasing number of issuers have explicitly positioned themselves as conservative alternatives to major incumbent businesses," said Angelo Bochanis, data and index associate at Renaissance Capital, citing firms like Trump Media & Technology Group and Rumble.
"However, Chain Bridge isn’t consumer-facing in the same way that many of these names are."
Chain Bridge's fortunes are closely tied to the Republican Party, with the bank warning in its paperwork that any negative event impacting the party could lead to significant deposit outflows.
"Chain Bridge is an economic enterprise, but the principal risks are non-economic," said Joe Endoso, CEO of private investment platform Linqto.
Still, Endoso said the stock may trade well later, given its potential appeal to Republican retail investors and its strong asset quality.
"They're targeting a group of people that are not just making an investment, but making a statement. And it's not a bad business," he said.
Chain Bridge has had 12 years of no non-performing loans, at a time when worries about potential borrower defaults have battered many players in the banking industry.
The McLean, Virginia-based bank was founded by Peter Fitzgerald, the former Republican U.S. Senator from Illinois. He retired in 2005 and was succeeded to the Senate seat by former U.S. President Barack Obama.
With just one branch and 84 employees, it has beaten bigger financial rivals to become a must-have partner for political work. It has worked with the campaign of every Republican Party presidential nominee since John McCain in 2008.
The bank's stock opened flat at $22 per share, before falling to $21.57. It had raised $40.7 million in its IPO on Thursday, pricing shares at $22, below the $24 to $26 range it initially targeted.