Gas Exporter Venture Global Stock Stumbles in IPO, but the Industry’s Outlook Is Favorable

Liquid natural gas exporter Venture Global VG made its debut on public markets Friday, in the first major initial public offering since President Donald Trump took office earlier in the week. Market watchers have been looking to the energy giant, which could benefit from a looser regulatory environment for oil and gas under Trump, as an early litmus test of an IPO revival in 2025.

Shares of Venture opened at $24.05 on their first day of trading under the ticker VG on the New York Stock Exchange. That’s slightly lower than VG’s $25 IPO price, which came in the middle of its $23-$27 expected range. The stock climbed as high as $24.90 in afternoon trading on Friday and closed at $24.00, down 4% from the IPO price.

Venture raised $1.75 billion after selling 70 million shares at the offering price on Thursday, according to a statement that valued the company at $60.5 billion. Competitor Cheniere Energy LNG has a market cap of $52 billion. The company initially targeted a valuation of $110 billion (nearly twice its current valuation) through an offering of 50 million shares. The firm revised its plans after investors expressed concern about its earnings potential over the long term, Reuters reported.

Venture reported net income of $756 million over the nine months ending Sept. 30, 2024, on revenue of $3.4 billion, according to a filing. During the same period in 2023, the firm reported net income of $3.6 billion on revenue of $6.3 billion.

A Favorable Environment for LNG

Despite the lackluster performance of VG’s IPO on Friday, there are still tailwinds amid geopolitical disruptions and the recent rollback of regulatory hurdles for the LNG industry, according to Joshua Aguilar, director of resources equity research at Morningstar. “The stars seem to be aligning for LNG exporters like Cheniere in terms of market conditions,” he says.

“Global conflicts allowed Venture to become a much-needed alternative source of fuel in Europe,” Aguilar explains. “This created capital for reinvestment in facilities. Combined with the new US administration’s decision to lift the prior export ban, these factors should help Venture Global in a favorable operating environment.”

Venture said in a recent regulatory filing that it’s developing five natural gas liquefaction and export projects in Louisiana near the Gulf of Mexico. Energy stocks have outperformed the broader market so far this year, with the energy sector up 7.22% since the beginning of January, compared with a 4.33% return for the Morningstar US Market Index.

IPOs Could Energize

Analysts expect the IPO market to heat up in 2025 on the back of strong economic growth, a resilient stock market, and a more favorable environment for corporate dealmaking under the new Trump administration. Venture Global’s debut is the largest IPO since logistics firm Lineage LINE listed last summer, and the largest public debut in the energy sector in more than 10 years, according to Renaissance Capital.