fb-pixel Skip to main content

Amwell rides IPO wave with expanded stock sale

The rising use of telemedicine during the pandemic has put Amwell's business in the spotlight.Jessica Rinaldi/Globe Staff

Taking advantage of a pickup in demand for new stocks, American Well Corp. expanded its initial public offering Wednesday, locking in a price that valued the Boston telehealth technology company at $4.1 billion.

The company, also known as Amwell, said it raised $742 million by selling 41.2 million class A shares at $18 apiece, after increasing the price and number of shares offered. Amwell had planned to sell 35 million shares at $14 to $16 a share, according to a filing last week with the Securities and Exchange Commission.

Google, the Internet search unit of Alphabet Inc., previously agreed to purchase $100 million of class C shares in a private placement at the same time as the IPO.


The company was founded by brothers Ido and Roy Schoenberg in 2006, and they will hold class B shares that will give them 51 percent voting power after the IPO.

Former Massachusetts governor Deval Patrick and Dr. Peter Slavin, president of Massachusetts General Hospital, are directors of the company, and each held options on 352,000 class A shares as of Dec. 31, according to the IPO filing. Those shares are worth $6.3 million at the IPO price.

Amwell, whose products allow health care providers to connect remotely with their patients, priced its IPO on the same day that shares of Snowflake Inc., a California company that helps companies manage data in the cloud, more than doubled on the first day of trading. The stock, priced at $120 a share, ended the day at nearly $254, giving the money-losing company a market value of $70 billion.

This year through Wednesday,176 companies in the United States raised a combined $70.5 billion through IPOs with shares that are now trading, according to Bloomberg data. That compared with 146 deals that brought in $49 billion in the same period in 2019.


The coronavirus pandemic has driven a dramatic increase in the use of telehealth by doctors, mental health professionals, and other caregivers. Amwell said in its IPO prospectus that visits nearly tripled to 2.2 million in the second quarter from the previous three months as restrictions on remote care were eased, but also said “it is uncertain how long the relaxed policies will remain in effect, and there can be no guarantee that once the COVID-19 pandemic is over that such restrictions will not be reinstated or changed in a way that adversely affects our business.”

Telehealth visits in the Northeast declined by about one-third from their peak in April, according to data presented to the Massachusetts Health Policy Commission on Tuesday, and accounted for roughly 10 percent of visits by the end of July.

Amwell’s customers include hospital systems, health insurance plans, and state and federal government agencies. Its revenue was $122.3 million for the six months ended June 30, an increase of 77 percent over the same period a year earlier. Amwell’s net loss widened to $113.4 million from $41.6 million.

Amwell has given its underwriters the option to acquire 6.2 million additional shares of class A common, including 1.7 million class A shares from existing shareholders. The IPO underwriters include Morgan Stanley, Goldman Sachs, and Piper Sandler.

The company’s class A shares are set to begin trading Thursday on the New York Stock Exchange under the symbol AMWL.


Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.