GRAYBAR ELECTRIC CO INC IPO – What You Need to Know

Hey there! If you’re thinking about investing in Graybar Electric’s IPO, here’s the lowdown in plain English. No jargon, just the stuff that matters.

1. What does Graybar Electric actually do?

Graybar is a massive distributor of electrical and tech equipment. They act as a middleman, buying products like wires, cables, lighting, and smart building systems from manufacturers and selling them to businesses. Their customers include contractors, factories, utility companies, and government agencies—basically anyone building or upgrading physical infrastructure.

Key products they sell:

• Basics: Wires, cables, LED lighting, safety gear
• Tech: Data center cables, internet equipment, smart building controls
• Construction: Conduit (metal tubes for wires), electrical boxes, fasteners
• Industrial: Factory automation tools, machinery repair parts

Think of them as a specialized hardware store for professionals.

2. How do they make money? Are they growing?

Graybar buys products in bulk and sells them at a markup. They’ve been around since 1869, so they’re stable, but they’re also expanding into renewable energy (like solar panels and EV chargers) and smart building tech.

What we know about their finances:

• The company reported $648.4 million and $690.4 million in operational metrics, but didn’t clarify what these numbers represent.
• Revenue is growing slowly, but profits are slim due to heavy competition.
• The company didn’t provide much detail about their financial health in their filing.

3. What will they do with IPO cash?

Graybar aims to raise $42 million by selling 2.1 million shares at $20 each. Here’s where the money could go:

• Refill cash reserves: They spent $12.36 million buying back shares from employees earlier in 2025.
• Pay down debt: They have a $750 million credit line (unused recently), but the IPO money might help with other debts.
• Expand warehouses and improve online services to compete with giants like Amazon Business.

Watch out for:

• If shares go unsold, Graybar gets less cash (e.g., $200,000 less for every 10,000 unsold shares).
• Some buyers may pay in installments, delaying Graybar’s access to funds.

4. Main risks to watch out for

• Construction slowdowns: Their business depends heavily on building activity.
• Big competitors: Home Depot’s Pro division and Amazon Business are squeezing profit margins.
• Employee stock plans: Employees and retirees can buy up to 8 million shares at $20 each through 2027. This could flood the market with shares, potentially lowering the stock price.
• You have no real power: A small group of trustees (including the CEO) control 83% of voting power until 2027. Regular investors get dividends but no say in company decisions.

5. The fine print

• Some states require buying shares through Huntleigh Securities Corporation, Graybar’s financial advisor.
• Contact Matthew W. Geekie, Graybar’s legal head, with questions: (314) 573-9200 or matthew.geekie@graybar.com.

Bottom line: Graybar is a stable, century-old business with a niche in electrical supplies. But it’s a tough industry with thin profits, limited investor control, and risks from employee stock plans. The company provided limited details in their IPO filing, which might be a red flag if you value transparency.

If you’re comfortable betting on construction trends and don’t mind being a passive investor, this might fit your portfolio. Otherwise, tread carefully.