Displaying items by tag: ipo

(New York)

Peloton went public yesterday, and the results were much less than impressive. In its first day of trading, the company saw its shares fall 11%. The company priced shares at $29, but saw them fall throughout the day. The company produces exercise equipment and classes and has a cult following among its customers. Despite the fall though, in some way the IPO is a big success, at least for the founders of the company. In its last private funding round in 2018, it was valued at $4.15 bn, but opened at $7.7 bn yesterday. That is a much better showing than other recent big IPOs.

FINSUM: This company is losing almost $200m per quarter on revenue of less than $1 bn. It is fortunate it did not fall further given the current environment.

(Los Angeles)

In what comes as a really eye-opening turn of events even for someone as outlandish as Masayoshi Son, SoftBank has announced a plan to IPO its $100 bn Vision Fund. The fund is already legendary, having invested $100bn in just two years in some of the world’s biggest startups. It currently holds positions in WeWork and Uber, for instance. Masayoshi Son is now raising for capital for another fund, so wants to access some liquidity from this first one, thus the plan to IPO.

FINSUM: This is a bonkers plan, but honestly, and interesting opportunity for investors to own pieces of some very exclusive private companies. This is like an early stage Berkshire Hathaway.

(New York)

There has been a lot of anger (and even legal action) about the big declines Lyft has seen since its IPO. The questions around publicly traded companies worth tens of billions of Dollars with annual losses of billions of Dollars are only growing more intense as Uber readies for its IPO. The big question is what investors should do about the stocks—stay away or buy in? TrimTabs Asset Management has some very salient thoughts on the issue. TrimTabs specializes in free cash flow oriented products and lent their expertise to this question. They conducted an in-depth study of how post-IPO companies with negative free cash flow, and negatively trending free cash flow, perform versus those with positive FCF. The results were stark, and in all instances showed major outperformance of FCF positive companies. For instance, over a 12-month horizon following IPO, $1 bn+ companies with positive FCF outperformed those with negative FCF by almost 16%, with the latter averaging losses of 6.41%.

FINSUM: This analysis from TrimTabs could not be more timely or insightful. We think it might be smart to stay away from Uber and Lyft until they at least have a clear path to profitability.

(Silicon Valley)

The next couple of years is supposed to be the new golden age of tech IPOs. Huge Silicon Valley unicorns like Uber and Lyft ae supposed to IPO, as are a slew of less well-known, but still big, names. All the activity is supposed to kick off very soon as Lyft has just priced its IPO. The company is seeking a valuation of about $23 bn based on an offering of just over $2 bn of shares. Uber, its rival, is planning to IPO soon as well, and looking for a valuation north of $100 bn.

FINSUM: Let’s put the Lyft valuation in perspective—the company has $2.16 bn of annual revenue, but lost almost a $1 bn in the last year. Quite eye-opening.

(San Francisco)

In what would likely come as the biggest IPO in recent memory, Uber says it is planning for a potential IPO in 2019. Parties close to Uber say that its bankers delivered valuation proposals for an IPO in the range of $120 bn. That is an eye-opening figure because it is almost double the company’s valuation from its most recent funding round 2 months ago. There are no guarantees the company will go public next year, but its CEO has said it is aiming for a public debut in the second half of 2019.

FINSUM: We do not think that valuation is out of the question given how much investor anticipation there might be for this IPO. The IPO market has been red-hot, so nothing seems out of reach.