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charlesarthur : ipo   13

WeWork still needs cash after pulling IPO • WSJ
Eliot Brown:
<p>To cut costs, the company’s new co-CEOs, Sebastian Gunningham and Artie Minson, are planning thousands of job cuts, putting extraneous businesses up for sale and purging some luxuries from the previous CEO, such as a G650ER jet purchased for more than $60m last year, people familiar with the matter have said.

New York-based We had $2.5bn in cash as of June 30. At the current rate of cash burn—about $700m a quarter—it would run out of money some time after the first quarter of 2020, according to Chris Lane, an analyst at Sanford C. Bernstein & Co. Mr. Lane and his colleagues projected in a recent note to clients that We would burn through nearly $10bn in cash between 2019 and 2022, assuming it keeps growing.

Messrs. Gunningham and Minson said in a joint email to We staff last week that they “anticipate difficult decisions ahead.”

“As we look toward a future IPO, we will closely review all aspects of our company with the intention of strengthening our core business and improving our management and operations,” the co-CEOs wrote.

Further adding pressure are agreements We made in a bond offering last year for which it must keep at least $500m of cash, according to S&P Global Ratings, which downgraded We’s bonds last week.</p>

Wow, they're down to their last executive jet. Times are tough. Set an alarm for February, when things are going to be getting frantic there.
wework  ipo 
18 days ago by charlesarthur
WeWork delays IPO after frosty investor response • Reuters
Joshua Franklin, Anirban Sen:
<p>WeWork owner The We Company has postponed its initial public offering (IPO), walking away from preparations to launch it this month after a lackluster response from investors to its plans.

The US office-sharing startup was getting ready to launch an investor road show for its IPO this week before making the last-minute decision on Monday to stand down, people familiar with the matter said.

The company has been under pressure to proceed with the stock market flotation to secure funding for its operations.

In the run-up to the launch of its IPO, We Company has faced concerns about its corporate governance standards, as well as the sustainability of its business model, which relies on a mix of long-term liabilities and short-term revenue, and how such a model would weather an economic downturn…

…Were We Company to have pressed on with the IPO at such a low valuation, it would have represented a major turning point in the growth over the last decade of the venture capital industry, which has led to the rise of startups such as Uber Technologies Inc (UBER.N), Snap Inc (SNAP.N) and Airbnb Inc.

It would have meant that We Company would be valued at less than the $12.8bn in equity it has raised since it was founded in 2010, according to data provider Crunchbase. And it would have been a blow to its biggest backer, Japan’s SoftBank Group Corp, at a time when it is trying to amass $108bn from investors for its second Vision Fund.</p>

"No plan survives contact with the enemy."
wework  ipo 
4 weeks ago by charlesarthur
Uber's losses reach double digits in IPO debut debacle • Yahoo
Jeran Wittenstein and Sam Unsted:
<p>The ride-hailing giant dropped as much as 11% to $37.08 in New York. The San Francisco-based company sold 180 million shares at $45 apiece on Thursday, and on Friday it never traded above that price, ending the day down 7.6% at $41.57 even as other stocks gained.

“Sentiment does not change overnight, and I expect some tough public market times over the coming months,” CEO Dara Khosrowshahi told staff in an email.

The share slump reflects investor skepticism about the size of the ride-hailing market, Uber’s ability to execute on food and package delivery and its push into autonomous vehicles, said Ygal Arounian of Wedbush Securities. The IPO also comes as investors shy away from riskier assets given U.S.-China trade tensions, said the analyst, who has an outperform rating on Uber and sees the stock reaching $65 in the next year.</p>

I link to this only to note it; I don't think the first few days or weeks are anything either way. What's going to matter is its financial results, and that's going to play out over years. (Has anyone analysed how a company's shares perform on its first day compared to how it performs over its life?)
uber  ipo 
may 2019 by charlesarthur
The Uber IPO is a moral stain on Silicon Valley • NY Times
Farhad Manjoo:
<p>Uber — and to a lesser extent, its competitor Lyft — has indeed turned out to be a poster child for Silicon Valley’s messianic vision, but not in a way that should make anyone in this industry proud. Uber’s is likely to be the biggest tech I.P.O. since Facebook’s. It will turn a handful of people into millionaires and billionaires. But the gains for everyone else — for drivers, for the environment, for the world — remain in doubt. There’s a lesson here: If Uber is really the best that Silicon Valley can do, America desperately needs to find a better way to fund groundbreaking new ideas.

Today’s Uber is more responsible than yesterday’s: Travis Kalanick, Uber’s onetime Night King, was ousted as chief executive in 2017, and Dara Khosrowshahi, its new chief, has led a thorough rehabilitation. Yet Uber’s early insiders paid no real price for their sins. Mr. Kalanick’s stake will be worth nearly $9bn. Tech giants — including Apple, Google and Jeff Bezos, who all acquired significant stakes in Uber — will make a killing. Saudi Arabian petromonarchs will too.

Not Uber’s drivers. Recent studies show that Uber drivers make poverty wages — about $10 an hour after their vehicle expenses are deducted from their pay. Drivers’ fortunes might only worsen after the company goes public. Uber lost nearly $2bn in 2018, and the best long-term hope for Uber’s business is that drivers disappear altogether, replaced by cars that drive themselves. In rushed pursuit of that profitable vision, one of Uber’s self-driving cars killed a pedestrian last year.

The environmental gains have also yet to materialize.</p>
Uber  ipo 
may 2019 by charlesarthur
WeWork files for IPO...which is funny all by itself • Dealbreaker
Thornton McEnery:
<p>Every time we've learned anything about WeWork, it looks more and more like the company is a financial sandcastle built on a rainy day using sand that SoftBank bought at a 500% markup. We know we like to make a big deal here about spending more than you make, but we sometimes get the urge to give WeWork a pass, because it spends sooooo much more than it makes and then creates nonsense accounting principles out of thin air to justify said drunken sailor budgeting decisions. WeWork is so brazenly full of shit about so many things that we legitimately respect the company at this point. After all, how can you not kind of love a real estate arbitrage plan that has spent so much time cosplaying up as a tech unicorn that it has staked claim to new frontiers in the exploration of affected tech pomposity? 

The release of the WeWork S-1 is going to be something of a secular holiday at Dealbreaker HQ. We look forward to waking up late, eating a reasonably strong THC edible to prepare our minds properly and then digging into the document, reading line after line composed with the single objective of pretending that "The We Company" is indeed a $70bn revolution in modern living and not just a wildly overvalued machine powered by its founder and CEO passing money between his own hands with such speed and force that he has somehow created the financial accounting equivalent of cold fusion.

Man, this IPO is gonna be a rocket.</p>

"Dude, are you one of the dragons in Game of Thrones because you burnt that one to a crisp".
wework  ipo  magicleap 
april 2019 by charlesarthur
Pinterest readies itself for early 2019 IPO • WSJ
Maureen Farrell:
<p>Pinterest Inc. is actively preparing for an IPO that could come as soon as April, according to people familiar with the company’s plans, the latest in a line of tech companies ramping up plans to go public.

Pinterest has told bankers it could choose its slate of underwriters to run the initial-public-offering process as soon as January, these people said. It could achieve a valuation in the public market at or in excess of $12 billion—the level at which it most recently raised funding, some of the people said. Valuations can change until a company prices its initial public offering.

In September, Pinterest surpassed more than 250 million monthly active users, who visit the site to browse through billions of images on topics ranging from living-room furniture to dinner recipes and tattoos. The company generates revenue from ads scattered across its site and is poised to generate revenue in excess of $700m this year, up 50% from the prior year, according to a person familiar with the matter.</p>

With revenues like that, it might even be making a profit. How soon before we hear it has been taken over by Nazis and pornographers?
pinterest  ipo 
december 2018 by charlesarthur
Sonos aims to raise up to $264m in IPO • Financial Times
Tim Bradshaw and Nicole Bullock:
<p>Initial pricing details released in an updated filing on Monday, as the company kicked off its roadshow in New York, suggest Sonos itself could raise up to $105.6m, while selling stockholders will receive up to $158.3m in proceeds. KKR, the company’s largest shareholder, is selling only a small portion of its holding. 

Sonos said it expected to sell shares at $17-$19, although that price could change as it makes its pitch to Wall Street investors in the coming days, ahead of a likely market debut in August. On a fully diluted basis, at the midpoint of the current pricing range, that would leave Sonos’s valuation above $2bn but below the $2.5bn-$3bn range it was said to have been targeting as it readied for and IPO earlier this year.

When it published its full prospectus earlier this month, Sonos revealed it had 18 per cent revenue growth in the six months to March, up from 10 per cent in the financial year ending in September 2017. 

Alongside Netgear’s planned spin-off of its internet-connected security camera business Arlo, Sonos will be a test of investors’ appetite for consumer electronics businesses. Previous US flotations, such as Fitbit and GoPro, have performed poorly, although Roku, the TV streaming technology company, has fared better in recent months. </p>

August is an interesting time to IPO. Market quiet (in theory). More to the point, none of the big companies will have announced results - or new hardware. That's the way to get the shares moving.
sonos  ipo 
july 2018 by charlesarthur
Xiaomi shows off scorching growth ahead of $10bn IPO • Bloomberg
<p>The Chinese smartphone maker filed for an IPO in Hong Kong Thursday, kicking off a process that’s expected to raise at least $10bn and confer a value of $100bn on the eight-year-old company. That offered investors a glimpse into the inner workings of the company controlled by billionaire Lei Jun, and its ups-and-downs since almost dropping off the radar in 2016…

…Xiaomi, reporting detailed financials for the first time, posted a net loss of 43.9bn yuan in 2017, reversing from a meager profit a year earlier. Some of that however reflected one-time items such as share-based compensation and changes in the value of preferred shares, the company said in its filing. Excluding those, operating profit reached 12.2bn yuan.

The company is taking advantage of changes by Hong Kong that allowed companies with different share classes to list. The filing didn’t mention how much it’s looking to raise, with the number of shares and price among details redacted from the document. It’s a big win for Hong Kong Exchanges & Clearing Ltd., whose officials spent years pushing to scrap a ban on the weighted voting rights that give founders control even with minority ownership. Xiaomi’s decision, four years after Alibaba Group Holding Ltd. chose New York, signals a new phase for the city’s ambitions to rival the U.S. market.

“Investors will like Xiaomi’s business model because growing user numbers guarantee profits in the future,” said James Yan, an analyst at Counterpoint. “A bigger hardware user base will translate to stronger profitability from services and at the ecosystem end.”</p>

Lots of detail in this: 40% of its smartphone sales from outside China in 2017. (That will be mostly India.) It's doing OK, especially given how it stumbled in 2016.
xiaomi  ipo 
may 2018 by charlesarthur
Sonos prepares for IPO as soon as June • WSJ
Maureen Farrell:
<p>Sonos has raised about $110m in primary funding from investors, including Index Ventures and KKR & Co. Last fall, the company’s chief executive, Patrick Spence, told The Wall Street Journal that its 2017 revenue was on track to cross $1bn, helped by sales of its $699 Playbase, a wireless speaker for TVs.

Sonos, which would likely look to raise several hundred million dollars in proceeds from the IPO, would have a market value of about $2.5bn to $3bn, a person familiar with the deal said. Still, pricing can typically change up until the night before an IPO begins trading.

Sonos’s likely near-term offering is expected to take place as the IPO market, particularly for technology companies, is heating up after a streak of weak issuance. For years, U.S. tech companies increasingly sought private capital or sold themselves to competitors or private-equity firms in lieu of trying to raise capital from public investors.

This week, five companies, including electronic-signature technology company DocuSign Inc., are set to debut. Many companies that have gone public this year or are in the planning stages have existed for more than a decade—DocuSign, for example, was started in 2003, and Sonos was founded in 2002.</p>

That's a long, long path to an IPO. And through it all, Sonos hasn't truly added anything to what it does. It had multi-room from the start; it has offered more and more streaming services, but that's because more and more have come online. So why now? Perhaps the appetite for hardware IPOs is greater than it was. Or Sonos is running out of some sort of runway.
sonos  ipo 
april 2018 by charlesarthur
Spotify’s stock falls from $165.90 opening price • The Washington Post
Hamza Shaban and Renae Merle:
<p>Spotify made its highly anticipated Wall Street debut on Tuesday, with an opening price of $165.90, giving the music streaming company a valuation of $29.5 billion.

The price was 25% more than the reference price set by the New York Stock Exchange, based on how the stock traded on private markets before public trading began.

During the first moments of its public listing, Spotify's stock experienced stable trading before falling more than 9% in the afternoon, to $150. Analysts had anticipated volatility during Spotify's market debut because the company chose an unusual path to go public.

The streaming service giant, which trades under the symbol SPOT, bypassed many of the traditional steps of a Wall Street public offering. Company executives did not conduct a roadshow to convince big institutional investors, such as pension and mutual funds, to buy shares. Its chief executive even skipped the usual New York Stock Exchange ritual of ringing the opening bell. Epic Players, a theater group, preformed the honors.

What made Spotify's public debut most notable, however, was how it offered its stock. Rather than issuing new shares, Spotify instead conducted a direct listing, in which no money was raised but existing shares were sold by employees and investors.

"Normally, companies ring bells. Normally, companies spend their day doing interviews on the trading floor touting why their stock is a good investment," Daniel Ek, Spotify's founder and chief executive <a href="">said in a blog post</a> Monday. "As I mentioned during our Investor Day, our focus isn’t on the initial splash. Instead, we will be working on trying to build, plan, and imagine for the long term."</p>

And so Spotify gets out of its tight spot with <a href="">$1bn of debt raised in March 2016 that it had to pay off</a>. Well played, Mr Ek.

Though some of the earlier investors might feel peeved. From that March 2016 WSJ story:
<p>Fidelity Investments held its Spotify shares at $1,643 a share in January, down 27% from last August, according to regulatory filings. Another mutual fund, Vanguard International Growth, paid $2,229 a share for a stake in Spotify and still held it at that price as of December.</p>
spotify  debt  ipo 
april 2018 by charlesarthur
Mobiles to Americans? That's not the only thing Xiaomi's selling • Bloomberg Gadfly
Tim Culpan:
<p>Xiaomi's plan [to sell phones in the US] is as much about selling shares in its forthcoming IPO as it is about selling handsets to Americans.

Talk of a $100bn valuation for the Chinese startup would make it vastly overvalued. That doesn't mean bankers won't try to help it reach such lofty heights, or that Chinese investors won't pay through the roof to bag some shares. However to get there, Xiaomi's leadership, financial boffins and marketing teams all need to keep kicking the can down the road.

The story for 2017 was about the company's turnaround, from a slump in 2015 to a rebound in 2016 and continued momentum last year. India was the main engine, and we can expect more of that noise over the coming 12 months. But Xiaomi needs another booster rocket if it's to go to the moon like everybody hopes. Hence the talk of a U.S. entry, where growth in the most recent quarter was much faster than for Asia when measured in revenue terms.

And note the timing: end of this year or early next. That would be after Xiaomi's IPO, providing a great talking point for bankers while not requiring them to demonstrate any actual success.</p>
flotation  xiaomi  ipo 
march 2018 by charlesarthur
Dell says it will explore IPO or merger with VMWare • Reuters
Liana Baker and Sonam Rai:
<p>Dell, the world’s largest privately held technology company, is under pressure to boost profitability after its debt-laden acquisition of data storage provider EMC Corp for $67bn in 2016 failed to meet financial targets, hurt by intensifying price competition.

Combining with VMware would provide access to VMWare’s $11.6bn in cash, helping Dell trim its $52.5bn debt pile. Last month’s US tax reform made servicing that debt more expensive due to caps on deducting interest expense.

The combination would also make Dell a publicly listed company, offering a path for private equity firm Silver Lake to begin selling down its 18% stake if it chooses to. Silver Lake helped bankroll Dell CEO Michael Dell in taking the company private in 2013 in a $24.9bn leveraged buyout.</p>
dell  ipo 
february 2018 by charlesarthur
Spotify finally readies an IPO...that’s not an IPO • WSJ
Maureen Farrell and Telis Demos:
<p>Music-streaming service Spotify AB is readying an initial public offering that is expected by year-end. The rub is this: It may not really be an IPO.

Spotify is seriously considering a direct listing, in which the company would simply register its shares on a public exchange and let them trade freely, according to people familiar with the matter. The company wouldn’t raise any new money or use underwriters to place new blocks of stock.

That would mark a departure from the typical IPO, in which new investors buy shares from the company or its early investors, or both, the night before they start trading. The initial price is set by underwriters following extensive meetings with potential new investors.

In a direct listing, investors purchase shares in the open market after they are listed. The price is set organically based on supply and demand. Spotify, which has raised more than $1bn in equity, was last valued privately at $8.5bn in June 2015. The Swedish company is targeting a public valuation of more than $10bn, the people said. The 10-year-old company may list its shares on a U.S. exchange as early as September.</p>

You're wondering why. Here's why:
<p>the company could avoid the first-day trading pop that characterizes many IPOs shepherded by underwriters. They are good for some investors but also indicate a company left money on the table.</p>

Spotify needs all the money it can get, rather than letting underwriters grab it; and all the babble in the article about "increased volatility" is utterly irrelevant, because once the share is sold by Spotify it has the money. What the share price does after that is someone else's problem. (OK, partly Spotify's when it wants to sell more shares in the future. But mostly the new share owner's.)

Going public like this also gets it out from under the $1bn debt burden it took on last year.
spotify  ipo 
april 2017 by charlesarthur

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