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>>> SmileDirectClub Sinks From IPO in a First Since ’08 Crisis
Bloomberg
By Drew Singer
September 12, 2019
https://www.bloomberg.com/news/articles/2019-09-12/smiledirectclub-falls-from-ipo-price-in-a-first-since-08-crisis?srnd=premium
SmileDirectClub Inc. shares sank 28% from their initial public offering price in Thursday’s debut, becoming the first U.S. firm since at least 2008 to raise more than $1 billion and price its IPO above range, yet sink in its opening trades.
With other mega-IPOs like Peloton Interactive Inc. and The We Co. looming, SmileDirectClub provides the first test in months on whether IPO investors will endorse a large, unprofitable firm surrounded by buzz despite a broader rotation into value trades. The maker of alternatives to dental braces raised $1.35 billion in this year’s fifth-largest IPO, which priced Wednesday night above its indicated range. The stock joins Uber Technologies Inc. -- which priced within its indicated range -- as the only 2019 debut above $1 billion to open lower.
SmileDirectClub sank 28% in its trading debut
SmileDirectClub was the first to U.S. listing to raise at least $1 billion since Chewy Inc. on June 13, but at least three more are expected in the coming weeks. CloudFlare Inc. is scheduled to debut Friday, Peloton on Sept. 26 and WeWork possibly by the end of this month.
The company sold 58.5 million Class A shares on Wednesday for $23 each, above the $19 to $22 offering range. The deal valued the company at about $8.9 billion based on the outstanding shares as listed in its filings with the U.S. Securities and Exchange Commission.
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>>> SmileDirectClub Raises $1.3 Billion in Above-Range IPO
Bloomberg
By Crystal Tse
September 11, 2019
https://www.bloomberg.com/news/articles/2019-09-11/smiledirectclub-is-said-to-raise-1-3-billion-in-above-range-ipo?srnd=premium
SmileDirectClub Inc. raised $1.35 billion after pricing shares above its targeted range in the fifth-biggest U.S. initial public offering of the year.
The maker of alternatives to dental braces sold 58.5 million Class A shares on Wednesday for $23 each, according to a statement. SmileDirectClub had offered the shares for $19 to $22 each.
The listing values the company at about $8.9 billion based on the outstanding shares as listed in its filings with the U.S. Securities and Exchange Commission.
SmileDirectClub’s offering is the biggest in the U.S. since May, when Uber Technologies Inc. raised $8.1 billion in its IPO. It’s one of only seven U.S. listings topping $1 billion and the first to do so since pet supply company Chewy Inc. raised $1.02 billion in June.
The listing by SmileDirectClub could could set the tone for IPOs expected this fall. Those planned offerings include exercise company Peloton Interactive Inc., which filed on Tuesday to raise up to $1.16 billion, and WeWork, the office-sharing company whose IPO plans have been beset by doubts among potential investors and its largest backer, SoftBank Group Corp. and its affiliates.
SmileDirectClub lost $32 million on revenue of $196 million for the three months ended June 30, according to its filing. That compared with a loss of $14 million on revenue of $107 million for the same period a year earlier.
The offering was led by JPMorgan Chase & Co. and Citigroup Inc. The shares are expected to begin trading Thursday on the Nasdaq Global Select Market under the symbol SDC.
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>>> Beyond Meat at risk as competitors like Impossible Burger take root
MarketWatch
By Tonya Garcia
June 18, 2019
https://www.marketwatch.com/story/beyond-meat-at-risk-as-competitors-like-impossible-burger-take-root-2019-06-12
Analysts are starting to pull back from Beyond Meat
Investors want another helping of Beyond Meat Inc. stock, with shares up another 12.6% in Wednesday trading, but competition in the plant-based and meat-alternative categories could take a bite out Beyond Meat’s stratospheric growth.
Since going public last month, Beyond Meat’s BYND, +1.99% stock was up 158.5% as of Tuesday’s close and has hit the “short-squeeze trifecta” as lending fees continue to go higher.
But Beyond Meat isn’t the only plant-based meat on the market, and it’s facing risks from the competition.
According to data provided by SEMrush, a content-marketing platform, for the year spanning April 2018 to April 2019, “Impossible Burger,” another plant-based burger option from Impossible Foods Inc., was searched on Google an average of 171% more than “Beyond Burger.”
And just as talk about the Beyond Meat IPO was picking up steam in April, “Impossible Burger” was searched 400% more than “Beyond Burger.” Beyond Meat began trading on May 2.
“Based on our search volume data, it is clear that the Impossible Burger is much more popular among consumers than the Beyond Meat burger,” said Olga Andrienko, head of global marketing at SEMrush. “While search volume cannot determine causation, the significant difference in consumer interest for one of its main competitors, the Impossible Burger, points to a larger long-term risk for Beyond Meat in addition to its recent losses on Wall Street.”
Beyond Meat stock is up 78% for the past month while the S&P 500 index SPX, is about breakeven for the period.
On Thursday, meat producer Tyson Foods Inc. TSN, entered the alternative protein market, as it unveiled new products under the Raised & Rooted brand, including plant-based nuggets and blended burgers made with a combination of meat and plants.
Impossible Foods said it welcomes Beyond Meat into the meat-alternative fray because Impossible Foods only has one competitor: animal protein.
“Our competition 100% is the cow,” said Rachel Konrad, chief communications officer at Impossible Foods. “Impossible Foods has the mission of eliminating the need for animal products.”
In the meantime, it’s generating millions of dollars in funding from investors and getting play on fast-food menus across the country.
On May 14, Impossible Foods, which is privately held, announced it completed a $300-million round of funding, bringing total funding to $750 million. Investors include Jay-Z, Serena Williams and husband Alexis Ohanian, Katy Perry and Questlove, as well as Bill Gates, UBS and Google Ventures.
Since January, Impossible Foods products have popped up on menus at chains such as White Castle, Red Robin Gourmet Burgers Inc. RRGB, -0.54% , Qdoba and Little Caesars, where the Impossible Supreme pizza, featuring Impossible Sausage, is available in three markets in Washington, New Mexico and Florida.
In total, Impossible Foods is on 9,000 menus in the U.S., Hong Kong, Singapore and Macau.
The company caused big buzz with the addition of the Impossible Whopper to the Burger King menu. Burger King is part of the Restaurant Brands International Inc. QSR, +0.75% portfolio.
Data from Earnest Research, a business insight company, shows a 36% spike in April sales versus March at St. Louis Burger King locations since the addition of the Impossible Whopper, with only a portion explained by the $1 increase in price.
Impossible Foods’ Konrad emphasized the versatility of Impossible Foods products, and its ability to make the leap from pizza to burgers to Vietnamese pho and Italian Bolognese without sacrificing taste, the number one thing that diners who aren’t vegan or vegetarian are looking for in a meat alternative.
“If you don’t have a product that’s just as delicious and craveable as meat from cows you’re not even allowed to play in this space,” she told MarketWatch.
Konrad also talked up the science behind Impossible Foods, a factor that’s highlighted on the company’s website and has been talked up by others in the meat-alternative industry, which is now also populated by animal protein purveyors like Tyson Foods Inc. TSN, +0.89% In many ways, the plant-based meat company with the best science will win.
“Let’s really end the fantasy that our food is untouched by science,” she said. “It’s the ultimate science product.
Among the more than 100 scientists working with Impossible Foods are molecular biochemists, geneticist, and a nuclear physicist who was responsible for the texture and “chew down” of the Impossible Burger.
Beyond Meat certainly isn’t standing still, with the company announcing a new, “meatier” burger coming for summer.
With the meat industry valued at about $1 trillion, there’s plenty of room for growth, and customers are seeking out animal alternatives for a variety of reasons, from health to environmental concerns. Other plant-based meat companies facing off in the space include Before the Butcher; Rebellyous Foods, makers of plant-based chicken nuggets; and Good Catch, makers of plant-based tuna.
“Differences between the plethora of companies offering plant-based meat products are mainly reflected in their varied taste and composition,” said Isaac Thomas, chief executive of VeganNation, an organization that brings together businesses, diners and organizations for vegan goods.
“We are on a race for the best vegan meat substitute, and Beyond Meat serves as an important catalyst in promoting plant-based meat products. Beyond Meat’s glorious IPO is attracting a lot of necessary and healthy competition, shining a beam of light on the immense financial opportunity stored in the vegan consumer base while drawing the attention of key financial players worldwide.”
Still, analysts are starting to back away from Beyond Meat, with JPMorgan and Bernstein downgrading the stock this week.
“As we wrote last week, ‘At some point, the extraordinary revenue and profit potential embedded in [Beyond Meat]...will be priced in’ — we think this day has arrived,” JPMorgan wrote.
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>>> Beyond Meat Fever Turns the Tiny Pea Into America’s Hot New Crop
Bloomberg
By Michael Hirtzer and Lydia Mulvany
July 3, 2019
https://www.bloomberg.com/news/articles/2019-07-03/beyond-meat-fever-turns-the-tiny-pea-into-america-s-hot-new-crop
Even ‘traditional meat guys’ are planting more of the legume
Growers in the U.S. and Canada set to seed 20% more peas
There is, it would seem, nothing but bleak news in U.S. farm country. Soybean prices are down. Corn is also still way below its highs, as is wheat. Then there’s the trade war with China, which has cost farmers access to one of their biggest markets, and the non-stop spring rains, which inundated fields.
But there is one bright spot: the pea. Long an afterthought for most farmers -- largely just something planted to help with crop rotations -- the tiny legume has suddenly gotten pulled into the alt-protein craze fueled by the likes of Beyond Meat Inc. and the Impossible Burger.
Prices are moving higher, buoyed as well by rising demand from pet-food makers, and growers in the U.S. and Canada are now rushing to put more peas in the ground. Even those who are a bit put off by the whole vegetarian movement that’s driving the demand. Like Tony Fast. Beyond Meat’s goal of helping wean humans off meat consumption “does not interest me at all,” Fast says. “I am a traditional meat guy and pro-rancher.”
But with demand flat for the crops he’s been planting for years -- alfalfa for use in livestock feed and wheat -- Fast has turned to peas as a possible growth market. At his farm in northeastern Montana, the top U.S. pea growing state, he increased his plantings of the legume by about 20% to total 1,800 acres this season. Next year, he might sow 2,000 acres.
“At the beginning we didn’t see it as a money maker -- it just made the farm more sustainable,” Fast said by phone. But that’s changing now with his peas fetching close to $5 a bushel, up from about $2.80 a few years ago, which was roughly a break-even price. “I am excited for new markets for the peas.”
Alternative Crops
Part of the excitement comes after tariffs from India had clobbered the market. Prices for peas aren’t as transparent as say corn, where futures set a global benchmark, but many growers report they weren’t making much money from the legume. Still, the story the was the same for many staple crops, where excess supplies forced growers to look for alternatives.
So now whether they like the vegan burgers or not, North American farmers are boosting plantings. Growers in Canada and the U.S. are expected to seed about 20% more field peas this year, government data show. That’s happening even as U.S. farmers cut acres of principal crops including corn, soy and wheat by about 3%.
Opening Of The Beyond Meat Manhattan Beach Project Innovation Center -
Sandwiches made with Beyond Meat breakfast sausage
Plant-based companies have been around for decades, but products were aimed at vegans and vegetarians, a tiny market, according to Greg Wank, food and beverage lead at New York-based accounting and consulting firm Anchin, Block & Anchin LLP. Now that even meat-eating consumers are trying to get more of their protein from alternative sources, demand is taking off, underscoring the blistering debut of Beyond Meat. The shares are up about 500% since they started trading in May.
“It’s the right place and the right time,” Wank said.
To be sure, the market for pea crops is by no means as hot as the plant-protein stock. India’s tariffs have been in place for more than a year amid a global glut that’s kept a lid on prices. It’s also a tiny share of U.S. agriculture compared with mammoth crops like corn or soy. But the trade tensions have also forced the development of more processing capacity in North America.
In Saskatchewan, Oscar winner James Cameron announced an investment in Vanscoy-based pulse processing plant Verdient Foods, which U.S. ingredient maker Ingredion Inc. has also partnered with. In Manitoba, France-based nutrition company Roquette is building a pea protein plant that’s set to open next year. The company already operates a pea-protein plant in Vic-sur-Aisne, France, and has a supply agreement in place with Beyond Meat for this year.
Meanwhile, incessant rains in the U.S. meant not all farmers were able to get peas in the ground even if they wanted to.
Foiled Plantings
Jordan Carlson, 35, farms 3,500 acres with his dad near Gothenburg, Nebraska. He didn’t plant any peas for the first time in 10 years because of the deluge, and he’s predicting there could be some local shortages.
Even with India’s tariffs “the demand in food products is fairly high, and that’s keeping us from sinking on the price completely,” he said.
Some farmers are ready to welcome the changes that are ushering in that growth in demand. Even U.S. Agriculture Secretary Sonny Perdue, a self-declared meat eater, wasn’t immune to the lure of a vegan burger on a recent visit to the Impossible Foods Inc. headquarters, where he said the company’s signature offering tasted “very good.”
“I’m excited about things like Beyond Meat and Impossible Burger that are putting pea protein in their burgers. It’s awesome,” said Paul Kanning, who grows yellow edible field peas in Flaxville, Montana. Kanning didn’t increase his pea acreage this season, but if consumer interest is strong, he’ll consider it for next year.
“The demand is going to do nothing but increase, I believe, and you will see production increase in various areas of the U.S.,” he said.
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>>> Beyond Meat's Rally Mean Shorts Are Down $534 Million Since IPO
Bloomberg
By Cristin Flanagan and Janet Freund
June 17, 2019
https://www.bloomberg.com/news/articles/2019-06-17/beyond-meat-shorts-feel-the-heat-as-summer-barbecue-season-looms?srnd=premium
Investors Like What They See in Beyond Meat's First Public Earnings Report
Beyond Meat Inc. shares are on the rise again and short sellers are feeling the burn to the tune of half a billion dollars.
Short sellers are down $534 million in mark-to-market losses since Beyond Meat’s initial public offering last month, Ihor Dusaniwsky, managing director of predictive analytics at financial analytics firm S3 Partners, said in a message. Bearish bets in the faux meat company are at $799 million with 5.3 million shares shorted, according to S3 data.
With the stock up 11.4% in late morning trading Monday, short sellers are left more than $70 million in the red today alone, Dusaniwsky said.
Makers of real meat, like Tyson Foods Inc. and Pilgrim’s Pride Corp., are also getting burned as summer barbecue season gets underway this week and Beyond Meat kicks off sales of its “Beyond Beef” plant product meant that’s meant to look like ground beef.
Tyson shares slipped as much as 3.7% intraday while Pilgrim’s Pride fell as much as 4.6%; Sanderson Farms Inc. tumbled 5.6% for the biggest drop since December. Sanderson and Pilgrim’s Price have underperformed by roughly 6% each since Beyond’s IPO on May 1.
With its own veggie burger in the works, Tyson’s stock is the lone outperformer among so-called “protein” names, gaining 5.8% since May 1, even as concerns over feed costs weigh on chicken producers.
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>>> NIO - China’s Tesla IPO: 5 things to know about Nio
MarketWatch
By Claudia Assis
Sept 12, 2018
https://www.marketwatch.com/story/5-things-to-know-about-the-ipo-of-nio-aka-the-chinese-tesla-2018-08-15
Nio hopes to raise up to $1.5 billion, making it the fourth largest IPO in the U.S. this year
Shares of Nio Inc., a Shanghai-based electric-car maker, fell more than 4% in their trading debut Wednesday, after the company priced its initial public offering a squeak above the low end of its range, raising money for an expansion that includes launching a smaller electric SUV to broaden its customer base.
Nio sold 160 million American depositary shares priced at $6.26 each, barely above the low end of its price range of $6.25 to $8.25. The company raised $1.00 billion and could raise up to $1.15 billion if all the options granted to underwriters to buy additional shares are exercised.
The deal is among the larger U.S. IPOs this year, behind Axa Equitable Holdings’ EQH, +0.73% $3.16 billion, PagSeguro Digital’s PAGS, +0.47% $2.6 billion, and iQIYI Inc.’s IQ, -2.56% $2.4 billion.
The company has listed its ADS on the New York Stock Exchange under the ticker symbol NIO. Morgan Stanley, Goldman Sachs and J.P. Morgan were among the underwriters.
Entities affiliated with Chinese technology conglomerate Tencent Holdings Ltd. 0700, +1.70% have a 15% stake in Nio, and those affiliated with investment powerhouse Hillhouse Capital another 7.5%, according to the company’s prospectus. Founder and Chief Executive Bin Li holds a 17% stake.
The company will compete with Tesla Inc. TSLA, -1.02% in the luxury electric-car market, and mentioned the potential U.S. rival 13 times in its prospectus.
Here are five things to know about Nio:
Its name means ‘blue sky coming’
Nio’s Chinese name, Weilai, translates as “blue sky coming.” Li founded the company in 2014, then named NextCar Inc. It changed its name to Nio three years later.
Nio first introduced a “super car,” the EP9, in 2016. It launched its first volume-produced car, the ES8, in December 2017, with deliveries starting in June of this year.
The ES8 is a 7-seater all-aluminum body electric SUV that the company boasts is cheaper in China than Tesla’s Model X.
“Currently we believe no premium BEV is available to Chinese consumers at competitive pricing and the ES8 is expected to face limited competition initially from premium BEVs,” NIO said in the prospectus.
As of the end of July, Nio had delivered 481 ES8s and had unfulfilled reservations for more than 17,000 ES8s with deposits, according to the prospectus.
Nio plans to launch its second vehicle, the ES6, by the end of 2018, and start deliveries in the first half of next year. The ES6 is a 5-seater, “high-performance premium electric SUV, set at a lower price point than the ES8 to target a broader customer base,” NIO said in the filing.
Nio had a fairly standard warning about the ES6 in the filing, saying it “may not successfully develop the ES6. Our vehicles may not meet customer expectations and our future models, including the ES6, may not be commercially viable.”
No revenue until this year
Nio has more in common with Tesla than ambition: it also has lost massive amounts of money and burned through piles of cash — part of the reason it plans to go public.
“We have negative cash flows from operation, have only recently started to generate revenues and have not been profitable, all of which may continue in the future,” it warned.
Nio began showing revenue this year, reporting $6.7 million in vehicle sales and $7 million in total revenue for the first six months of 2018, when net losses topped $502 million. The company reported a net loss of $758.8 million for all of 2017.
Through June, Nio had burned through $549 million in cash to operate, compared with $691 million for all of 2017. Capital expenditures hit $163 million in the first six months of this year, compared with $168 million for all of last year.
The company estimates that its capital expenditures for the next three years will reach about $1.8 billion. That includes money for improvements and installation of equipment at a plant in Shanghai, as well as for research and development and the expansion of its sales and service network. It expects to incur about $600 million of that in the 12 months starting July 2018.
Nio’s total borrowings, as of June, reached $189.9 million, mainly bank loans and a loan from its investors, said the prospectus.
‘Limited experience’ in making cars
There is no dearth of risks listed in Nio’s prospectus, and such risks are familiar to anyone who has spent any time reading about Tesla: “Our ability to develop and manufacture a car of sufficient quality and appeal to customers on schedule and on a large scale is unproven and still evolving,” it said of risks relating to business.
Nio admits it has “limited experience” so far in high-volume manufacturing of electric vehicles.
“We cannot assure you that we will be able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to successfully mass market the ES8 and future vehicles,” it said.
Then there are the suppliers. The ES8 uses more than 1,700 purchased parts which Nio buys from more than 160 suppliers. Many of those are single-source suppliers for these components, and the company is expecting that this will be similar for the ES6 and any other future vehicle it may produce.
“The supply chain exposes us to multiple potential sources of delivery failure or component shortages,” says the prospectus.
The company is also highly dependent on government incentives and policies that are favorable for electric vehicles.
Its business could be affected by trade wars
Nio said its business could be “adversely affected” by trade tariffs or other trade barriers, including U.S. tariffs imposed in March on steel and aluminum and additional tariffs targeting Chinese goods.
Nio does not export any products to the U.S. and it is not yet clear what impact these tariffs could have. It intends to sell its cars only in China at least in the near future, but tariffs could potentially impact raw-material prices, it said.
Unusual—and risky—corporate structure
Like many Chinese companies with listings outside of China, Nio is a variable-interest entity, or VIE, a structure created in the 1990s as a workaround for Chinese companies that are not allowed to have direct foreign ownership.
Under the VIE structure, the Chinese company creates two entities, one in China that holds the permits and licenses needed to do business there and the other an offshore entity, in this case in the Cayman Islands, in which foreign investors can buy shares. The Chinese entity, which is usually owned by top executives, pays fees and royalties to the offshore company in contractual arrangements.
The biggest example of a VIE is Alibaba Group Holding Ltd., in which the Chinese entity is wholly owned by its founder and chairman, Jack Ma.
The risk with this setup is that foreign investors don’t actually own stock in the company, and local management or even the Chinese government could decide or force a split with the listed company, leaving U.S. investors high and dry.
“It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide,” the company warns in its prospectus.
As an “emerging growth” company, Nio has to follow fewer reporting and other requirements.
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IPO activity - recently priced IPOs -
https://www.nasdaq.com/markets/ipos/activity.aspx?tab=pricings
>>> Beyond Meat Makes History With the Biggest IPO Pop Since 2008 Crisis
Bloomberg
By Bailey Lipschultz and Drew Singer
May 2, 2019
https://www.bloomberg.com/news/articles/2019-05-02/beyond-meat-makes-history-with-biggest-ipo-pop-since-08-crisis?srnd=premium
Beyond Meat Has Exciting Future Ahead, CEO Says
Beyond Meat Inc. went where no company had gone in more than a decade as shares nearly tripled in their first day of trading.
Top Historical Performers
The 163 percent surge for the maker of vegan beef and sausage products was the best debut session of any U.S. listing since at least 2008 among IPOs that raised at least $200 million. Beyond Meat saw its market value balloon to $3.83 billion at the close of trading.
Goldman Sachs, Bank of America Merrill Lynch, Credit Suisse Group AG, Jefferies LLC and JPMorgan Chase & Co. are among the banks that served as underwriters to the El Segundo, California-based company, which is listed on the Nasdaq. The banks have been busy through the start of 2019 with each serving as an underwriter for Lyft Inc. or Uber Technologies Inc.
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>>> Beyond Meat
https://en.m.wikipedia.org/wiki/Beyond_Meat
Beyond Meat is a privately held, Los Angeles-based producer of plant-based meat substitutes founded in 2009 by Ethan Brown. Beyond Meat's products became available across the United States in 2013 at Whole Foods supermarkets.[1][2][3] In May 2016, it released the first plant-based burger to be sold in the meat section of grocery stores. Product availability has expanded internationally to restaurants and supermarkets in the US, Canada, Europe (Italy, UK), and Israel. The company, as of 2019, has products designed to replace chicken meat, beef, and pork sausage.
Beyond Meat
Beyond Burger packaging.png
Type
Private
Industry
Food
Founded
2009; 10 years ago
Founder
Ethan Brown
Headquarters
El Segundo, California
Revenue
US$33 million (2017)
Beyond Meat burger, a Beyond Burger in a restaurant in Israel
Beyond Meat was founded by Ethan Brown in 2009.[4] The company has received venture funding from Kleiner Perkins Caufield & Byers, Obvious Corporation, Bill Gates, Biz Stone, the Humane Society[5][6][7] and Tyson Foods.[8] The company began selling its chicken-free mock chicken products in Whole Foods across the US in April 2013.[4][5][9][10] In 2014 it developed a Beyond Beef product. The Beast Burger was available in February 2015. Beyond Sausage became available nationwide in January 2018.
People for the Ethical Treatment of Animals named Beyond Meat as its company of the year for 2013.[11][12]
Tyson Foods purchased a 5% stake in Beyond Meat in October 2016.[13] It sold its 6.5% stake and exited the investment in April 2019, ahead of Beyond Meat's IPO.[14]
In June 2018, Beyond Meat opened its second production facility in Columbia, Missouri, resulting in a three-fold increase of the company's manufacturing space.[15] Beyond Meat also claimed to have 27,000 different points of distribution for their products in the United States.[16] In July, the company was rolling out their products to 50 international markets, partnering with Tesco in the UK and A&W in Canada.[17]
In March 2019, Don Lee Farms filed a civil suit against Beyond Meat. Don Lee alleges breach of contract, and further charges Beyond Meat with problems "regarding inadequate food safety protocols."[18]
As of Monday, April 22, 2019, Beyond Meat is looking to raise $183.8 million dollars through an initial public offering to price between $19 and $21 per share. It has applied to list on Nasdaq under the ticker symbol “BYND”.[19] According to an article in Marketwatch, Beyond Meat faces several possible problem with the company's long-term prospects. Revenues are strong, but Beyond Meat has never earned a profit and company relies on "one single supplier" for its pea protein. Furthermore, Beyond Meat does not have written contracts with several key processing facilities.[20]
Products
Beyond Meat develops and manufactures a variety of plant protein-based food products. The vegetarian meat substitutes are made from mixtures of pea protein isolates, coconut oil, and other ingredients.[10][21] As of 2014, the company's product offerings consisted of Beyond Chicken and Beyond Beef.[2][22][10][23] A vegan and soy-free burger patty called The Beast was released in 2015. Its products are available for purchase in packaged form as well as in retail-prepared dishes.[2][22][10][24]
Beyond Meat's chicken-free products, marketed as Beyond Chicken, are made from a mixture of soy and pea proteins, fiber, and other ingredients and are marketed as a healthy alternative to chicken meat.[4][24] The ingredients are mixed and fed into a food extrusion machine that cooks the mixture while forcing it through a specially designed mechanism that uses steam, pressure, and cold water to form the product's chicken-like texture.[10] After being processed in the extrusion machine, the product is cut to size, seasoned, and grilled before being packaged.[25] Each batch of chicken takes approximately 90 minutes to produce.[25]
The company's two flavors of Beyond Beef imitation ground beef product, Beefy and Feisty, are made from pea proteins, canola oil, and various seasonings.[24][26] The soy and gluten-free pea protein mixture initially resembles a paste before being heated and processed by an extrusion machine.[9] The "beefy" crumbles possess the same protein content per 55 gram serving as ground beef.[4][21]
The Beast Burger, the first burger patty, released in 2015
Beyond Meat announced in 2014 that it had begun development and testing of a new product called The Beast. The vegetable protein-based burger patties were taste tested by The New York Mets during a pregame event.[23][27][28][29] The Beast Burger was officially released February 2015 and is available at Whole Foods Market.[30] The burgers are vegan, soy-free, and contain 23 grams of protein in addition to antioxidants, iron, calcium, Vitamins B6, B12 & D, Potassium, DHA Omega-3s, and ALA Omega-3s.[31][32][32][33]
In May 2016, Beyond Meat released the first plant-based burger to be sold alongside beef, poultry and pork in the meat section of the grocery store.[34] Making its debut at the Pearl St. Whole Foods in Boulder, Colorado, the Beyond Burger sold out within the first hour of hitting shelves.[35] Starting in July 2018, the Beyond Burger was available at all of A&W Canada's locations, the second largest fast food chain in Canada.[36] In January 2019, Carl's Jr. Restaurants LLC. announced a partnership with Beyond Meat to sell the Beyond Famous Star with cheese, a charbroiled Beyond Burger with American Cheese in more than 1,000 Carl's Jr. locations.[37]
The Beyond Burger contains 20 grams of protein and has no soy, no gluten, no cholesterol, and half the saturated fat of an 80/20 beef burger.[38][39] However, it contains five times as much sodium as unseasoned hamburger meat and one dietician argued that the processing of the vegetarian ingredients could cause the loss of valuable nutrients.[40]
The Beyond Burger requires 6.1 mj (1457.93 kcal) of energy to produce 290 kcal of product. According to a study by the Center for Sustainable Systems at University of Michigan (commissioned by Beyond Meat), "based on a comparative assessment of the current Beyond Burger production system with the 2017 beef LCA by Thoma et al, the Beyond Burger generates 90% less greenhouse gas emissions, requires 46% less energy, has >99% less impact on water scarcity and 93% less impact on land use than a ¼ pound of U.S. beef." [41]
In December 2017, a vegan alternative to pork sausage, Beyond Sausage, was announced.[42] The three varieties of "sausage" (Bratwurst, Hot Italian, and Sweet Italian) were first sold for a one-day-only event at a Whole Foods Market in Boulder, Colorado, and became nationally available to purchase in January 2018.[43]
Availability
Beyond Meat is available in supermarkets, restaurants and wholesalers in the US and Canada. Additionally A&W Canada became the first national burger restaurant to serve them in their menu.[44] In Europe, Beyond Meat is currently available in wholesale and in many restaurants across Italy.[45] It is also available in one restaurant in Israel. The chain company HD Diner offers it in a vegan hamburger in France.
Reception
Mark Bittman, a food journalist with The New York Times, wrote that "you won't know the difference between that [Beyond Meat] and chicken. I didn't, at least, and this is the kind of thing I do for a living."[46] In 2013, American businessman Bill Gates wrote, on his personal blog: "I couldn't tell the difference between Beyond Meat and real chicken".[1] Celebrity chef Alton Brown wrote that Beyond Meat's Beyond Chicken is "more like meat than anything I've ever seen that wasn't meat", and "while the unflavored product tastes distinctly vegetal and still has a bit of what I’d call tofu-bounce, a hint of the spongy, the tear is meaty".[10]
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>>> The Slack IPO Is Coming. Here’s What You Need to Know
By David Marino-Nachison
April 26, 2019
https://www.barrons.com/articles/slack-ipo-direct-listing-what-you-need-to-know-51556297281?siteid=yhoof2&yptr=yahoo
Slack filed for a direct public listing Friday, which would make the maker of workplace productivity software publicly traded without raising money for it to use.
Slack’s intent to undergo a “direct listing,” echoes a decision made by streaming-music company Spotify Technology (SPOT). The shares will be traded on the New York Stock Exchange with the symbol “SK.”
When it happens, it will add to the list of high-profile public offerings this year. Lyft (LYFT) and Pinterest (PINS) are already trading and deals by Uber Technologies and Beyond Meat are on the way.
It’s unclear what Slack’s market value might be as a public company. Last year, it announced a round of financing valuing it at $7.1 billion. Its filing, meanwhile, said that its class B shares traded hands in private transactions at prices between $8.37 and $23.41 in the fiscal year ended Jan. 31.
The company had about $181 million in cash and equivalents on hand at the end of January, up from $120 million a year before. Here are some more key facts.
• Slack reported revenue of around $400 million in the fiscal year ended Jan. 31, up more than 80% from $220 million the prior year. Gross profits, which came in at $349 million, rose at roughly the same rate.
• But operating losses increased from $144 million in 2018 to $154 million last year, as operating expenses exceeded $500 million. “We expect to continue to incur net losses for the foreseeable future,” the company said in its filing.
As Slack has grown, it has increased its workforce to about 1,500 employees at the end of January from less than half that two years earlier.
• The company reported more than 10 million daily active users last year, with more than 600,000 organizations having at least three users of its software. It had 88,000 paying customers, and 575 of those each represent more than $100,000 in annual recurring revenue.
The 575 customers accounted for about 40% of revenue last year. Adding more, larger, organizations is a key component of Slack’s sales strategy.
• Without details about pricing and the likely timing of the listing, it’s hard to made a well-informed decision about whether you’d like to buy the shares when they begin trading. Generally, it pays to be cautious around high-profile IPOs, as Barron’s explained this month.
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>>> Pinterest, Inc. (PINS) provides a visual discovery engine that helps users to discover ideas for various projects and interests worldwide. Its platform allows users to discover ideas for daily activities, remodeling a house or training for a marathon, ongoing passions, and planning a wedding or a dream vacation. The company's platform show visual recommendations called Pins, based on user personal taste and interests. It also provides Product Pins that make items shoppable with up-to-date pricing; Recipe Pins to cook a meal by bringing the relevant information; Shop the Look, which enables pinners to shop for the individual products they see within fashion and home decor Pins; and Video Pins, which are short videos with topics, such as how-to content about cooking and beauty. The company was formerly known as Cold Brew Labs Inc. and changed its name to Pinterest, Inc. in November 2010. Pinterest, Inc. was incorporated in 2008 and is headquartered in San Francisco, California. <<<
LYFT's big losses don't seem to bother investors (yet) -
>>> Lyft Valued at $22.4 Billion After Rising in Trading Debut
Bloomberg
By Olivia Zaleski and Eric Newcomer
March 29, 2019
Shares close first day up 8.7 percent after $2.34 billion IPO
https://www.bloomberg.com/news/articles/2019-03-29/lyft-jumps-in-debut-after-ride-hailing-ipo-raises-2-34-billion?srnd=premium
Lyft Inc., the No. 2 U.S. ride-hailing giant, jumped in its debut after raising $2.34 billion in an initial public offering that priced at the top of an elevated range, sending an encouraging signal to the stampede of Silicon Valley companies lining up to go public this year.
Shares opened Friday morning at $87.24 -- 21 percent above the IPO price of $72 -- and drifted downward in the afternoon, closing up 8.7 percent to $78.29 in New York. That gives the company a market value of about $22.4 billion.
After Lyft’s co-founders Logan Green and John Zimmer rang the Nasdaq opening bell from a driver center in Los Angeles, shares took more than two hours to start trading. Zimmer said they decided to forgo the traditional opening ceremony on the floor of the exchange to be with the company’s drivers.
“We want to make a point that you can both invest in communities and invest in great business,” Zimmer said in a Bloomberg Television interview. “Its fun to ring the bell with several members of our driver community.”
Green and Zimmer will maintain near-majority control of the company through Class B shares that carry the voting rights of 20 ordinary shares.
After a chilly start to 2019 for U.S. IPOs as the federal government shutdown stymied activity, Lyft’s success could light a fire under a market that’s likely to welcome Uber Technologies Inc., Pinterest Inc. and Slack Technologies Inc. -- to name a few --- before the end of the year.
San Francisco-based Lyft sold 32.5 million shares after initially marketing 30.8 million shares at $62 to $68 each. It increased the range to $70 to $72 the day before the IPO was set to price. Shares are trading on the Nasdaq Global Select Market under the ticker LYFT.
“What happened today was good. This IPO is clearly a giant success,” said Barrett Daniels, a Deloitte partner who specializes in IPOs. “It’s been masterful.”
Daniels cautioned that it’s still early in the day and anything could change. “We don’t know how the stock will perform in the long term, but this morning feels like the first step in a potentially historic year for IPOs.”
All eyes were on Lyft Friday morning as investors rushed to get a piece of the first big U.S. technology listing of the year. The stock’s early performance served as a litmus test for public market investors and their appetite for money-losing tech companies.
$911 Million Loss
This month, Lyft disclosed in its IPO filing with the Securities and Exchange Commission that it lost $911 million on revenue of $2.2 billion in 2018. That compared with a loss of $688 million on revenue of $1.1 billion the previous year.
Investors didn’t seem to mind that the company was losing money. Last week, after just two days of marketing to investors, Lyft’s listing was oversubscribed. By Friday, Lyft ended up selling more shares than planned at the top of an already elevated price range.
The lead bankers for the offering -- JPMorgan Chase & Co., Credit Suisse Group AG and Jefferies Financial Group Inc. -- presented over nine days to more than 600 investors, said a person familiar with the matter who asked not to be identified because the meetings were private.
In all, more than two dozen banks were listed in the company’s filing as participating in the offering. JPMorgan served as the stabilizing agent, giving it a chance to earn additional fees by ensuring the first day of trading went smoothly with limited stock price fluctuations.
Lyft's Ride Up
Its opening share pop ranked fourth among the top 10 U.S. tech, internet IPO
Of the 22 tech and internet companies that have raised $1 billion or more in U.S. IPOs, Lyft ranks seventh at $2.34 billion. That was just behind last year’s $2.42 billion listing by the Chinese video service iQIYI Inc. and ahead of Twitter Inc.’s $2.09 billion offering in 2013.
Alibaba Group Holding Ltd. tops the list at $25 billion in 2014 -- the largest ever U.S. IPO -- followed by Facebook’s $16 billion listing in 2012
21 Percent Pop
Lyft investors got a 21 percent pop when trading opened over the offer price of $72. That ranked Lyft as the sixth best of that group at the opening price. Its closing price put it more toward the middle of that pack.
Attention grabbing tech listings often soar on their first day of trading. Snap Inc. closed its first day of trading up 44 percent in 2017, while Alibaba finished its debut up 38 percent. Snap now trades at less than two-thirds of its listing price while Alibaba has almost tripled its market value.
Lyft’s offering fulfilled a key strategic goal for the company: beating larger rival Uber to the market. Uber is expected to publicly file for its offering in April, kicking off a listing that could make the company worth as much as $120 billion, people familiar with the matter have said.
The company’s appeal to investors hinged on the potential for ride-hailing to replace car ownership. Zimmer likened the displacement of car ownership to cable television cord cutters.
“This massive market shift -- just like entertainment has gone streaming is happening with car ownership,” he said. “We’re going after a trillion-dollar market opportunity.”
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>>> Two Big IPOs Wake 2019’s Market From a Sleepy Start
Bloomberg
By Elizabeth Fournier
March 18, 2019
https://www.bloomberg.com/news/articles/2019-03-18/lyft-nexi-plans-set-to-wake-2019-ipo-market-from-sleepy-start?srnd=premium
Lyft Looks for Valuation Near $20 Billion in IPO
LYFT
LYFT INC-A
Private Company
1622736D
NEXI SPA
Private Company
TUFN
TUFIN SOFTWARE TECHNOLOGIES
Private Company
0084207D
UBER TECHNOLOGIES INC
Private Company
1089727D
SLACK TECHNOLOGIES INC
Private Company
After a slow start to the year in IPO-land, things are finally starting to heat up.
Companies detailed plans to raise at least $6 billion in global initial public offerings on Monday, more than two thirds of the total announced previously this year, according to data compiled by Bloomberg.
Ride-hailing giant Lyft Inc. aims to raise as much as $2.1 billion in its U.S. listing, while Italian payments firm Nexi SpA is targeting a Milan IPO of up to 2.7 billion euros ($3.1 billion). Twelve other companies set terms for their offerings Monday, including Precision Biosciences Inc. and Tufin Software Technologies Ltd., the data show.
Lyft Aims for Valuation Near $20 Billion in Biggest U.S. IPO
It’s one of the first signs that 2019 could yet live up to its billing as a bumper year for going public, particularly among technology firms. Uber Technologies Inc. is set to follow smaller rival Lyft out the door in the second quarter, while office chat software maker Slack Technologies Inc. and food-delivery app Postmates Inc. are also considering listings.
Combined, those four companies could add more than $150 billion of market cap to global indexes, based on their last private valuations or how much they’re expected to be valued at in an IPO.
As of Friday, just 22 U.S. IPOs had raised $1.6 billion so far in the first quarter, the worst start since 2016. In Europe, Volkswagen AG on March 13 cancelled a stock sale of its truck division that could have raised as much as $3 billion, a decision that one head of trading said could “spoil the mood,” for other IPO-bound companies in the region.
While Nexi’s and Uber’s listing are set to come after the start of April, Lyft’s at least will help bolster the first-quarter numbers. The San Francisco-based company is planning to price its shares on March 28 and start trading the following day.
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Yes, should be interesting - >>> Beyond Meat is going public: 5 things to know about the plant-based meat maker
By Ciara Linnane
Jan 15, 2019
https://www.marketwatch.com/story/beyond-meat-is-going-public-5-things-to-know-about-the-plant-based-meat-maker-2018-11-23
Beyond Meat has a surprising number of competitors and plans to expand around the globe
Beyond Meat
Beyond Meat, the company created by vegan Ethan Brown in 2009, is planning to go public to raise the money it needs to grow its line of plant-based meats.
The maker of the Beyond Burger, which is sold at Whole Foods AMZN, -0.69% and restaurant chain TGIF, has applied to list on Nasdaq under the ticker symbol “BYND”.
Goldman Sachs, JPMorgan and Credit Suisse are lead underwriters on the deal with BofA Merrill Lynch, Jefferies and William Blair acting as co-managers. The company, which also makes pork and poultry products, has not yet set a price range or specified how much it is aiming to raise, using the placeholder sum of $100 million in its prospectus.
Proceeds of the deal will be used to expand current manufacturing facilities and open new ones, to finance research and development and to boost sales and marketing, along with the catchall “general corporate purposes,” according to the prospectus.
“As a young adult, I enjoyed a career in clean energy but continued to wrestle with a question born of these early days: do we need animals to produce meat?,” asks Brown, who is chief executive as well as founder of Beyond Meat, in a letter included in the prospectus.
The letter explains how Brown set out to understand the history of human consumption of meat, acknowledging that it helped spur the increase in brain size that allowed our ancestors to become hunters, not scavengers, and led to the development of agriculture.
But the toll taken on human health, the environment, natural resources and animal welfare is a high one, he says, listing as examples of unintended consequences such illnesses as cancer, heart disease and diabetes.
“Livestock emerged as a major contributor of greenhouse gas emissions, with related burdens on land, energy, and water,” says the letter.
Brown argues that humans do not need to fully abandon meat, but to change the definition to one that considers composition and structure-—amino acids, lipids, trace minerals, vitamins and water.
Those core elements are not exclusive to animals, but exist in the plant kingdom too, he says.
“The animal serves as a bioreactor, consuming vegetation and water and using their digestive and muscular system to organize these inputs into what has traditionally been called meat,” he writes
“At Beyond Meat, we take these constituent parts directly from plants, and together with water, organize them following the basic architecture of animal-based meat. We bypass the animal, agriculture’s greatest bottleneck.”
Beyond Meat’s strategy is to place its products in the meat case at its grocery partners with the aim of persuading meat lovers to try it out. The company does not try to market to vegans and vegetarians, who account for less than 5% of the U.S. population. The Beyond Burger is now available at about 11,000 of its 17,000 grocery-store customers in the U.S., says the prospectus.
It is also available at Canadian fast-food restaurant chain A&W.
Here are five things to know about Beyond Meat ahead of its IPO:
It has never made a profit
Beyond Meat has successfully grown its revenue over the years, but has yet to produce a profit. In the first nine months of 2018, the company generated revenue of $56.4 million, more than double the $21.1 million posted in the year-earlier period, and more than the $32.6 million posted for all of 2017.
But its net loss in the nine-month period came to $22.4 million, only slightly less than the $23.4 million loss posted in the year-earlier period. The company’s loss for 2017 came to $30.4 million, wider than the $24.1 million loss posted in 2016.
“We anticipate that our operating expenses and capital expenditures will increase substantially in the foreseeable future as we continue to invest to increase our customer base, supplier network and co-manufacturing partners, expand our marketing channels, invest in our distribution and manufacturing facilities, hire additional employees and enhance our technology and production capabilities,” the prospectus cautions. “Our expansion efforts may prove more expensive than we anticipate, and we may not succeed in increasing our revenues and margins sufficiently to offset the anticipated higher expenses.”
Investors should also note that like many companies when they first go public, Beyond Meat is not planning to pay a dividend in the foreseeable future. That means investors must rely on stock gains to generate returns.
It has some big ambitions
Beyond Meat is expecting the alternative meat category to become a multibillion-dollar market over time and to take significant share from the $1.4 trillion global market for meat. The company is planning to mimic the strategy used by the plant-based dairy industry, which currently is the same size as about 13% of the dairy milk industry at about $2 billion in 2017.
“The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous non-dairy substitutes, packaged and merchandised adjacent to their dairy equivalents,” says the prospectus.
Using that same strategy could boost the plant-based meat category to the same proportion of the roughly $270 billion meat category in the U.S. — or $35 billion in the U.S. alone.
The company has launched in Europe via contracts with three distributors and reports strong interest from European grocery and restaurant chains. It is planning to open manufacturing facilities in Europe in 2020. It also has a local distributor in Hong Kong and expects to expand in Asia over time.
It has a surprising number of competitors
Plant-based meat may sound like a niche market, but Beyond Meat says it is operating in a highly competitive environment. The company is competing with other plant-based protein makers, including Boca Foods, Field Roast Grain Meat Co., Gardein, Impossible Foods, Lightlife, Morningstar Farms and Tofurky. But it also views traditional meat companies as rivals, including such giants as Cargill, Hormel Foods Corp. HRL, -0.12% JBS JBSS3, +2.14% , JBSAY, -7.67% Tyson Foods Inc. TSN, -1.38% and WH Group 0288, -1.27% the owner of Smithfield.
Those companies have far more money and resources and their products are already widely accepted by consumers.
“They may also have lower operational costs, and as a result may be able to offer conventional animal meat to customers at lower costs than plant-based meat,” the prospectus says. “This could cause us to lower our prices, resulting in lower profitability or, in the alternative, cause us to lose market share if we fail to lower prices.”
Alternatively, traditional food companies may decide to acquire makers of plant-based foods and launch their own alternative protein products, using their size and scale to gain market share.
It needs a lot of one special ingredient
The main ingredient in Beyond Meat’s products is pea protein, an extract of yellow peas, which it currently sources from Canada and France. However, it has one single supplier of the protein, which represented 79% of net revenue in the first nine months of 2018. The company has already suffered supply interruptions from this supplier that caused delays in delivery.
The price of pea protein is vulnerable to a range of factors, from poor harvests caused by bad weather to natural disasters and pestilence, as well as changes in economic conditions and the number of farms that grow them.
Beyond Meat says it is working to diversify its supply chain and lock in prices through long-term contracts.
It does not have fixed contracts with co-manufacturers
A significant amount of Beyond Meat’s revenue stems from products that are made at facilities owned by co-manufacturers, including CLW Foods LLC and FLP Food LLC. CLW Foods is a California-based producer of ground beef, while FPL is a Georgia-based beef company.
But the company does not have written contracts with either company, meaning they could end or change the relationship at any time.
See: Happy Halloween! How the food industry tricks you into buying candy, chocolate and soda
“We believe there are a limited number of competent, high-quality co-manufacturers in the industry that meet our strict quality and control standards, and as we seek to obtain additional or alternative co-manufacturing arrangements in the future, there can be no assurance that we would be able to do so on satisfactory terms, in a timely manner, or at all,” says the prospectus.
In the meantime, it is embroiled in litigation with a former co-manufacturer, Don Lee Farms. That company filed a suit against Beyond Meat in California in 2017, claiming its contract was wrongfully terminated and that the company shared trade secrets with subsequent co-manufacturers.
Beyond Meat filed a cross-complaint alleging that Don Lee Farms breached its contract when product was contaminated with salmonella and it failed to take actions to address that issue.
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Feeling the love with this one. Will be interesting to see what the initial price is when the IPO comes out. I think the vegan movement is going to provide some great investment opportunities.
>>> With the Economy Uncertain, Tech ‘Unicorns’ Rush Toward I.P.O.
Uber and Lyft have accelerated their timelines for an initial public offering, said people with knowledge of the companies’ plans.
By Erin Griffith and Mike Isaac
Dec. 6, 2018
https://www.nytimes.com/2018/12/06/technology/lyft-uber-ipo.html?module=inline
SAN FRANCISCO — For years, Uber and Lyft put off going public. Now, they are speeding up.
Faced with a volatile stock market and the prospect of an economic downturn next year, the ride-hailing services have moved more urgently toward an initial public offering, said four people with knowledge of the companies’ plans, who were not authorized to speak publicly.
Lyft originally aimed to list its shares toward the middle of 2019, but it began moving more quickly after the recent stock market sell-off and because of a desire to go public before Uber, said two of the people. On Thursday, the company, which was most recently valued at $15 billion, announced it had filed confidentially for an I.P.O.
Uber has also hastened its I.P.O. clock. The company had once said it was looking to the fall of 2019 to go public, but has pushed that timing up because of concerns that a recession might be coming, said two people familiar with the plans. Uber could now go public as soon as next April, they said. Investment banks have told the company it could be worth as much as $120 billion in an I.P.O.
The moves by Lyft and Uber indicate how tricky it can be to decide when to go public at a time when stock markets have been turbulent and the broader economic picture is muddied. The calculus for when a company publicly lists its shares is often a moving target, but Uber’s and Lyft’s actions will carry particular weight with a swath of other highly valued Silicon Valley start-ups that are also preparing to approach the public markets.
Airbnb, the online room rental company, plans to be ready to go public by mid-2019 though it has not set a formal timeline, said a person with knowledge of the matter. Slack, the online collaboration company, has said it is readying for a public offering but has no specific timeline.
“Companies that were talking about 2020 have been told that the window may not be open as long as previously thought,” said Barrett Daniels, a partner at Deloitte who advises on I.P.O.s. He said that he was telling companies that “if an I.P.O. is in your plan, I would probably be getting ready now.”
Any stock market debuts of these companies will be the final chapter of the era of “unicorns,” the privately held start-ups valued at more than $1 billion. Many of these companies, which were born after the 2008 recession, rode a wave of smartphone adoption, turning businesses like taxis or grocery delivery into on-demand services. They also benefited from abundant capital from private investors, which was driven by low interest rates.
For years, many unicorns were in no rush to go public because they could grow easily with money from private investors and away from the scrutiny of Wall Street. In 2016, Travis Kalanick, Uber’s co-founder and then chief executive, spoke for many tech start-ups when he said at a conference that his company would go public “as late as humanly possible.” Employees would be distracted by stock price movements, he said.
Those attitudes have shifted as investors and tech employees have increased pressure on the companies to go public so that they can cash in their shares.
“The forcing factor is, how do you deal with issues of employee retention?” said Rick Heitzmann, a managing director at FirstMark Capital, which is an investor in unicorns such as Pinterest and Airbnb.
But the seesawing stock market, a trade war with China and other countries and uncertainty over the direction of the economy are all now weighing on I.P.O. decision-making. Few executives want to take their companies public when investors’ appetite for shares may be ebbing.
“Companies that were waiting for everything to be perfect before going public might have been better off going when things were good enough,” Mr. Heitzmann said.
Sandy Miller, a venture capitalist at IVP, said several companies were meeting with potential investors far ahead of filing for an I.P.O., in what are known as pre-roadshow events. “That’s the only way to really know what kind of receptivity you’re going to have” from the public markets, he said.
Mr. Miller said that he expected a robust year for I.P.O.s next year, but that companies may not want to wait until too late in the year to file. “There are certainly some storm clouds on the horizon,” he said.
Some unicorns are sidestepping the unpredictability altogether. WeWork, an office rental company valued at $45 billion, has been widely named as an I.P.O. candidate. But in November, the company agreed to sell an additional $3 billion of shares to its main investor, SoftBank’s Vision fund. That deal has allowed WeWork to push plans for a public listing further into the future, said a person familiar with the company.
For Uber and Lyft, the biggest question they face from public market investors is whether their businesses can be profitable. Expanding a ride-hailing service requires outlays to recruit drivers in multiple cities, which can quickly get expensive. Uber said last month that it lost $1.07 billion in the third quarter, as it spent to invest in new areas such as bicycles, scooters and freight shipments.
Inside Uber, Dara Khosrowshahi, the chief executive, has raced to prepare the company to go public. Over the past year, the company has overhauled many of its internal processes, from items as small as creating more formal systems for expense reports to global safeguards that ensure legal compliance in every area where Uber operates.
Going public sooner could give Uber a number of advantages. It would mean raising fresh outside capital, providing the company ammunition to pursue acquisitions and other opportunities. And it would enable Mr. Khosrowshahi to potentially reshape Uber’s board because current members can be asked to leave when there is a liquidity event like an I.P.O., according to the company charter. Uber’s board has grappled with a history of infighting.
Lyft is likely to still go public ahead of Uber because it has already filed for an offering. In a statement on Thursday about its confidential I.P.O. filing, Lyft said it had not yet determined how many shares would be sold or their price range.
Any offering would be “subject to market and other conditions,” Lyft said.
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>>> Slack Files for Public Offering, Joining Silicon Valley’s Stock Market Rush
NY Times
2-5-19
https://www.nytimes.com/2019/02/04/technology/slack-ipo.html
Stewart Butterfield, Slack’s chief executive, has long indicated that he planned to take the company public.
SAN FRANCISCO — Slack, a workplace messaging company, said Monday that it had confidentially filed paperwork for an initial public offering, joining the growing number of technology start-ups heading to the stock market.
Slack, which is based in San Francisco, gave no details about the offering’s timing and said it was awaiting a standard review of its paperwork by the Securities and Exchange Commission. The move was expected given that Slack’s chief executive, Stewart Butterfield, had long indicated that he planned to take the company public. Slack recently hired Goldman Sachs to lead the offering.
Slack’s confidential filing comes amid a rush by privately held companies to go public this year. Many of these start-ups, which have been highly valued by private investors, are part of a generation of technology companies known as unicorns. Public share sales by the companies are expected to create a bonanza of riches in Silicon Valley for entrepreneurs and venture capital investors.
In December, the ride-hailing companies Uber and Lyft filed confidential paperwork for their own public offerings. Their efforts stalled temporarily last month when a government shutdown hampered the S.E.C.’s ability to review the companies’ registration documents. Other tech companies expected to go public this year include the online scrapbooking firm Pinterest.
Slack declined to comment beyond its statement about the confidential filing.
There is likely to be a strong demand for Slack stock. The company was valued at $7.1 billion by private investors last year, but in recent weeks investment firms have offered to buy its shares at a price that values Slack at $13 billion, according to a person with knowledge of the details who was not authorized to speak publicly.
Slack also plans an unusual form of public offering called a direct listing, the person added. Unlike most I.P.O.s, in which firms sell stock to public market investors in advance, direct listings let a company begin trading its shares on an exchange without raising new funds. Spotify, a provider of streaming music, went public in 2018 in a direct listing, paving the way for other high-profile start-ups to follow.
With a direct listing, shareholders can also sell their stock immediately after the public offering, instead of waiting for what is known as a lockup period to expire.
Slack has little need for cash. It raised $427 million in new financing in August, a year after raising $250 million. The company has collected a total of more than $1 billion from investors that include the SoftBank Vision Fund, General Atlantic, Dragoneer Investment Group and T. Rowe Price Associates.
Mr. Butterfield began Slack out of a gaming start-up, Tiny Speck. While the company’s game products failed to take off, its internal communication tool showed promise. In 2014, the company began selling that communication tool, called Slack.
Start-ups quickly adopted Slack, and larger companies followed suit. The company offers free and paid versions of Slack and counts more than 85,000 paying customers, including 65 Fortune 100 companies. Last month, Slack said 10 million people now used its product every day. The company generated more than $350 million in revenue last year, said the person with knowledge of the details.
Some companies that have filed to go public have never reached that finish line. Over the last year, a number of high-profile business software companies that took steps to go public were snapped up by a tech giant at the last minute. In November, for example, Qualtrics, an analytics start-up, sold to SAP for $8 billion just days before it was set to ring the opening bell at Nasdaq.
Google, Microsoft and Amazon have previously expressed interest in acquiring Slack, but the company has demurred. Now some of them have increasingly begun to compete with the start-up. When Microsoft introduced its own workplace messaging company, Microsoft Teams, in 2016, Slack took out a newspaper ad directed at its new competitor.
“We’re genuinely excited to have some competition,” it read.
In January, Microsoft announced that 420,000 organizations used its Teams product, including 89 of the Fortune 100.
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>>> Lyft Pitches Its Focus, Amid Uber IPO Frenzy
Bloomberg
By Eric Newcomer
December 7, 2018
https://www.bloomberg.com/news/articles/2018-12-07/lyft-pitches-its-focus-amid-the-frenzy?srnd=premium
The ride-hailing IPO race is on. Lyft Inc. publicly filed confidentially on Thursday. That is to say, Lyft blasted out a press release telling the world that it sent the U.S. Securities and Exchange Commission its financial documents without sharing the information publicly. Announcing that secret step to the world is not unheard of but not typical, either. Uber Technologies Inc. also submitted paperwork confidentially this week, without an accompanying publicity effort.
It’s fitting that Lyft is trying to create as much fanfare as it can, because part of the company’s goal with this initial public offering is to draw attention away from Uber. Anytime someone mentions Uber’s IPO, Lyft wants to be in the next breath (or ideally the breath before). It seems that market conditions be damned, Lyft is ready for its year in the spotlight.
The IPO stories for both companies are starting to emerge. For Lyft, it’s one about focus. The service has gained substantial ground on Uber since early 2017. Unlike Uber, Lyft’s ride-hailing business exclusively operates in North America. Lyft hasn’t fiddled with food delivery or flying cars or trucking.
Uber’s story will sound a bit like, look at this shiny object; now look at this one! While growth of its main business is slowing, Uber is eager to talk about logistics, worldwide food delivery and its chirring machine of ambitious transportation projects. This week, Uber Chief Executive Officer Dara Khosrowshahi unveiled a minibus in Egypt.
It’s focus versus frenzy.
Of course, that’s a bit simplistic. Both companies are making aggressive moves into bicycles and scooters. Last week, Lyft closed its acquisition of Motivate, the company that runs Citi Bike in New York. Lyft is running its own electric scooter program as well. Meanwhile, Uber, which owns Jump Bikes, has had acquisition talks with both Lime and Bird. Rumors abound. TechCrunch declared “Uber is going with Bird (looks like)”—but Bird has strenuously denied that an acquisition is imminent. The companies and their investors are fretting over scooters right now as winter weather is poised to slow growth.
The biggest distraction in the IPO conversation next year will likely be self-driving cars. While Uber was first out of the gate among the two companies to develop an autonomous vehicle program, Lyft has started to invest aggressively itself. The second-place U.S. ride-hailing company has tried to strike a balance between partnership and in-house development, but expenses associated with its research center will put a dent in its earnings (or lack thereof).
However, the bigger concern with investors’ autonomous obsession is less about spending—it’s about valuation. Investors risk overlooking expenditures on self-driving car R&D, hoping that Uber and Lyft can simply sell off those programs as a worst-case scenario. Shareholders should question how much of a bump those efforts give to Uber’s and Lyft’s market caps on the promise that someday self-driving cars will be good for their bottom lines.
It’d be like betting Facebook Inc. would have made the pivot to mobile, if building a smartphone application involved sending unmanned robots into busy traffic and praying for the best. Alphabet’s Waymo has scaled down its self-driving tests. Uber is, according to the New York Times, literally slowing down its cars. Signs suggest that self-driving cars are far away. Will investors pump the brakes and focus on cash flowing from the current businesses? Or will their gaze be affixed to the future? We’ll find out sometime next year.
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>>> Lyft files for IPO in confidential SEC filing, number of shares and price range to be determined
BY FRANK CATALANO
December 6, 2018
https://www.geekwire.com/2018/lyft-files-ipo-confidential-sec-filing-number-shares-price-determined/
Ride-hailing startup Lyft is steering toward the public financial markets.
In a brief statement issued Thursday morning, Lyft said it has confidentially submitted a draft registration on Form S-1 with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering of common stock. The company said it has not yet determined the number of shares to be offered or the price range for the IPO.
“The initial public offering is expected to commence after the SEC completes its review process, subject to market and other conditions,” Lyft said.
Both Lyft and its competitor Uber have been widely anticipated to pursue IPOs, with Uber expected to make its move in 2019. In June, Lyft raised an additional $600 million in an investment round, bringing its valuation to $15.1 billion. That was about a quarter of Uber’s valuation of $62 billion at the time.
Lyft’s fierce competition with Uber extends beyond hailing cars with a mobile app. Both are also players in other forms of transportation in a game of mode leapfrog: Lyft, for example, entered the bikesharing market when it acquired Motivate in July, after Uber bought bikeshare startup JUMP in April.
Even there’s no stated timing for a Lyft IPO, Reuters reports that its sources say it will happen in the first half of 2019. Reuters earlier reported that JPMorgan Chase & Co., Credit Suisse and Jeffries have been chosen by Lyft as its IPO underwriters.
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Recently, many high profile companies have gone public that means these companies are selling stock openly to investors. Investing in IPOs can be exciting and it seems like every person are investing in the shares of big companies with the help of online portals like https://preipopros.com/ and more. However, before making a move it is important to evaluate your overall financial plan that matches your existing portfolio.
>>> Plant-based protein company Beyond Meat files for IPO
By Victoria Cavaliere
CNN
November 17, 2018
https://www.cnn.com/2018/11/17/business/beyond-meat-ipo/index.html
(CNN)Plant-based protein company Beyond Meat has filed for a $100 million initial public offering, as vegan and meat alternative food products gain in popularity.
The California-based startup is the maker of vegan sausage, vegan chicken and its flagship product, the Beyond Burger, a 100% plant-based burger sold in grocery stores such as Whole Foods and Kroger and served in restaurants including TGI Fridays. The company claims the burger is "the closest thing to meat" that it has ever created.
In documents filed Friday, the company said it had applied to list its common stock on the Nasdaq under the symbol "BYND," with an initial offering size of $100 million.
The company says net revenue for the nine months ending September 29, 2018, was $56.4 million, a 167% increase from the same period a year earlier. Net losses through September 29, 2018, were $22.4 million.
"Going forward, we intend to continue to invest in innovation, supply chain capabilities, manufacturing and marketing initiatives," the company said in the filing.
The global market for meat substitutes is forecast to grow steadily, from an estimated $4.6 billion in 2018 to $6.4 billion by 2023, according to research firm MarketsandMarkets.
The expansion owes to rising health concerns, including obesity and diabetes, due to consumption of meat products, the research found.
Meat substitute companies, like Beyond Meat, Morningstar Farms and Impossible Foods, are benefiting from growing concern over animal welfare and the environmental impact of factory farming.
Beyond Meat was founded in 2009 and is backed by Bill Gates and Twitter co-founder Biz Stone. J.P Morgan, Goldman Sachs and Credit Suisse will lead the IPO.
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>>> IPO Stocks Take Flight In 2018 — Here's How To Catch One
Dozens of new IPO stocks this year are up 30% or more from their initial pricing. Here's how investors can capture some of the best ones.
DAVID SAITO-CHUNG
8/03/2018
https://www.investors.com/news/ipo-stocks-2018/
Stock market turbulence in 2018 hasn't stopped top IPO stocks from flying to new highs.
The major indexes are up this year, after they fluttered to new heights in 2017. But stocks got batted around starting in February, with the benchmark S&P 500 index swooning nearly 12% in two weeks and flapping up and down since then. Yet in this environment the IPO market has transformed as a new population of lively companies have emerged on the public market.
Renaissance Capital, an IPO-focused investment firm, reports that 115 companies debuted on U.S. exchanges in 2018 through July, up nearly 39% from last year. And the story shared by companies that priced their initial public offerings this year reveals a vibrant tone.
Through Friday morning trading, 37 stocks have lifted 30% or more from their IPO prices. Twenty-five are up at least 50%. And nine have run up 100% or more. (See a list of all 37 top IPO stocks of 2018 at the bottom of this article.)
For the investor looking to capture pretty gains in today's market, recent IPO stocks can be worth the pursuit.
IPO Stocks 2018: Where To Look
When you seek the best growth stocks, it may help to imagine the stock market as a thick, lush forest.
In that forest, you have scads of big growth stocks that have flourished for years, even decades. These leadership-quality names keep innovating their industries or creating new markets, building incredible wealth for long-term holders along the way.
Yet you may also catch a sight of beautiful butterflies. These mystical creatures are like new IPOs on Wall Street. Some die fast, or disappear into stock market mediocrity. But others transform into stunning creators of big stock market profits.
The secret is to know how to tell the difference. And investing in the best IPO stocks carries special nuances. (See How To Buy IPO Stocks and IPO Stocks: Technical Analysis sections below.)
Today's top new moneymakers in the U.S. equities markets, like some butterflies, have exotic names. They've migrated to Wall Street from all parts of the globe. In 2018, they include Huya (HUYA) of Guangzhou, China; Goosehead Insurance (GSHD) of Westlake, Texas; nLight (LASR) of Vancouver, British Columbia; Zscaler (ZS) of San Jose, Calif.; and Cactus (WHD) of Houston.
Huya IPO And nLight IPO: Two Leaders
Huya stock is up more than 170% since the Chinese esports pioneer's May 10 pricing of its initial public offering at $12 a share. The stout gain comes even after a steep correction that began on June 15. High-power fiber laser maker nLight has flown as much as 173% above its IPO pricing on April 25 at $16 a share.
New winners like these typically lead fast-growing new markets. Or they are benefiting from the positive effects of dramatic change in their underlying industries.
R. Buckminster Fuller, the American engineer and architect, was quoted as saying, "There is nothing in a caterpillar that tells you it's going to be a butterfly." That's not necessarily true for new IPO stocks.
Outstanding financial performance, a great management team and amazing new products and services help form the launchpad for strong moves among new stocks, just as with older stocks.
Take Cactus. It designs, makes, sells and rents wellheads and pressure control equipment to oil and gas firms. Four years ago, crude oil prices plunged more than 75%. Yet oil ended its bear market in the winter of 2016 and has forged a bullish climb. Houston-based Cactus had a gusher of a year in 2017. Revenue soared 120% to $341 million, a record. The bottom line went from a net loss of 11 cents a share in 2016 to earnings of 89 cents a share.
On Wednesday, Cactus posted another round of excellent quarterly results (earnings up 109% to 46 cents a share, revenue up 69% to $138.5 million, a quarterly best). The Street sees Cactus profits pumping 116% higher this year to $1.92 a share, then another 22% in 2019. Cactus debuted on the NYSE on Feb. 8 and has risen as much as 97% from its $19 a share IPO price. The stock, trading near 33, is building a new base.
IPO Stocks, Social Media And 'Froth'
Michael Bozzello, director of community at the StockTwits social network, says engagement related to IPOs has increased sharply. From May 1 to July 24, the mention of "IPO" appeared 11,565 times across its ticker streams, up 30% from a year earlier. Year to date, StockTwits has seen 25,342 total IPO mentions, up 18% vs. 2017.
"The top three mentions of 'IPO' in order in 2018 were iQiyi (IQ), Spotify (SPOT) and Dropbox (DBX)," Bozzello told IBD. "So while Spotify and Dropbox stole mainstream U.S. media attention for IPOs, $IQ, dubbed the 'Netflix of China,' received double the amount of mentions (1,034) on StockTwits."
Some market observers express concern about Wall Street bankers' enthusiasm to feed new IPOs of companies that are losing money.
Jason Pride, CIO for private client assets at the $40 billion money manager Glenmede in Philadelphia, cited University of Miami research that shows the ratio of new IPO stocks with annual net losses hit 75% in 2017. That's nearly double the historical average of 30%-40%. It mirrors the days of the dot-com bubble that ended in March 2000.
It's not just IPOs that show some "froth," Pride notes, but the greater stock market as well from the POV of small- and midcaps. His team studied the Russell 3000 to find so-called "zombie companies," which for three years in a row do not have enough EBITDA to cover interest rate expenses or to break-even. The ratio stands at 9%, vs. the historical average of 6%.
"We haven't seen that level in the data yet, and our data sets go back to the 1990s," Pride told IBD in an interview. "Investors may be over-rewarding this space of the market. It's occurring in the debt markets and in private equity."
How To Buy IPO Stocks
Many investors long to buy shares at the IPO price set by investment bankers before a stock starts trading on the Nasdaq or New York Stock Exchange. But most individual investors don't have that opportunity. The shares generally are sold to institutional investors like mutual funds and to select individuals who meet criteria set by their broker.
But buying stock before it has established a market trading price would be risky anyhow. Plenty of stocks fall sharply in their NYSE or Nasdaq debut and continue tumbling.
So investing in IPO stocks really means investing in recent IPOs, or even broadening out to vibrant companies that have come public in the last few years.
Veteran investors know that not every new company can make an extraordinary gain the way Google owner Alphabet (GOOGL) did in its first 12 months of action in public markets.
The No. 1 search engine priced its offering in the summer of 2004 at $85, broke out of an IPO-style base at 113.58, and sprinted 179% higher in less than a year.
IPO Stocks: Technical Analysis
It's wise to refrain from buying a new IPO on the day of its debut, or even in the first several days of trade. Instead, let such a stock find a price range over several weeks or months. Avoid those companies that dive below their IPO price; it means institutional investors who got shares in ahead of the IPO are dumping shares with enthusiasm and locking in profits.
Buying such an IPO as it falls in price is akin to catching a falling knife.
As with any stock, using a chart to identify the base, or pattern of price consolidation, will help you make better buy and sell decisions. The basic framework of a good IPO base is actually simple. The decline from peak to low usually doesn't top 20%, but the most volatile markets have produced declines of up to 50%. The length is often less than five weeks and can be as short as seven days. (Learn more about how to recognize a good IPO base.)
Look for companies that show a history of big earnings growth and fast-rising sales. Some will have only recently turned a profit on a quarterly basis. The IBD EPS Rating — which rates the stock's earnings growth on a 1-99 scale against all other stocks — may be low, but such companies shouldn't be ignored. The stock may hit a track of accelerating growth, a key element among the best stocks during bull markets.
Recent IPOs
Eleven IPOs hit the markets the week of July 23, according to Renaissance Capital. Over the past week through Friday, at least three more firms priced their IPOs.
On Wednesday, speaker maker Sonos (SONO) priced its IPO below its target range at $15 a share. But on Thursday, shares sprung sharply above 15 on its debut and finished at 19.91. On Friday, Sonos stock hit a new high of 23.60, racing 57% above its IPO price. The IPO's lead managers included Morgan Stanley, Goldman Sachs, Allen & Co. and RBC Capital Markets.
"It is a top choice for audiophiles, which allows it to command premium pricing," analysts at Renaissance Capital wrote on Wednesday. "Speaking to its loyal customer base, 38% of new product registrations during fiscal 2017 came from existing customers."
In recent weeks, the strongest performers included clean energy power generator Bloom Energy (BE), up 67% on Bloom's first day on the NYSE; Chinese e-commerce platform Pinduoduo (PDD), up 32% on the first trading session on the Nasdaq; and enterprise software firm Tenable (TENB), up 32%.
When Is Uber IPO?
New debuts include real estate service giant Cushman & Wakefield (CWK), which priced its IPO at $17 a share, the midpoint of its preliminary pricing range of $16 to $18, and raised $765 million. The stock finished Thursday's market debut at 17.81, and on Friday it rose as much as 9% to reach a new high of 19.45. Cushman scored $6.92 billion in revenue last year, up 11%. But it lost $1.02 a share.
But if you're watching for the eagerly anticipated IPO debut of Uber, Airbnb or SpaceX, you'll have to wait awhile. None of those IPOs of tech unicorns — young tech companies with market values of over $1 billion — is likely this year.
Lists of leading new stocks, IPOs soon to be priced and prices of recent IPOs can be found in the IPOs section of this site's IBD Data Tables page. A select number also appear on the IPO news and stocks to watch topic page.
Best IPOs Of 2018
Click the symbols below to learn more about each of the IPO stocks. Data as of Aug. 2, 2018.
Company Symbol Market Debut % Change Since IPO price IPO Price Market Value ($Mil)
AGM Group (AGMH) 4/18/2018 198 10 321
Inspire Medical Systems (INSP) 5/3/2018 187 11 970
Huya (HUYA) 5/11/2018 179 51 1,447
Goosehead Insurance (GSHD) 4/27/2018 178 80 378
CLPS (CLPS) 5/24/2018 168 63 172
Solid Biosciences (SLDB) 1/26/2018 151 5 1,401
Zscaler (ZS) 3/16/2018 131 31 4,440
Allakos (ALLK) 7/19/2018 130 4 1,689
DocuSign (DOCU) 4/27/2018 103 30 9,068
nLight (LASR) 4/26/2018 91 76 1,048
Zuora (ZUO) 4/12/2018 85 3 465
Cactus (WHD) 2/8/2018 81 84 880
PlayAgs (AGS) 1/26/2018 80 39 1,087
Pluralsight (PS) 5/17/2018 79 4 1,703
Avrobio (AVRO) 6/21/2018 72 2 786
iQiyi (IQ) 3/29/2018 69 41 10,170
Columbia Financial (CLBK) 4/20/2018 69 44 1,945
Bloom Energy (BE) 7/25/2018 63 37 512
Pivotal Software (PVTL) 4/20/2018 59 34 1,950
Ceridian HCM (CDAY) 4/26/2018 58 59 4,815
Evolus (EOLS) 2/8/2018 56 3 528
Smartsheet (SMAR) 4/27/2018 56 3 2,414
Avalara (AVLR) 6/15/2018 55 12 2,430
Crinetics Pharma (CRNX) 7/18/2018 55 3 598
BJ's Wholesale Club (BJ) 6/28/2018 52 76 3,404
Cardlytics (CDLX) 2/9/2018 46 34 367
Neuronetics (STIM) 6/28/2018 43 7 412
Dropbox (DBX) 3/23/2018 42 42 2,159
Establishment Labs (ESTA) 7/19/2018 41 5 469
Tilray (TLRY) 7/19/2018 40 3 401
Autolus Therapeutics (AUTL) 6/22/2018 40 6 928
Biofrontera (BFRA) 2/14/2018 38 20 303
Aptinyx (APTX) 6/21/2018 38 5 740
EVO Payments (EVOP) 5/23/2018 35 21 367
Americold Realty Trust (COLD) 1/19/2018 35 13 3,080
Sonos (SONO) 8/2/2018 33 2,048
Tenable (TENB) 7/26/2018 33 5 2,735
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List of upcoming IPOs -
https://www.nasdaq.com/markets/ipos/activity.aspx?tab=upcoming
Company Name Symbol Market Price Shares Offer Amount Expected IPO Date
ETON PHARMACEUTICALS, INC. ETON NASDAQ Capital $6 3,000,000 $20,700,000 10/30/2018
ALZHEON, INC. ALZH NASDAQ Global 13.00-15.00 2,500,000 $43,125,000 10/24/2018
LOGICBIO THERAPEUTICS, INC. LOGC NASDAQ Global 12.00-14.00 5,770,000 $92,897,000 10/19/2018
NIU TECHNOLOGIES NIU NASDAQ Global 10.50 -12.50 8,300,000 $119,312,500 10/19/2018
SOLARWINDS CORP SWI NYSE 17.00-19.00 42,000,000 $917,700,000 10/19/2018
SI-BONE, INC. SIBN NASDAQ Global 13.00-15.00 6,000,000 $103,500,000 10/18/2018
VALTECH SE VTEC NASDAQ Global 14.00-16.00 6,666,667 $122,666,672 10/18/2018
PHASEBIO PHARMACEUTICALS INC PHAS NASDAQ Global 12.00-14.00 5,000,000 $80,500,000 10/18/2018
ANAPLAN, INC. PLAN NYSE 13.00-15.00 15,500,000 $267,375,000 10/12/2018
GRAF INDUSTRIAL CORP. GRAFU NYSE $10 22,500,000 $258,750,000 10/12/2018
EQUILLIUM, INC. EQ NASDAQ Global 14.00-16.00 4,670,000 $85,928,000 10/12/2018
DD3 ACQUISITION CORP. DDMXU NASDAQ Capital $10 5,000,000 $57,500,000 10/11/2018
OSMOTICA PHARMACEUTICALS PLC OSMT NASDAQ Global 14.00-16.00 8,300,000 $152,720,000 10/11/2018
LIVENT CORP. LTHM NYSE 18.00-20.00 20,000,000 $460,000,000 10/11/2018
ALLOGENE THERAPEUTICS, INC. ALLO NASDAQ Global Select 16.00-18.00 16,000,000 $331,200,000 10/11/20
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>>> Chinese Telecom Giant Could Dial Up the Biggest IPO Since Alibaba
China Tower could raise up to $10 billion in Hong Kong offering
China Tower says it has nearly 1.9 million sites across mainland China and a national market share of 97% by sales.
China Tower says it has nearly 1.9 million sites across mainland China and a national market share of 97% by sales.
By Joanne Chiu
July 23, 2018
https://www.wsj.com/articles/chinese-telecom-giant-could-dial-up-the-biggest-ipo-since-alibaba-1532346165
The monopoly behind China’s vast network of cellphone towers started marketing what could be the world’s largest initial public offering in four years.
China Tower Corp. wants to raise up to $8.7 billion by selling a quarter of its shares in Hong Kong, according to a term sheet released on Monday. Including an option to sell 15% more stock if demand is strong, the deal could raise as much as $10 billion.
The company says it is the world’s largest telecoms tower provider by revenues and locations, with nearly 1.9 million sites across mainland China and a national market share of 97% by sales. It is raising funds to upgrade and expand its network, and repay debt.
A $10 billion deal would be the world’s largest IPO since Chinese e-commerce giant Alibaba Group Holding Ltd.’s $25 billion New York listing in September 2014.
The listing, which is aimed for Aug. 8, comes as global investors have turned more cautious on Chinese stocks as the trade conflict with the U.S. escalates. Hong Kong’s benchmark Hang Seng Index is down 15% this year from a January peak.
Towering Presence
China's telecom towers company is on course for 2018's biggest initial public offering.
?Sources: Dealogic, China Tower's term sheet?
*Estimated values for uncompleted deals
Note: ?Already listed IPOs include over-allotments.
China Tower* (Hong Kong)
Meituan Dianping* (Hong Kong)
Xiaomi (Hong Kong)
Siemens Healthineers (Frankfurt)
Foxconn Industrial Internet (Shanghai)
However, Steven Leung, an executive director at UOB Kay Hian, said China Tower could be a good way to bet on rapid growth in China’s mobile market. “Some investors might consider switching into China Tower, which is expected to provided higher yields than the Big Three wireless operators,” he said.
The company was created in 2014 by China’s three big telecommunications operators—China Mobile Communication Co., China United Network Communications Corp. and China Telecom Corp—who pooled their towers to cut costs and duplicated investments. The trio own most of its shares.
China Tower’s management told investors it plans to pay out at least half of its earnings as dividends. The company last year reported net profit of 1.94 billion yuan ($286.5 million).
Analysts at Goldman Sachs, one of the banks running the deal, estimate China Tower’s earnings before interest, taxes, depreciation and amortization will increase 11% a year through 2022, according to a report seen by The Wall Street Journal. Ebitda is a measure of profitability commonly used in industries like telecoms that require heavy investment.
Hong Kong recently changed its rules to attract more listings from technology and biotech startups, securing the $4.7 billion debut of smartphone-maker Xiaomi Corp. But China Tower showcases a more traditional strength of the city: serving as a venue where state-backed Chinese companies can raise capital.
China Tower is offering about 43.1 billion shares at an indicative price of HK$1.26 to HK$1.58 a share. That implies a maximum market capitalization of $34.7 billion, before any option to sell extra stock. In comparison, New York-listed American Tower Corp., which has operations from Peru to Nigeria, has a market value of about $62 billion.
Ten large investors agreed to buy US$1.4 billion of stock in the IPO, no matter where in the range it prices. So-called cornerstone investors are a fixture of the Hong Kong IPO market, especially in public-sector deals. This group includes Alibaba Group, China-focused investment firm Hillhouse Capital Group and hedge-fund giant OZ Management, as well as China National Petroleum Corp. and state-backed car maker SAIC Motor Corp.
Frank Xu, an analyst at hedge fund Q Fund Management (Hong Kong) Ltd., said there were questions about China Tower’s pricing power with respect to its three huge customers, and a lack of visibility about dividends.
Mr. Xu said while China Tower wasn’t expensive, he preferred listed units of the wireless operators, such as China Unicom (Hong Kong) Ltd., as ways to bet on the rollout of superfast next-generation mobile networks, dubbed 5G.
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I'd like to know too!
Any other IPOs that interest anyone for the remainder of the year?
>>> Elastic closed 94% up in first day of trading on NYSE, raised $252M at a $2.5B valuation in its IPO
10-5-18
Ingrid Lunden
https://techcrunch.com/2018/10/05/search-company-elastic-pops-90-on-nyse-after-raising-252m-at-a-2-5b-market-cap-in-its-ipo/
When consumers think of search, they mainly think of Google, but under the hood of enterprises and other organizations, there are hundreds of other kinds of challenges that require search technology. Today, one of the bigger companies providing search functionality, Elastic, saw just how valuable that business can be, by way of a very strong debut as a public company. Elastic today opened up at $70, a pop of 94 percent on its initial public offering at $36 on Thursday night, and after an active day of trades, $70 is where it closed, too.
Founded in Amsterdam, Netherlands, but with an office also in Mountain View, Elastic raised $252 million at a market capitalization of around $2.5 billion in that IPO, before commencing trading as ESTC on the New York Stock Exchange.
Its stock went as high as $74.20 today, more than 100 percent over its IPO price. The lowest it went is $66.17/share, evidence of strong demand for shares in the company.
Although Google has long dominated the market for consumer search queries, Elastic has taken the approach of providing a set of strong search tools to organizations to help them both with tackling their own internal data troves, but also to help them build products for their customers to use.
This is no small thing: the tech world is built on big data, and there are absolutely troves of it being created and that goes into making services work, but it’s only valuable if it can be harnessed, controlled and shaped to whatever purpose you need, and that’s where Elastic comes in, covering both customer-facing and internal requirements.
“When you hail a ride home from work with Uber, Elastic helps power the systems that locate nearby riders and drivers. When you shop online at Walgreens, Elastic helps power finding the right products to add to your cart. When you look for a partner on Tinder, Elastic helps power the algorithms that guide you to a match. When you search across Adobe’s millions of assets, Elastic helps power finding the right photo, font, or color palette to complete your project,” the company noted in its IPO prospectus.
“As Sprint operates its nationwide network of mobile subscribers, Elastic helps power the logging of billions of events per day to track and manage website performance issues and network outages. As SoftBank monitors the usage of thousands of servers across its entire IT environment, Elastic helps power the processing of terabytes of daily data in real time. When Indiana University welcomes a new student class, Elastic helps power the cybersecurity operations protecting thousands of devices and critical data across collaborating universities in the BigTen Security Operations Center. All of this is search.”
The company says its portfolio of search products — based on open source and existing under the brand Elastic Stack (which includes Elasticsearch, Kibana, Beats, and Logstash) — have been downloaded over 350 million times since the company launched in 2013 — a mixture of paid and free products.
The strength of Elastic’s message/mission and customer base has been enough to entice investors despite the fact that the company is not profitable.
It has 5,500 customers across over 80 countries and in a wide range of industries, and it posted sales of $159.9 million in fiscal 2018, versus $88.2 million the year before, growth of 81 percent. It is also loss-making. Elastic posted net losses of $52.7 million in FY 2018, with a net loss of $52.0 million the year before, while operating cash flow was negative $20.8 million in FY 2018.
Dutch startups have had a strong little run in the market in the last couple of months. Adyen, the payments company, popped 67 percent when it made its debut in June. For some further context, Elastic had hoped to raise $100 million when it first filed its IPO in September. Overall for the tech IPO market, this is a big bounce back after the lacklustre performance of Funding Circle last week.
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Name | Symbol | % Assets |
---|---|---|
Zoom Video Communications Inc | ZM | 8.95% |
Uber Technologies Inc | UBER | 8.80% |
Coinbase Global Inc Ordinary Shares - Class A | COIN | 6.52% |
CrowdStrike Holdings Inc Class A | CRWD | 6.11% |
Pinterest Inc | PINS | 5.05% |
Peloton Interactive Inc | PTON | 4.73% |
Slack Technologies Inc Class A | WORK | 3.98% |
Avantor Inc | AVTR | 3.00% |
Roblox Corp Ordinary Shares - Class A | RBLX | 2.82% |
Royalty Pharma PLC Class A | RPRX | 2.67% |
Name | Symbol | % Assets |
---|---|---|
Snap Inc Class A | SNAP | 9.20% |
Uber Technologies Inc | UBER | 5.63% |
Marvell Technology Inc | MRVL | 4.69% |
Thermo Fisher Scientific Inc | TMO | 3.36% |
Dow Inc | DOW | 3.27% |
Tradeweb Markets Inc | TW | 2.49% |
Corteva Inc | CTVA | 2.48% |
Keurig Dr Pepper Inc | KDP | 2.48% |
Dell Technologies Inc Class C | DELL | 2.30% |
Corning Inc | GLW | 2.12% |
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