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FACTBOX-Four measures to watch for in Uber’s IPO filing

April 11 (Reuters) – Uber Technologies Inc’s initial public offering (IPO) filing on Thursday will draw inevitable

comparisons to its smaller ride-hailing rival Lyft Inc ,

which completed its initial public listing last month. Following Lyft’s poor stock market performance of late, investors will be scrutinizing Uber’s financial results and projections closely. Not only is Uber much larger than Lyft, but it is also more complex, with operations that go beyond its core ride-hailing business and extend into areas such as food delivery and freight transit. The following are four key financial metrics which investors will be watching for:

REVENUE Uber is a much larger company than Lyft, with operations in markets ranging from the United States to Latin America to North Africa. Lyft operates entirely in North America. Uber also has a broader array of business lines, including a food delivery service and a platform for commercial freight. As a result, Uber clocks much higher revenues than Lyft. Uber reported net revenues of $11.4 billion in 2018. That is in comparison to $2.2 billion for Lyft during the same year. If one considers revenue growth, however, Uber may take a back seat to Lyft. Lyft has been rapidly gaining market share relative to its larger rival, meaning that its revenue growth has been outpacing Uber’s. Lyft’s revenue more than doubled between 2017 and 2018, from just over $1 billion to more than $2.1 billion. Uber’s, meanwhile, grew 43 percent, to $11.4 billion.

ADJUSTED EBITDA This common measure of profitability will look similar to Lyft’s in one major respect: both Uber and Lyft are loss-making companies. Uber reported an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $1.8 billion in 2018, compared to around $950 million for Lyft. But expect Uber to argue to investors that its scale will give it a significant advantage in terms of profitability over the long run, allowing it to more effectively hold down costs. It will also likely point out that its year-over-year losses are down, from $2.2 billion in 2017. Lyft’s ticked up over the same timeframe.

CONTRIBUTION MARGIN This lesser-known financial metric will likely play a big role in Uber’s pitch to investors. It is designed to show whether Uber’s operations in individual markets are profitable on a standalone basis by ignoring company-wide costs like marketing or technology investment. Expect Uber to make a case that positive contribution margins in many of its markets mean that, fundamentally, its business model works. Uber has a different method of calculating contribution margin than Lyft, so the two companies’ figures cannot be directly compared, a person familiar with the matter said.

MONTHLY ACTIVE USERS Uber generates more rides than Lyft in large part due to its wider, global presence. Lyft had 18.6 million monthly active riders as of the fourth quarter of 2018.

(Reporting by Carl O’Donnell in New York, editing by G Crosse)

Source: IPOs
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Asojuegos y FIBA firman acuerdo para capacitar al sector real contra el Lavado de Activos en Colombia


Asojuegos y FIBA firman acuerdo para capacitar al sector real contra el Lavado de Activos en Colombia – Global Investing Today – EIN News






















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IPO Update: Pinterest Finalizes Proposed IPO Plan – Seeking Alpha



Quick Take

Pinterest (PINS) intends to raise $1.2 billion from the sale of its Class A stock in an IPO, per an amended registration statement.

The company operates an online destination for image search, discovery, and curation.

PINS is growing quickly, has excellent future growth prospects, a reasonable IPO valuation, and a clean balance sheet.

Company & Technology

San Francisco-based Pinterest was founded in 2010 to provide a destination site for people interested in reimagining their lives.

Management is headed by co-founder and CEO Ben Silbermann, who was previously at Google (GOOG).

Investors include Bessemer Venture Partners, FirstMark, Andreessen Horowitz, Fidelity, and Valiant and the firm has raised approximately $1.5 billion in private investment to-date.

Below is a brief overview video of a Pinterest use case:

Source: Pinterest

According to management, it views its market as the global advertising market for the CPG and retail industries.

Citing an IDC report, this market is expected to grow from $693 billion in 2018 to $826 billion in 2022.

This represents a CAGR of 5%, which while a moderately low growth rate, is still a very large absolute growth in dollars spent.

Management says its growth strategy is to invest in technical innovations to ‘deepen Pinners’ engagement’ with the service, make Pinterest more ‘shoppable’ by adding ecommerce capabilities directly to the experience, localizing Pinterest to users around the world, and bring high-quality commercial content by partnering with select content creators.

User and Customer Acquisition

Pinterest attracts users through online word of mouth and by enabling easy-to-share information on social media networks.

In 2016, the firm expanded its focus from U.S. users to international audiences and now counts over 250 million users it defines as ‘active.’ Two-thirds of users are female.

PINS has been allowing advertising on the site since 2014 and features large CPG and retail brands that it acquires through a direct sales force to focus on these ‘managed’ accounts.

Additionally, it has built out its online tools for mid-market and unmanaged accounts to use the platform for their advertising efforts.

Sales and marketing expenses as a percentage of revenue have been flat as revenues have increased, as the figures below indicate:

Sales & Marketing

Expenses vs. Revenue

Period

Percentage

2018

34.39%

2017

34.37%

Sources: Company registration statement and IPO Edge

Average Revenue per User has grown markedly in 2018, per the table below:

Average Revenue Per

MAU

Period

ARPM

Variance

2018

$2.85

30.3%

2017

$2.19

Sources: Company registration statement and IPO Edge

Financial Performance

PINS’ recent financial results can be summarized as follows:

  • Continued strong growth in topline revenue
  • Increasing gross profit
  • Decreased gross margin
  • Reduced negative EBITDA and EBITDA margin
  • Reduced cash used in operations

Below are relevant financial metrics derived from the firm’s registration statement:

Total Revenue

Period

Total Revenue

% Variance vs. Prior

2018

$755,932,000

59.9%

2017

$472,852,000

Gross Profit (Loss)

Period

Gross Profit (Loss)

% Variance vs. Prior

2018

$241,584,000

35.2%

2017

$178,664,000

Gross Margin

Period

Gross Margin

2018

31.96%

2017

37.78%

EBITDA

Period

EBITDA

EBITDA Margin

2018

-$74,721,000

-9.9%

2017

-$137,934,000

-29.2%

Cash Flow From Operations

Period

Cash Flow From Operations

2018

-$60,369,000

2017

-$102,913,000

Sources: Company registration statement and IPO Edge

As of December 31, 2018, the company had $122.5 million in cash and $282 million in total liabilities.

Free cash flow during the twelve months ended December 31, 2018, was a negative ($82.5 million).

IPO Details & Valuation Metrics

PINS has filed to raise $1.2 billion in gross proceeds from an IPO of 75 million shares its Class A common stock at a proposed midpoint price of $16.00 per share.

Class A shareholders will be entitled to one vote per share and Class B shareholders will be entitled to twenty votes per share. However, Pinterest may feature a time limit for such voting control concentration.

Multiple classes of stock are a way for management to retain voting control of the company after losing economic control.

The S&P 500 no longer admits firms with multiple classes of stock to its index.

Assuming a successful IPO at the midpoint of the proposed price range, the company’s enterprise value at IPO would approximate $8.3 billion.

Excluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 14.17%.

Management says it will use the net proceeds from the IPO as follows:

We intend to use a portion of the net proceeds from this offering to repay approximately $275.1 million that we expect to borrow under our revolving credit facility prior to the completion of this offering to fund the tax withholding and remittance obligations of approximately $275.1 million related to the RSU Settlement. The tax withholding and remittance obligation amount is based upon the assumed initial public offering price of $16.00 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, assumes that the completion of this offering had occurred on March 31, 2019, assumes all eligible employees elect to have their tax obligations withheld at maximum statutory rates, which will result in an average withholding rate of approximately 48%, and does not include any additional amounts that may be required to satisfy tax withholding and remittance obligations related to the settlement of RSUs for which the service condition was satisfied from April 1, 2019 to the date of this offering.

We also expect to use the net proceeds for general corporate purposes, including working capital and operating expenses.

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are Goldman Sachs, J.P. Morgan, Allen & Co. BofA Merrill Lynch, Barclays, Credit Suisse, Deutsche Bank Securities, Baird, UBS Investment Bank, Citigroup, RBC Capital Markets, and Wells Fargo Securities.

Below is a table of relevant capitalization and valuation metrics:

Measure [TTM]

Amount

Market Capitalization at IPO

$8,469,504,688

Enterprise Value

$8,346,995,688

Price / Sales

11.20

EV / Revenue

11.04

EV / EBITDA

-111.71

Earnings Per Share

-$0.12

Total Debt To Equity

0.32

Float To Outstanding Shares Ratio

14.17%

Proposed IPO Midpoint Price per Share

$16.00

Net Free Cash Flow

-$82,563,000

Revenue Growth Rate

59.87%

Sources: Company Prospectus, IPO Edge

Expected IPO Pricing Date: April 17, 2019.

An enhanced version of this article on my Seeking Alpha Marketplace research service IPO Edge includes my full commentary and opinion on the IPO.

Members of IPO Edge get the latest IPO research, news, and industry analysis. Get started with a free trial!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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“ipo” – Google News


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Uber plans to sell around $10 billion worth of stock in IPO – CNBC

Uber Technologies has decided it will seek to sell around $10 billion worth of stock in its initial public offering, and will make public the registration of the offering on Thursday, people familiar with the matter said on Tuesday.

An IPO of this size would make Uber one of the biggest technology IPOs of all time, and the largest since that of Chinese e-commerce giant Alibaba Group Holding in 2014.

Uber is seeking a valuation of between $90 billion and $100 billion, influenced by the poor performance of smaller rival Lyft‘s shares following its IPO late last month, the sources said. Investment bankers previously told Uber it could be worth as much as $120 billion.

Uber most recently was valued at $76 billion in the private fundraising market.

Most of the shares sold would be issued by the company, while a smaller portion would be owned by Uber investors cashing out, one of the sources said.

Uber plans to make its IPO registration with the U.S. Securities and Exchange Commission publicly available on Thursday, and will kick of its investor roadshow during the week of April 29, putting it on track to price its IPO and begin trading on the New York Stock Exchange in early May, the sources said.

The sources cautioned that the plans are still subject to change and market conditions, and asked not to be identified because the matter is confidential.

A representative for Uber declined to comment.

Lyft’s IPO priced at the top end of its upwardly revised range last month, assigning it a valuation of more than $24 billion in an offering that raised $2.34 billion. But the stock has traded poorly since debuting on the Nasdaq on March 29, as concerns about the startup’s path to profitability have become more prominent. The shares ended trading on Tuesday at $67.44, well below their $72 IPO price.

In moderating its valuation expectations, Uber is showing a realism that is being increasingly adopted by Silicon Valley unicorns, as stock market investors push back against some of the lofty price tags sought.

On Monday, Pinterest set a price range for its IPO that values it below the $12 billion at which the online image-search company sourced its last private fundraising in 2017.

Uber operates in more than 70 countries. In addition to ride-hailing, its business includes bike and scooter rentals, freight hauling, food delivery, and an expensive self-driving car division.

During the IPO roadshow, Uber’s chief executive, Dara Khosrowshahi, will be tasked with convincing investors that he has successfully changed the company’s culture and business practices after a series of embarrassing scandals over the last two years.

Those have included sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas.

Uber last year had revenue of $11.3 billion, while gross bookings from rides was $50 billion. But the company lost $3.3 billion, excluding gains from the sale of its overseas business units in Russia and Southeast Asia.

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“ipo” – Google News


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5 founders weigh in on the highs and lows of the IPO – Fast Company

Entrepreneurs pour massive amounts of time and energy into building a team, developing new products, creating a culture, and raising money to reach what many consider “the big milestone:” an initial public offering.

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Every founder who went through an IPO can agree that “ringing the bell” to open the trading day at Nasdaq or on the NYSE feels surreal. But the public rarely gets a look behind the curtain to see what happens in the days and months leading up to the big event and in the very public quarters that follow. This week on Zero to IPO, we spoke with five entrepreneurs about the IPO, the value in going public, and what the journey taught them about how they can run a business better. Here’s what we learned:

1) Don’t obsess over the one thing that isn’t working

Josh James, the founder of Domo and cofounder of Omniture, took both of his companies public. Neither of those IPOs went according to plan. Both times, he faced numerous roadblocks—from people underestimating him because he was a young CEO and negative media attention during the quiet period to investors who struggled to understand his business model.

After taking Domo public (his second IPO), it was hard for James to focus on anything except what had gone wrong. He also thought a lot about not meeting his employees’ expectations. However, a trip to Sun Valley following the IPO changed his perspective. He talked to CEOs who praised him for making it through the IPO—no matter the outcome. He realized then that he had, in fact, hit a significant milestone, and generated tremendous value for Domo. Despite setbacks along the way and hard work ahead, James had acquired a valuable tool kit for the future by going public—including access to capital for strategic transactions and increased recognition for recruiting.

2) It’s not a one-day deal

Right before Fred Luddy, the founder of ServiceNow, took his company public, Facebook had their IPO. Facebook stock did so poorly at first that people began referring to the IPO as “Faceplant.” On the roadshow, Luddy found that he had to justify the company’s value proposition to skeptical analysts who had just been burned in one of the most anticipated tech IPOs in recent history.

Despite the Faceplant pain (and a challenging environment), the team remained confident in the business’s ability to perform over the long-term and focused on the strategic benefits they would gain as a public company. After a somewhat stressful road show, it all worked out when the stock ultimately started trading. ServiceNow priced the IPO at $18 per share, opened trading at $23, and finished the day up over 30%.

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I often say “it’s not about going public; it’s about being public.” As Luddy’s story shows, playing the long game is a mature approach and ultimately the most successful way to create long-term value for customers.

3) Extract as much value from the process as possible

Julia Hartz, the cofounder of Eventbrite, compares the amount of work that goes into an IPO process to the work that went into planning the wedding in “My Big Fat Greek Wedding.” Just like that event, the journey to IPO is expensive, filled with conflicting opinions, and extremely time-consuming.

Considering the amount of energy Hartz knew she had to dedicate to the IPO, she wanted to extract the most value out of the process as possible. So, when she put pen to paper on the S-1, she thought of it as a way to codify the Eventbrite story and define the mid-market for the first time. During the drafting process, she unearthed stories of event creators and used them to amplify the Eventbrite brand and illuminate these influential entrepreneurs’ journeys. When founders maintain a level of intention behind each step of the IPO process, they’ll be better at defining their company’s mission along the way.

4) Sometimes, a smart long-term decision means ignoring the market

Shortly after Ben Horowitz took LoudCloud public, he needed to raise $50 million quickly, while the business was burning cash even faster. To make matters worse, a large, thus-far reliable customer suddenly called to announce that they were bankrupt and would be leaving LoudCloud on the hook for $25 million, meaning Horowitz now actually needed to raise $75 million. This would be a frightening situation for any company, but since LoudCloud was a public company, he needed to update the market on these developments.

Predictably, the market wasn’t thrilled, and the stock plummeted. Facing an imminent bankruptcy of his own, Horowitz orchestrated a creative solution to sell the company’s services business and eliminate the major source of cash burn. This worked, but the stock had lost over 90% of its value by the time he completed the transaction. However, his conviction in the business paid off when he ultimately sold the company for over 40x that value.

At times, a public company’s management team has to ignore the market’s relentless short-term focus to favor necessary longer-term strategic decisions.

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5) Going public can validate your business and provide transparency

Aneel Bhusri, CEO and cofounder of Workday and advisory partner at Greylock Partners, felt a massive sense of relief after Workday’s IPO. He also experienced a halo effect of the IPO that resulted in an array of new Workday customers, including those that may not have signed on before it was a public company.

After the IPO, Bhusri could target a new set of customers in traditionally risk-averse verticals like financial services that only wanted to bet on a company they knew they could trust for the long run. These prospective customers viewed the IPO as the necessary “stamp of approval” to engage with Workday. Being a public company enables businesses to provide greater transparency and insight into financial health, taking away previous risk factors and resulting in new customer buy in.

The massive milestone of the IPO is impactful for everyone involved, from your employee base and investors to your customers. While many companies today stay private later and longer, there’s significant value in taking a company public. However, there’s also no one-size-fits-all answer of whether or not to do so and when to do it. Management teams need to make sure that they have a validated, predictable business with a strong strategic vision, enough stability to withstand the scrutiny of public markets, and the resilience to face the inevitable difficulties of the IPO process and running a public company.


Frederic Kerrest is the COO and cofounder of Okta. You can listen to the full episode, “IPO,” wherever you get your podcasts. Tune into Zero to IPO every Tuesday, and check back here each week to read more about the insights on each episode.

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“ipo” – Google News


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PagerDuty raises IPO price range – Business Insider

IT unicorn PagerDuty raised its IPO price range Tuesday to $21 to $23 per share, up $2 from the figures it had originally reported when it filed to go public.

This throws some cold water on concerns that Lyft’s unstable tenure as a public company may bring the whole IPO market down.

PagerDuty, which is run by CEO Jennifer Tejada, is expected to start trading Thursday on the New York Stock Exchange under the ticker PD.

At the high end of this range, the company would have a market cap of $1.69 billion at its IPO. The company was last valued at $1.3 billion after raising $90 million in Series D funding in the fall.

If PagerDuty prices at $23, the company could raise a total of $240 million, assuming the underwriting banks buy their allotments in full.

Read more: Harvard researchers say that Lyft investors will likely come to regret giving the cofounders so much control with so little stock

PagerDuty’s listing is expected nearly two weeks after Lyft went public far above its initial price range in the first big tech IPO of the year.

Though its debut was successful, Lyft spent the following week trading below its opening price on the public markets. The ride-hailing company initially priced between $62 and $68, before raising its range and going public at $72 per share. After market close on Tuesday, Lyft traded st $67.37.

Like PagerDuty, IPO candidate Zoom was not deterred by Lyft’s crash. On Monday, the video conferencing company priced its IPO at $28 to $32 per share, which could give the company a valuation of $8.35 billion on the high end of its range. Zoom is expected to start trading next week.

Here’s what you need to know about Jumia, the Alibaba of Africa that’s getting ready to IPO on the New York Stock Exchange

JPMorgan and Credit Suisse will get paid almost equal amounts for helping take Lyft public, and it’s part of a growing trend for IPO fees

Pinterest’s IPO structure could give CEO Ben Silbermann the right to control the company from beyond the grave

Lyft’s bankers are trying to compare the ride-hailing app to Grubhub and luxury retailer Farfetch — here’s their pitch to investors

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“ipo” – Google News


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Why Pinterest’s set IPO price may worry tech investors – The Washington Post

Pinterest has set an IPO range that values the networking site at as much as $11.3 billion — a lower valuation than it had two years ago and a potential concern to investors.

The company, which allows users to discover images for cooking, fashion and design, expects to sell 75 million shares for $15 to $17 apiece, according to a filing Monday with the Securities and Exchange Commission. The initial public offering, expected next week, could raise as much as $1.2 billion.

The high end of the IPO range, including stock options and restricted stock, values the company at $11.3 billion. That number stood at $12 billion in 2017, after its last private funding round. The decline might worry investors and chill demand for tech stocks as other Silicon Valley companies move closer to their IPOs.

“There is a stigma attached to coming to market with a down round, whether it’s in the private market or the public market, because it undermines confidence,” said Nicole Tanenbaum, chief investment strategist at Chequers Financial Management. “This has certainly changed the landscape and created some concern for the future tech IPOs to come.”

Lyft’s volatility since its March 29 debut has affected the psychology of investors, who see a company struggling to sustain its valuation, Tanenbaum said. A central criticism of many of the “unicorns” — privately held tech companies valued at $1 billion or more — is that their massive valuations do not yet translate into profit. “The biggest concern now is what does the investor appetite look like,” she said. “We are coming back down to earth a little bit from when Lyft IPO’d in March.”

The Lyft and Pinterest scenarios highlight the disconnect between private and public valuations, said Kathleen Smith, a principal at Renaissance Capital. In the past, companies typically saw their valuations grow as they transitioned from private financing to the public market. But companies are now staying private longer and have access to larger pools of private capital, she said. In some cases, private valuations fail to justify themselves, as newly public companies see their stock prices and market caps flounder.

Pinterest counts more than 250 million monthly active users and reported annual revenue of more than $755 million in 2018; that is a nearly 60 percent gain from the year before. Though it is still unprofitable, it has reined in net losses: $63 million in 2018 vs. $130 million in 2017.

The company will list on the New York Stock Exchange under the symbol “PINS.”

Pinterest is among a host of highly anticipated IPOs, testing investors’ appetites as the tech industry faces increasing regulatory scrutiny and as economic experts express fears of a coming downturn. IPOs are expected from Airbnb, WeWork and Palantir, but two of the most closely watched are Uber and Lyft.

Lyft, the first of the two ride-hailing companies to go public, saw its stock surge nearly 25 percent after it debuted on the Nasdaq at $72. But shares plummeted on the second day of trading and are now hovering below the IPO price. With an IPO valuation of $24 billion, much of the company’s worth is tied up in promises to deliver industry-transforming technology. Within five years, Lyft plans to begin offering self-driving trips through its app.

Uber, which also has amassed tremendous wealth on plans to revolutionize how people get around, is expected to go public in the coming months. As with Lyft and other technology companies known for their staggering revenue and user numbers but lack of profitability, Uber’s market debut will come with increasing demands to cut losses.

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“ipo” – Google News


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IHeartMedia Starts IPO Effort – Seeking Alpha



Quick Take

iHeartMedia (IHRT) intends to raise $100 million in an IPO of its Class A common stock, according to an S-1 registration statement, although the final figure may be much higher.

The firm operates an online radio station and audio streaming service worldwide.

IHRT is emerging from bankruptcy, separating from its Clear Channel subsidiary, and will have significant debt to pay down with the IPO proceeds.

I’ll provide an update when we learn more details about IPO assumptions.

Company

San Antonio, Texas-based iHeartMedia was founded in 2001 to provide offline and online advertising opportunities through radio broadcast and streaming technologies.

Management is headed by Chairman and CEO Bob Pittman, who has had a long career in the media industry and investment industry through his investment firm Pilot Group.

Below is a brief overview video:

Source: iHeartMedia Milwaukee

IHRT also seeks to augment its efforts through offline events which serve to improve its brand recognition with listeners and content producers.

Users

The firm currently claims a monthly reach of 275 million listeners in the U.S., with listeners spending an average 30 minutes per day on its programming.

IHRT generates content via its portfolio of 848 broadcast radio stations.

More recently, management has been acquiring non-radio assets such as streaming podcast technologies in order to build out its offerings in that growing segment.

Selling, G&A expenses as a percentage of revenue have been stable in recent years, as the figures below indicate:

Selling, G&A

Expenses vs. Revenue

Period

Percentage

2018

37.90%

2017

37.53%

Sources: Company registration statement and IPO Edge

The sales efficiency rate, defined as how many dollars of additional gross profit are generated by each dollar of sales & marketing spend in the previous period, was a reasonably good 1.9x in the most recent year, as shown in the table below:

Selling, G&A

Efficiency Rate

Period

Multiple

2018

1.9

2017

Sources: Company registration statement and IPO Edge

Market & Competition

According to a mid-year 2017 report by the RIAA as cited in a Billboard analysis, the U.S. streaming industry grew by 50% in the number of subscribers through June 30 vs. 2016.

Total digital revenue was $3.2 billion for 1H 2017, up 48% over the previous year’s period.

Additionally, subscription revenues increased by 61%, while ad-supported revenues increased only 37%.

The RIAA cited the comparatively low advertising revenue growth as problematic for its music creator members since they receive differing royalty amounts depending on the type of revenue stream.

As smartphone use becomes widespread and wireless networks more capable, the ability to distribute streaming music is expected to continue to increase into new markets worldwide.

Major competitive vendors that provide music streaming services include:

  • Apple Music (AAPL)
  • Amazon Prime (AMZN)
  • Google Play Music (GOOG) (NASDAQ:GOOGL)
  • Spotify (SPOT)
  • Deezer
  • Joox
  • Pandora (P)
  • SoundCloud

In addition, the firm competes with Internet radio services such as LastFM and SiriusXM (SIRI). Terrestrial radio stations are also competitors.

Financial Performance

IHRT’s recent financial results, on a pro forma, post-separation from its Clear Channel unit, can be summarized as follows:

  • Slightly growing topline revenue
  • Small increase in gross profit
  • Stable gross margin
  • Reduced operating margin
  • Swing to large positive cash flow from operations

Below are relevant financial metrics derived from the firm’s registration statement:

Total Revenue

Period

Total Revenue

% Variance vs. Prior

2018

$3,611,031,000

0.7%

2017

$3,586,647,000

Gross Profit (Loss)

Period

Gross Profit (Loss)

% Variance vs. Prior

2018

$2,539,968,000

0.5%

2017

$2,527,524,000

Gross Margin

Period

Gross Margin

2018

70.34%

2017

70.47%

Operating Income

Period

Operating Income

Operating Margin

2018

$513,580,000

14.2%

2017

$700,782,000

19.5%

Cash Flow From Operations

Period

Cash Flow From Operations

2018

$966,672,000

2017

-$491,210,000

Sources: Company registration statement and IPO Edge

Free cash flow during the twelve months ended December 31, 2018, on a pro forma basis, post-separation from Clear Channel subsidiary, was $670.3 million.

IPO Details

IHRT has filed raise $100.0 million in gross proceeds from an IPO of its Class A common stock, however, the final amount will likely be much higher.

Multiple classes of stock are typically a way for senior management or existing shareholders to retain voting power in the event of losing economic control of the company.

The S&P 500 Index no longer admits firms with multiple classes of stock into its index.

Management says it will use the net proceeds from the IPO as follows:

We intend to use the net proceeds from this offering to repay indebtedness.

Management’s presentation of the company roadshow isn’t available yet.

Listed bookrunners of the IPO are Goldman Sachs and Morgan Stanley.

Expected IPO Pricing Date: To be announced.

An enhanced version of this article on my Seeking Alpha Marketplace research service IPO Edge includes my full commentary and opinion on the IPO.

Members of IPO Edge get the latest IPO research, news, and industry analysis. Get started with a free trial!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

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“ipo” – Google News


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Pinterest IPO Price Puts Some Investors Underwater – Fortune

The three founders of the online ideas board known as Pinterest are expected to become millionaires after the company goes public later this month—and some early investors are also poised to profit.

But not everyone.

On Monday, Pinterest revealed that shares would likely be priced between $15 to $17 apiece—valuing Pinterest at as much as $11.3 billion. An impressive figure—but not for those that bought into the company in 2017 at a $12.3 billion valuation.

Based on Pinterest’s IPO filing, some investors including Goldman Sachs, Kleiner Perkins, the Vanguard Group, and John Hancock Investments first acquired their stakes in the online pin-board maker during the Series G and Series H funding rounds—at a time when shares were valued at $21.54 each, filings say. If the IPO prices at the upper end of the range, that would still be 25.7% below what those firms paid, according to SEC filings and investor information from PitchBook.

Vanguard for example reports in its most recent filing from the fourth quarter that it holds 1.7 million shares of Pinterest across two funds. That stake is now worth roughly $27.5 million, compared to the $37 million it would have been worth at Pinterest’s Series G round, when Vanguard first made its investment.

In comparison, very early investors such as Bessemer Venture Partners and Andreessen Horowitz, who first invested in Pinterest roughly a year after the first prototype was launched, paid about 17 cents and 72 cents a share respectively for their stakes in the firm. Both venture funds have board seats at Pinterest, and based on PitchBook data, also added to their stakes as the firm’s valuation grew. Fidelity also purchased 1.4 million shares in 2007 at $21.54 each, well above the IPO valuation.

“The proposed pricing of the Pinterest IPO below its private valuation is further evidence that valuation excesses exist in the private market thanks to an unprecedented inflow of capital compared to the more rationale public markets,” said Kathleen Smith, principal at Renaissance Capital.

Vanguard and Goldman Sachs declined to comment. John Hancock, and Kleiner Perkins did not respond to immediate requests for a statement.

No matter what price these investors paid, they do have something valuable: Shares that give them some ability to vote. Their pre-IPO convertible preferred stock will convert into Class B shares upon the company’s IPO. This class of shares have 20-to-1 voting ratio compared to the Class A shares currently being marketed to buyers.

And for Goldman Sachs, there’s another silver lining. The bank is one of three lead underwriters of Pinterest’s IPO and will be the ‘stabilization agent’—in charge of steadying trading in Pinterest when it debuts, Bloomberg reports. According to PwC, IPO underwriting fees generally are equal to about 4-7% of gross proceeds.

There may still also be reprieve for others who bought Pinterest shares high. Pricing an IPO is not a science, and those targets often move several times before the actual offering. Moreover, companies going public are often priced to “pop” during their first day on the market, a move designed to generate positive buzz. In 2018, IPOs rose 15.7% on average during their first day of trading, according to data from Renaissance Capital.

Investors will have to wait to see if PINS (Pinterest’s ticker) follows suit.

Source:

“ipo” – Google News


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