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The top tech IPOs this year have outperformed the S&P 500, despite Uber and Lyft – CNBC

Ethan Brown, founder and chief executive officer of Beyond Meat, center, celebrates with his wife Tracy Brown, center left, and guests during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, on Thursday, May 2, 2019.

Michael Nagle | Bloomberg | Getty Images

Based on the terrible public market performance of Uber and Lyft, you might think it’s been a bad year for tech IPO investors.

But if you treat every offering equally, IPOs have been a lucrative bet.

Looking at a basket of 13 venture-backed tech IPOs this year, including Slack’s direct listing, eight stocks are in the black. If you’d put $1 million into each of them at the IPO price, your $13 million initial investment would be worth $21.7 million — a 67% gain. That calculation follows the debut of cloud security company Cloudflare, which jumped 20% in its first trading day on Friday.

If instead of putting $1 million into every IPO, you’d invested $13 million into the S&P 500 at the beginning of the year, you’d be up 20% at $15.6 million.

All that helps explain why venture capitalist Bill Gurley told CNBC this week that “Silicon Valley has been on the bad end of a bad joke for about four decades now, in terms of the way the traditional IPO process works.” Most of the gains come from the immediate IPO pop, meaning companies are giving away upside to new investors.

There are many caveats to comparing this year’s IPO investments to the S&P 500. Most notably, this methodology doesn’t factor in market cap but just assumes an equal investment in every company. Also, most of the offerings haven’t hit their lock-up expiration yet. In the coming months, a flood of new shares will hit the market, potentially pushing some of these stocks downward.

The biggest qualification, however, is that to beat the S&P 500 with these IPOs, you’d need to have Beyond Meat, a food company backed by venture firms, in your tech portfolio. Shares of the plant-based meat alternative company are up 524% since their market debut in March and on a total dollar basis would account for 60% of the gains.

The next best performer is videoconferencing company Zoom, up 120%, followed by security vendor CrowdStrike, up 91%. The biggest laggard is Lyft, down 36%, followed by Uber, which is off 26% and e-commerce company RealReal, down 15%. Slack has plunged 21% in the past seven trading days, leaving the stock 6% below the reference price for its direct listing in June.

Here’s a list of 13 venture-backed tech IPOs and how they’ve performed since hitting the market:

WATCH: Gurley on IPOs

Source:

“ipo” – Google News


Author: Continue reading The top tech IPOs this year have outperformed the S&P 500, despite Uber and Lyft – CNBC

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How Beyond Meat’s stock surged 500% in 2019

On their first trading day in May 2019, shares of Beyond Meat soared 163%.

It was the best performance for an IPO in nearly two decades.

At one point in 2019, Beyond Meat was bigger than 25% of companies in the S&P 500.

Beyond Meat shares rode a perfect storm. Beyond Meat was the first company that only produces alternative meat to go public. It has recently solved production issues. And investors were hungry for growth.

The alternative meat industry is expected to become a $140 billion industry in the next decade. That means it’s about to get a lot more crowded. Can Beyond Meat’s stock continue its epic run?

Beyond Meat declined comment about the company’s valuation when asked by CNBC.

Watch the video above to learn how Beyond Meat became the hottest stock of 2019.

Source: IPOs
Author: Continue reading How Beyond Meat’s stock surged 500% in 2019

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Gladstone Land Corporation Passes 50% Mark for Series B Preferred Stock Offering


Gladstone Land Corporation Passes 50% Mark for Series B Preferred Stock Offering – Global Investing Today – EIN News




















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Author: Continue reading Gladstone Land Corporation Passes 50% Mark for Series B Preferred Stock Offering

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7 Recent IPO Stocks That Are Melting Down – Yahoo Finance

Give me a break.

These companies are largely not profitable, are burning cash badly and have been focused on razzle-dazzle more than anything. Now, these recent IPO stocks are filtering under the intense scrutiny that the public markets bring. Here are seven that are suffering.

Lyft (NASDAQ:), the provider of an instant messaging system for corporate settings (which is basically a huge time waster) are in a post-IPO free fall, down nearly 40% from the post-IPO high. Worries are surrounding the company, likely due to competitive pressure from Microsoft (NASDAQ:), the music service that had a unique direct listing IPO with lots of hype, is once again trading below its 200-day moving average and is down more than 30% from its all-time high as investors continue to worry about competitive pressures from the likes of Amazon (NASDAQ:), another gig-economy icon, is watching in horror as its share price continues to drop after reaching a post-IPO high of more than $44. As the job market tightens and the freelance economy loses its luster, FVRR stock has fallen by more than 50%. The company will next report results on Nov. 11. Analysts are looking for a loss of 19 cents per share on revenues of $26.1 million.” data-reactid=”113″>Fiverr (NYSE:), a developer of cloud-based security systems that protects corporations and was founded by former McAfee employees, is seeing its share price drift down to its post-IPO lows. The company will next report results on Dec. 5 after the close. Analysts are looking for a loss of 12 cents per share on revenues of $118.9 million. Concerns center on the company’s lack of profitability and trying valuations.” data-reactid=”132″>CrowdStrike (NASDAQ:), which went public back in 2017, continues to languish badly as investors realize the company lacks pricing power and is under constant threat of attack from Amazon’s efforts in the fashion space. The company will next report results on Oct. 1 after the close. Analysts are looking for earnings of 4 cents per share on revenues of $432.4 million. Keep an eye on active client growth, which turned lower.” data-reactid=”151″>The clothes-in-a-box purveyor Stitch Fix (NASDAQ:SFIX), which went public back in 2017, continues to languish badly as investors realize the company lacks pricing power and is under constant threat of attack from Amazon’s efforts in the fashion space. The company will next report results on Oct. 1 after the close. Analysts are looking for earnings of 4 cents per share on revenues of $432.4 million. Keep an eye on active client growth, which turned lower.

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7 Recent IPO Stocks That Are Melting Down appeared first on InvestorPlace.” data-reactid=”159″>The post 7 Recent IPO Stocks That Are Melting Down appeared first on InvestorPlace.

Source:

“ipo” – Google News


Author: Continue reading 7 Recent IPO Stocks That Are Melting Down – Yahoo Finance

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Cloudflare Stock Soars in Latest Cloud-Software IPO – Barron’s


Photograph by Thomas Jensen

There’s nothing investors like more right now than a new cloud-software company. They got one on Friday with the public market debut of
Cloudflare
.

The San Francisco-based company, which provides security, content delivery, and other services to more than 20,000 web and internet businesses, priced an offering of 35 million shares at $15 apiece. In afternoon trading, the stock was changing hands at $18.05, a pop of about 20%.

After the offering, the company has 293.3 million shares outstanding, giving it a market capitalization of about $5.3 billion.

The deal was co-led by
Goldman Sachs Group

(GS),
Morgan Stanley

and
JPMorgan Chase
.

According to the initial public offering prospectus,
Cloudflare

had revenue of $129.2 million in the first six months of this year, up 48% from a year earlier, with a loss of $36.8 million. For 2018, the company posted revenue of $192.7 million, up 42%, with a loss of $87.1 million.

Cloudflare had raised $332.1 million in venture capital, according to Crunchbase. The largest institutional investors in the company after the offering include NEA, with an 18% stake; Pelion Venture Partners, with 16.5%; Venrock, with 14.2%; and Fidelity Investments, 4.9%.

Chairman and CEO Matthew Prince holds 12.9% of the stock, a stake worth close to $700 million. Note that the company opted for a dual-class share structure, with insiders holding supervoting Class B shares. Holders of Class B shares together control more than 96% of shareholder voting power.

In a letter to investors in the prospectus, Prince and COO Michelle Zatlyn say that since it was founded in 2010, the company has been intent on “helping to build a better Internet,” with “the suite of cloud services we anticipated customers would demand as they looked to replace their on-premise, hardware-based network appliances.”

They concede that their business is a little hard to explain simply.

“We provide security products like firewall and access management, performance products like intelligent routing, and reliability products like vendor-neutral load balancing—all as a service, without customers needing to install hardware or change their code,” they write. “We also have functions that play supporting roles to the products we sell. For example, we built one of the fastest, most reliable content delivery networks, not because we were targeting the CDN market, but because we knew caching was a necessary function in order to efficiently deliver our core products. We built the world’s fastest authoritative domain name services, not to sell DNS, but to deliver service levels we knew our customers needed.”

Cloudflare became the subject of widespread scrutiny earlier this summer for providing services to 8chan, a message-board site that became popular with violent extremists. In a blog post in August, Prince explained why the company removed 8chan from the Cloudflare platform, after first declining to do so.

“The rationale is simple: they have proven themselves to be lawless and that lawlessness has caused multiple tragic deaths,” he wrote. “Even if 8chan may not have violated the letter of the law in refusing to moderate their hate-filled community, they have created an environment that revels in violating its spirit.”

The company’s general approach is to “reluctantly tolerate content that we find reprehensible, but we draw the line at platforms that have demonstrated they directly inspire tragic events and are lawless by design,” he said. “8chan has crossed that line. It will therefore no longer be allowed to use our services.”

The company is often compared with
Fastly

(FSLY), a company about half the size that does position itself as a content delivery network, but with other services, such as security, layered on top.

Fastly went public in May at $16 a share.The stock has been trading wildly in recent weeks, no doubt influenced by new interest in the group as Cloudflare’s IPO neared. On Friday, it was down $2.46, or 8.2%, to $27.61, not a huge move for an extremely volatile stock.

Fastly trades for about 12 times projected 2019 revenue. If you assume the same rate of growth for Cloudflare in the second half of the year as it achieved in the first half, the company would report revenues of about $285 million, for a valuation of about 18 times estimated revenue.

Write to Eric J. Savitz at eric.savitz@barrons.com

Source:

“ipo” – Google News


Author: Continue reading Cloudflare Stock Soars in Latest Cloud-Software IPO – Barron’s

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The IPO market is heating up but investors are shunning unprofitable companies – CNN

Online braces seller SmileDirectClub’s disastrous debut on Thursday doesn’t help matters. The company’s shares plunged more than 25% in their initial public offering, although SmileDirectClub (SDC) did rebound a bit Friday. It too is losing money.
That could be bad news for companies like We Company, the owner of WeWork, which has racked up a staggering amount of losses and has faced criticism of its corporate governance structure.
We Company plans to list its shares on the Nasdaq sometime within the next few weeks, even though it reportedly may be forced to slash its valuation by more than half to perhaps as low as $10 billion. Japanese tech giant SoftBank, the largest investor in We Company, is also said to have urged the coworking space firm to delay its IPO.
The buzzy cycling equipment and streaming fitness services company Peloton Interactive is set to debut as well.

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Peloton’s sales have soared but losses are spinning out of control, hitting nearly $246 million in its latest fiscal year, up from $48 million a year earlier.

Investors should be wary of unprofitable unicorns

That skepticism could be a good sign, says Doug Peta, chief US investment strategist at BCA Research. It shows that investors are not in the midst of a mania like they were in the late 1990s, when many dot-com companies that had little in the way of revenue, let alone profits, were going public and more than doubling on their first day of trading.
“We Company should try to be as profitable as possible. I’m not sure how elevating the world’s consciousness fits into that framework. It seems awfully new age-y to me,’ Peta said, referring to the company’s derided mission statement in its IPO filing.
“It’s a good sign that investors are pushing back on such a grandiose and somewhat amorphous business plan. This shows it’s not 1999. People have not taken leave of their senses,” he added.
Uber and Lyft both hit all-time lows and continue to struggle since their IPOs
Some of the more successful companies that have gone public over the past few years are either already profitable or expected to generate actual earnings later this year and in 2020. That includes e-signing software company Docusign (DOCU), web conferencing firm Zoom Video (ZM) and plant-based food leader Beyond Meat (BYND).
Many of the money-losing companies looking to go public now could struggle because investors are more discerning and are looking for profits, noted Alan Adelman, senior fund manager with Frost Investment Advisors.
“There has been a shift from growth stocks to more value stocks,” Adelman said. “Some of the recipients of the go-go growth trade have had the wind taken out of their sails.”

Google and Facebook were already profitable when they went public

The big drops in Uber, Lyft and Slack are evidence of that trend. Longer-term investors are realizing it may be too soon to take a flier on some of these startups since there is no sign that they will be able to generate profits in the foreseeable future.
But companies like Uber and Slack may be more similar to the scores of dot-coms that debuted in 1998 and 1999, as opposed to Google owner Alphabet (GOOGL) and Facebook (FB), for example.
While there were concerns about corporate governance at both of those companies at the times of their IPOs, Google and Facebook were also undeniable market leaders in their industry when they went public. And both were profitable.
So while Google shares didn’t skyrocket on their first day and Facebook’s even fell in their first few months as investors worried if the company would successfully transition to a more mobile-focused strategy, each stock has soared in the past few years and are both now among the world’s most valuable companies.
WeWork, Uber and Slack have a lot to prove before any of them will be able to join the ranks of the FAANG club.

Source:

“ipo” – Google News


Author: Continue reading The IPO market is heating up but investors are shunning unprofitable companies – CNN

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J. Crew’s Madewell brand files to go public

Source: Madewell

J. Crew will spin off its fast growing denim brand Madewell, according to a Friday filing with the SEC.

The company said Chinos Holdings, its subsidiary, will be renamed Madewell before its initial public offering. The company did not disclose the size of the offering or its target price range.

The denim brand said it plans to use the money raised in its IPO “to repay indebtedness and for general corporate purposes.”

Madewell reported $614 million in 2018 revenue, according to the filing. The company said that 87% of its sales are direct to consumers.

Madewell is the crown-jewel of parent company J. Crew, which has continued to struggle with declining sales. For the second quarter, J. Crew reported a net loss of $44.2 million, compared to the $6.2 million loss a year ago. Its namesake brand reported that sales declined nearly 7% year over year to $399.1 million. Madewell, however, reported that sales grew almost 15% to $139.7 million in the same period — or about 24% of the parent company’s revenue for the quarter.

Madewell, known for its popular denim lines and chic universal basics, has a smaller brick-and-mortar footprint than the J. Crew brand. The brand said it had 132 stores as of Aug. 3, compared with J. Crew’s 365 locations. Madewell said its e-commerce sales represented 40% of its direct-to-consumer revenue in the first half of fiscal 2019.

J. Crew has been reportedly exploring multiple options to turn around its struggling business, including spinning off Madewell. Earlier this year, Reuters reported that J. Crew hired restructuring lawyers to explore options to rework its $1.7 billion debt load.

Source: IPOs
Author: Continue reading J. Crew’s Madewell brand files to go public

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How Beyond Meat became the hottest stock of 2019

9 Hours Ago

On its first trading day, Beyond Meat’s stock price surged 163 percent. The hype around the stock continued to push it higher in the following months. Year-to-date returns hit 850 percent at one point. Here’s a look at what’s behind an IPO valuation and what’s next for investors looking to own some shares of the next big IPO.

Source: IPOs
Author: Continue reading How Beyond Meat became the hottest stock of 2019

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Why Harness Wealth’s founder says WeWork’s IPO valuation slashed below $15B is ‘an outlier’

10 Hours Ago

David Snider, founder and CEO of Harness Wealth, and Michelle McKinnon of Payne Capital Management join CNBC’s “Closing Bell” to discuss WeWork’s troubled IPO as reports swirl the company’s valuation could potentially drop below $15 billion.

Source: IPOs
Author: Continue reading Why Harness Wealth’s founder says WeWork’s IPO valuation slashed below $15B is ‘an outlier’

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SmileDirectClub jumps in second trading day, after disappointing IPO

Alex Fenkell, co-founder of SmileDirectClub Inc., center left, and Jordan Katzman, co-founder of SmileDirectClub Inc. center right, celebrate during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Thursday, Sept. 12, 2019.

Michael Nagle | Bloomberg | Getty Images

SmileDirectClub rose more than 8% in midday trading Friday, recovering some losses after the company saw its shares plummet 28% during its disappointing market debut Thursday.

In it’s first trading day, the teeth-straightening start-up’s shares settled at $16.67 after opening at $20.55. It had priced its initial public offering at $23 per share Wednesday, above the expected range of $19 to $22. That means SmileDirectClub ranks as the fifth worst debut of the IPOs this year.

Founded in 2014, the dentistry disruptor sells teeth aligners directly to consumers and in its “SmileShops,” competing with Align Technology. SmileDirectClub also has partnerships with CVS Health and Walgreens Boots Alliance.

The company reported sales of $23.2 million last year, up 190% from the year before, while net losses correspondingly doubled to $74.8 million in 2018 from $32.78 in 2017, according to its prospectus filed last month. Notably, one of its largest expenses is marketing and selling, rising $64.2 million in 2017 to $213.1 million last year.

Source: IPOs
Author: Continue reading SmileDirectClub jumps in second trading day, after disappointing IPO