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Hertz: And Now for Something Completely Worthless

Typically, when a company offers stock to the public, it emphasizes the positive. Fundamentally, the pitch is this: Buy us and prosper. Maybe even get rich.

But Hertz Global Holdings put out a prospectus this week that projected a different outcome: Gamble on us and be prepared to end up with something worthless.

Hertz, you see, is bankrupt. But it said it hoped to sell $500 million in shares, maybe even $1 billion, anyway. For sheer audacity, what Hertz was trying just takes my breath away.

It caught the eye of the Securities and Exchange Commission, too. On Wednesday, Jay Clayton, the agency’s chairman, said on CNBC, “We have let the company know that we have comments on their disclosure,” and added, “In most cases, when you let a company know that the S.E.C. has comments on their disclosure, they do not go forward until those comments are resolved.”

Trading in the company’s shares stopped briefly at 11:44 a.m. and in a new filing, Hertz said it had suspended its new stock offering, while it discussed matters with the S.E.C.

The S.E.C. declined to expand on Mr. Clayton’s statement, and Hertz did not respond to repeated requests for comment.

What is unusual in the Hertz stock venture is that the company is still in the early stages of what are formally known as Chapter 11 bankruptcy proceedings. Companies in bankruptcy do not, as a rule, sell stock, precisely because creditors have a higher claim on assets than shareholders do. By the time the creditors have been paid a fraction of what they are owed, there may be nothing left for shareholders.

Still, a federal bankruptcy judge in Delaware gave Hertz permission on Friday to sell up to $1 billion in stock, and on Monday, its prospectus said it intended to sell $500 million worth.

Issuing additional shares of stock while the bankruptcy process is still underway is a fabulous idea, if you hold the company’s bonds, said Michael Cazayoux, who has analyzed Hertz’s bonds for KDP Investment Advisors.

“The money that the new shareholders pay may go right to the bondholders,” he said. That’s one reason he has given Hertz bonds a “buy” rating. They have been trading for around 40 cents on the dollar but may be worth more than 50 cents — thanks, in part, to the money that may flow in from new shareholders.

On the face of it, though, if the new stock sale were permitted, it would be a very bad deal for shareholders. “That’s why, normally, this just doesn’t happen,” he said.

But there is always a first attempt, and this may well be it.

I asked Lynn E. Turner, a former S.E.C. chief accountant, whether a stock offering like this, by a company in the early days of bankruptcy, has ever occurred before. “I can’t recall an incident where a company has made a stock filing this early after filing for bankruptcy,” he said.

Hertz, to its credit, disclosed the risks to prospective stock shareholders quite openly. If it is permitted to proceed with the sale, buyers won’t be able to say they weren’t warned.

The prospectus says clearly that on May 22, the giant car rental company entered bankruptcy proceedings because it could not pay all of its debts. As a consequence, there is a “significant risk” that by the time the company’s lenders are through with it, all of its stock — not just the shares in the potential new offering — will turn out to be “worthless.”

In fact, it uses the word “worthless” seven times, like a series of hazard lights set up along a long and dangerous road, so even unwary, inexperienced or perversely oblivious drivers will see at least one of them.

Here is a representative sample. It appears in boldface, much like this, so you can’t miss it:

We are in the process of a reorganization under chapter 11 of title 11, or Chapter 11, of the United States Code, or Bankruptcy Code, which has caused and may continue to cause our common stock to decrease in value, or may render our common stock worthless.”

Hertz appears to have sought to comply with legal requirements while availing itself of what it described in a court filing as a “unique opportunity” to raise money cheaply by selling new shares, while day-traders on Robinhood and other platforms play with its existing stock as though it were a video game.

The details are singular, but the recent trading frenzy — bidding up shares despite clear warnings that they have little or no intrinsic value — is reminiscent of previous episodes of what the economist Robert J. Shiller calls “irrational exuberance.”

Barbara Roper, director of investor protection for the Consumer Federation of America, said, “What immediately came to mind for me were the stock disclosures you used to see for I.P.O.s during the dot-com bubble in the middle of 1990s, where the companies explained in vivid detail that they had no prospects for ever making a profit — and people bought those stocks like hot cakes.”

Credit…Bob Riha/Liaison, via Getty Images

In some respects, she said, the Hertz gambit reminds her of the initial public offering of one of the dot-com era’s most spectacular flameouts, In a prospectus for its February 2000 offering, it said, “We believe that we will continue to incur operating and net losses for the next four years, and possibly longer, and that the rate at which we will incur these losses will increase significantly from current levels.”

The company made a cultural mark — its television commercials, featuring a raucous sock puppet, were, for a time, ubiquitous — but the prospectus was wrong about one thing. It didn’t manage to lose money for four years. By November 2000, it folded, and its existing shareholders lost their money. Unlike Hertz, though, it went bankrupt quietly and didn’t try to sell additional stock while in bankruptcy.

The dot-com bubble didn’t end well for anyone but short-sellers, who were betting on the bubble’s demise. By October 2002, the Nasdaq, in which many of the dot-com stocks were concentrated, lost more than 75 percent of its value.

Of course, the current era is different. The stock market’s volatility — and many of Hertz’s problems — are, to a large extent, caused by the coronavirus pandemic, and may well be relieved if and when the pandemic recedes decisively.

And Hertz, which celebrated its 100th birthday in 2018, is no It has survived many market cycles and in many incarnations. It is even possible, Mr. Cazayoux said, that with some big “ifs,” the next chapter in Hertz’s story will be a happy one. If it is able to sell the stock, and if the economy recovers quickly, it is conceivable that Hertz can “cure” its bankruptcy quickly, and the stock will be worth something, after all. “It’s extremely risky, certainly,” he said.

For extreme risk takers, a new offering of stock from a bankrupt company could conceivably have some value, said Jay R. Ritter, a finance professor at the University of Florida. Mr. Ritter said he teaches that a stock is “an option on the future value of a firm.” If that future value is somewhere between zero and, say, $2 billion, the stock might be “worth something as long as there’s a possibility” that the company will end up being worth something.

But that’s a gamble, in my estimation, not an investment. It sure isn’t something I would count on. As Ms. Roper put it: “What Hertz is doing raises serious concerns for investors.”

But, like, Hertz is creating a wonderful spectacle. While social distancing, enjoy bankruptcy from the sidelines.

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The Tech I.P.O. Comes Roaring Back in the Pandemic

SAN FRANCISCO — As the coronavirus spread in March, Vroom, a start-up that sells used vehicles online, shelved its plans to go public and rushed to shore up its operations.

But with many dealerships closed under shelter-in-place orders, people started buying more cars online, benefiting Vroom with record sales in March and April, the company said.

“We saw the whole world stabilizing,” said Paul Hennessy, the chief executive. “At the end of April, we said, ‘OK, maybe we should actually go on the offensive here.’”

Vroom, which is based in New York, capped that offensive by going public last week. Its share price more than doubled on the first day of trading as the company raised $495 million from its offering.

Vroom is part of a group of start-ups that have moved quickly to go public as the initial shock of the coronavirus has worn off. The stock market, which plummeted when the outbreak swept the United States, has rallied strongly in recent weeks. Since its nadir in late March, the S&P 500 index has climbed 40 percent.

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As the market has bounced back, SelectQuote, an online insurance provider; ZoomInfo, a sales software data provider; Warner Music Group, a record label; and Vroom have gone public. And more initial public offerings are on the way.

Lemonade, an insurance start-up valued at $2.1 billion, announced last week that it had confidentially filed to go public. DoubleDown Interactive, a mobile gaming company, also filed to go public this month.

Some of the biggest Silicon Valley start-ups are taking steps toward an I.P.O., too. Airbnb, the home rental start-up valued at $31 billion, said it hadn’t ruled out going public this year. Palantir, a digital surveillance company valued at $20 billion, is preparing to file for an I.P.O. in the coming weeks, said a person briefed on the start-up’s plans, who declined to be named because the talks were private.

Palantir declined to comment; Bloomberg reported earlier on its I.P.O. plans.

“The window is open,” said Previn Waas, a partner focused on I.P.O.s at the professional services firm Deloitte. “Everyone has figured out that a virtual I.P.O. is possible. There’s an appetite for companies to go public.”

Jeff Thomas, head of West Coast listings and capital markets at the Nasdaq stock exchange, said, “Everybody who was in process is gearing back up.”

Morgan Stanley had spent the last few months helping companies affected by the coronavirus find financing in every form — except public offerings, said Colin Stewart, Morgan Stanley’s head of technology equity capital markets. The market was too volatile, and companies had to assess how the virus had changed their financial forecasts, he said.

But now with the stock market more stable, the situation has changed. “It’s clear there is a lot of pent-up investor demand to look at I.P.O.s,” Mr. Stewart said.

Wall Street is embracing them even though many of the companies are losing money. Vroom lost $143 million last year on $1.2 billion in revenue, according to its disclosures. The food delivery start-up DoorDash, which filed in February to go public and has seen increased use in the pandemic, has also burned through hundreds of millions in cash and is unprofitable.

Last year, high-profile money losers such as Uber and Lyft also went public — and promptly skidded in the stock market. Their disappointing performances and the failed I.P.O. of WeWork set off a wave of prudence across the start-up world.

But excitement for new listings — especially for fast-growing tech companies — has sidelined the question of profitability. Investors have become more tolerant of money-losing companies because the virus has accelerated the adoption of technology like e-commerce, virtual learning, streaming, telehealth and delivery, said Gavin Baker, chief investment officer at Atreides Management, which invests in private and public companies.

“Covid pulled the world into 2030,” Mr. Baker said.

Not all of the companies that were on track to go public this year may make it, given how the economy is reeling from the pandemic. In early March, EquityZen, an investment service that tracks I.P.O.s, published a list of nine potential candidates for the year. Four — including the home rental company Vacasa, the 3-D printing company Desktop Metal and Velodyne Lidar, which makes technology for driverless cars — have since laid off staff because of the coronavirus.

“If we wrote the list today, it would have a very different set of components,” said Phil Haslett, a co-founder of EquityZen.

Airbnb, which had said it would go public this year, was hit especially hard by the travel shutdown. It raised new funding in April and cut a quarter of its staff. Asked about going public this year, Brian Chesky, its chief executive, said in a recent interview: “You can deal with some volatility, but there is a threshold. We’re kind of feeling out where that threshold is.”

The window for I.P.O.s right now may be small. A second wave of virus-related shutdowns could send the stock market into another tailspin. Companies also need to navigate disclosing their second-quarter financials, as well as holidays like Labor Day and Yom Kippur. Plus there is the November presidential election, which may create volatility in the market.

As a result, more companies than usual are aiming to go public in August, a month they traditionally avoided because people were often on vacation, Mr. Thomas of Nasdaq said. The exchange is telling companies to be ready to go public any time, he said, and to have alternative financing ready in case they can’t.

Credit…via ZoomInfo

For chief executives trying to take their companies public now, the timing is a nail-biter. Henry Schuck, founder and chief executive of ZoomInfo, had been planning to get his company out to the stock market in late March. But when the virus hit, he started checking the VIX, an index that measures stock market volatility, every day. The index had rarely topped 20 over the past decade, but in March, it topped 80.

“The market was just not in a place to have an I.P.O. come out,” he said.

In May, after the market had stabilized, Mr. Schuck decided to go for it. But there were other challenges. While executives typically go on a “roadshow” to pitch their company’s shares to investors, he was stuck at home.

So he crammed back-to-back virtual meetings with investors into a week. Even though he was at home, he said, he made sure to dress up and even wear shoes. On the morning of ZoomInfo’s I.P.O. on June 4, Mr. Schuck hit a ceremonial virtual button to open trading, alongside his wife and 4-year-old daughter. ZoomInfo’s shares rose more than 60 percent on the first day of trading.

Mr. Hennessy of Vroom also held a virtual roadshow, taking meetings with investors via teleconference from his home in Suffern, N.Y. He said he appreciated the efficiency of the roadshow, which would normally have lasted two weeks across multiple cities.

On the day of the I.P.O. on June 9, Mr. Hennessy and his executive team could not travel to Nasdaq, where Vroom was listing, to press the opening buzzer since the exchange was not open to visitors. Nasdaq provided Vroom’s employees with an app to upload photos of themselves, which the exchange displayed on its tower in New York’s Times Square.

Vroom’s office, nearby at 37th Street and Broadway, remained closed, but a few employees in masks went to see their faces displayed on the tower, Mr. Hennessy said. He said he had preferred it to an in-person ceremony, since people in the whole company got to participate by sending in photos and sharing screenshots of themselves on the tower.

“Those Nasdaq moments are over in a few minutes with some confetti,” he said. “This lasted a couple of hours.”

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How Your Airbnb Host Is Feeling the Pain of the Coronavirus

SAN FRANCISCO — Livia De Felice, who owns two vacation rental properties and manages four others across Italy, has seen all of her bookings for March canceled, leaving her “extremely worried,” she said.Austin Mao, who hosts 2,000 guests a month in his Las Vegas network of mansions, has slashed prices on …

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SBI Card IPO will remain open for an extra day. Here’s why

NEW DELHI: Unlike a regular three-day affair, the offer period for the initial public offering (IPO) of SBI Cards & Payment Services (SBI Card) will span four trading days.

The IPO will be open for subscription from March 2 to 5.

Under normal circumstances, an IPO is open for subscription for a minimum period of three and a maximum of 10 working days under certain circumstances.

The Rs 10,352 crore SBI Card IPO ((including a fresh issue of Rs 500 crore) will be India’s fifth biggest issuances after Coal India (Rs 15,100 crore), Reliance Power (Rs 11,563 crore), GIC RE (Rs 11,370 crore), ONGC (Rs 10,543 crore).

The Coal India issue was open for four days. The biggest issue was sold from October 18 to 20, 2010, for qualified institutional bidders, and from October 18 to 21 for retail and HNI investors.

With SBI as its parent and 35 per cent of the issue reserved for retail investors, the SBI Card issue is expected to see huge demand. This has led iBankers to seek an extra day to ensure that retail investors get to file their applications on time and no extension is required.

“To ensure smooth conduct of the application process and accommodate retail investors from remote locations, we, on behalf of the promoter and company, requested the market regulator to give one more day so that exchanges can accept all applications up to 5 pm on the fourth day, exchange personnel need not work late on closing day and it becomes a win-win situation for everyone,” representatives of the book running lead managers (BRLM) told

Generally, retail and HNI investors take cue from QIB subscription, which closes by 3:30 pm and retail and HNI applications keep coming in till late on the last day.

In the case of SBI Card IPO, the portion reserved for retail investors is worth around Rs 3,200 crore.

If the retail quota is fully subscribed, based on the lot size of 19 equity shares, 22.5 lakh forms would be needed for one-time subscription.

SBI Card IPO: Why is it being seen as a hot cake?

​New kid in town

26 Feb, 2020

SBI Cards and Payment Services, a subsidiary of the State Bank of India (SBI), will hit the primary market with a Rs 10,350 crore initial public offering on March 2. The IPO will be the fifth biggest in India so far. With investor interest already high in the IPO, we bring you all the details you need to know before hitting ‘subscribe’ on the issue:(With inputs from Yes Securities and Axis Capital)

“Considering the initial feedback on demand and investor interest, we are expecting a huge number of applications as was witnessed in all the successful mega IPOs in the past,” the BRLM representative said.

Under normal circumstances, an IPO is kept open for a minimum of three days, which can then get extended by at least three more working days if the issuer decides to revise the price band.

In case of force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract), banking strike or similar circumstances, the issuer can extend the bidding period for a minimum of three working days.

On receiving strong bids, the issuer can even close the offer period for QIBs a day prior to closing date.

In the SBI Card IPO, about 1.31 crore shares have been reserved for investors, who were State Bank of India shareholders as on February 20. They can apply in both retail and shareholders categories if the application amount falls within the limit of Rs 2 lakh.

The SBI arm has fixed the IPO price band in the Rs 750-755 range. The IPO, which will include the issue of Rs 500 crore worth fresh shares and an offer for sale (OFS) of up to 13.05 crore shares, may fetch about Rs 10,350 crore at the upper limit of the price range.

Source: Ipo Search Results

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SBI Card IPO: Should you go for it?

ET Intelligence Group: SBI Cards & Payment Services (SBI Cards), a credit card subsidiary of SBI will raise Rs 500 crore through fresh issue of shares and up to Rs 9,854 crore through offer for sale of existing shares. After the IPO, SBI’s shareholding will fall to 70 per cent from 74 per cent and that of CA Rover Holdings will reduce to 16 per cent from 26 per cent. Given its dominant position in the domestic credit cards market and strong parentage of SBI, the company is well-positioned to take advantage of the rising trend of digital payments. Investors with a longterm horizon and wanting an exposure to growing consumerism may consider the IPO.

The company is the largest pure play credit card issuer in India. Considering the card services of banks, it is the second largest after HDFC Bank. With 10 million cards in force and Rs 98,500 crore in card spends in the nine months to December 2019, SBI Cards had 18 per cent market share. Nearly half the cards are issued using distribution channels of SBI and other banks while the remaining are through its customer acquisition network across 145 Indian cities.

Credit card spends in the country increased by 32 per cent annually to Rs 6.1 trillion between FY15 and FY19 according to RBI and CRISIL following rising awareness of digital payments. The proportion of digital transactions increased to 62 per cent in FY19 from 25 per cent in FY14. These factors augur well for SBI Cards.

The company’s revenue and net profit doubled to Rs 7,286.8 crore and Rs 862.7 crore respectively between FY17 and FY19. In the nine months to December 2019, net profit crossed the FY19 level to reach Rs 1,161.2 crore while revenue was Rs 7,240.1 crore. Its return on equity (RoE) has remained above 28 per cent since FY17.

SBI Card snip 1

Competition from prepaid instruments such as e-wallets and UPI service is rising though they are mainly used for small transactions and do not offer credit period or benefit of reward points unlike credit cards. In addition, SBI Cards has adopted technologies to offer virtual cards on various mobile platforms thereby improving its appeal to tech savvy young generation.

Economic slowdown affecting discretionary spend is another major risk. However, so far, the company has not experienced any slowdown in either card issuance or card spending.

Considering the equity after IPO and annualising the net profit in the nine-month to December 2019, the company demands price-earnings multiple (P/E) of nearly 46. It has no listed peers in India. A look at more mature markets such as the US reveals that American Express, which derives over half of the revenue from consumer services including credit cards, trades at a trailing P/E of around 17 with RoE of nearly 30 per cent. Another US company Capital One, which earns nearly two-third revenue from the card business, trades at a P/E of 9.2 and has an RoE of 10 per cent.

While SBI Cards’ valuation looks aggressive, it reflects the faster growth in the Indian market as well as the company’s growth momentum.

Source: Ipo Search Results

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Intuit to Buy Credit Karma to Create Financial Data Giant

SAN FRANCISCO — Intuit, the parent company of TurboTax and Mint, agreed on Monday to pay $7.1 billion for Credit Karma, a start-up that has become one of the most popular financial applications for young consumers.

The deal, which is being paid for with a combination of cash and stock, is aimed at creating a Silicon Valley financial technology company that can serve as an online financial assistant for people, helping them get their credit scores, file their taxes and find new loans and financial products.

“This is very core to what we’ve declared around helping our customers make ends meet and make smart money decisions,” Sasan Goodarzi, Intuit’s chief executive, said in a conference call with analysts.

The acquisition underscores the value of the financial data of ordinary Americans. Credit Karma grew to be worth billions of dollars by giving people access to their credit scores and then using the information to serve them advertisements for new credit card and loans. The start-up said it had more than 2,600 data points on each of its customers, such as their Social Security numbers and outstanding loans.

The company has been at the leading edge of a large group of financial technology start-ups that have encouraged younger consumers to make more of their financial decisions online and through their phone. These services, like those offered by social networks, are often paid for through the exchange of data and ads.

Credit Karma says it has 100 million customers, including a third of all Americans who have a credit profile and half of all millennials. That is twice as many total customers as Intuit, which belongs to an older generation of online financial firms and has been looking for ways to appeal to younger audiences and make better use of the consumer data it controls.

The reliance on data could be a sensitive area as regulators become more concerned about the security and privacy offered by companies that control lots of consumer data. Banks have also become increasingly hesitant about allowing companies like Credit Karma to gain access to their customer data.

Mr. Goodarzi, though, said on Monday that “consumers are very much willing to consent for their data to be used for their benefit.”

After news of the deal leaked over the weekend, Intuit’s stock fell 3.6 percent on Monday before rising in after-hours trading.

Credit Karma’s decision to sell itself to Intuit pointed to the increasing skepticism that investors have been showing toward tech start-ups. Credit Karma had been expected to pursue an initial public offering. But several prominent young tech companies, such as ride-hailing companies Uber and Lyft, went public last year — and have seen their stock prices fall after Wall Street questioned whether they could make money.

Credit Karma was started in 2007 by Kenneth Lin, who is the chief executive, and two co-founders after Mr. Lin had trouble acquiring his own credit score. Signing up for the site became a rite of passage for Americans looking to get their credit score in shape to apply for a mortgage.

Unlike many start-ups, Credit Karma has a proven business model and reliable revenue. It gets a commission of a few hundred dollars every time someone accepts a new credit card or loan offer that it advertises. The start-up said it had $1 billion in revenue last year, up 20 percent from 2018.

But Credit Karma’s success has spawned many imitators. Many financial firms now give customers free access to their credit scores. Credit Karma has been trying to expand its offerings and gain access to more customer data by offering new free services like tax filings.

Intuit said that after the deal closed, likely in the second half of the year, Credit Karma will operate independently and remain in its offices in San Francisco. Mr. Lin will continue leading the business. That will mean, at least in the short term, that both companies will offer competing tax-filing services.

But Intuit and Credit Karma said that by joining forces, they hope to provide a much broader array of financial advice and products, including home loans and insurance.

They said they were particularly focused on helping struggling Americans who were the least informed and the most confused about their financial situations.

“We believe we can level the playing field for the most disadvantaged consumers in the financial system,” Mr. Lin said.

Nathaniel Popper reported from San Francisco and Michael de la Merced from London.

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Inari Medical Seeks Commercialization Capital In U.S. IPO

Quick Take

Inari Medical (NARI) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The firm develops and markets medical devices to treat patients with venous conditions.

NARI is growing rapidly and nearing breakeven. I’ll provide an update when we learn more about pricing and valuation from management.

Company & Technology

Irvine, California-based Inari was founded to develop two catheter-based thrombectomy FDA-approved devices to treat patients with deep vein thrombosis and pulmonary embolism.

Management is headed by President and CEO William Hoffman, who has been with the firm since 2015 and was previously CEO of Visualase, an MRI-guided laser company acquired by Medtronic.

Below is a brief overview video of Inari’s ClotTriever system:

Source: Inari Medical

The company’s primary offerings include:

Inari has received at least $54 million from investors including U.S. Venture Partners, Cooperatieve Gilde Healthcare, Versant Ventures, Milder Community Property Trust, and CVF.

Customer Acquisition

The company introduces its products to relevant practicing physicians through a dedicated, direct sales force of 63 reps as of December 31, 2019 and continues to add sales personnel.

Selling, G&A expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate:

Selling, G&A

Expenses vs. Revenue







Source: Company registration statement

The selling, G&A efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of selling, G&A spend, was 1.2x in the most recent reporting period.

Market & Competition

According to a 2016 market research report by MarketsandMarkets, the global market for thrombectomy devices is expected to reach $1.45 billion by 2022.

This represents a forecast CAGR of 6.7% from 2017 to 2022.

The main drivers for this expected growth are a growing number of minimally invasive procedures, an increasing target patient population, ample medical reimbursements and continuing technological innovation.

Major competitive vendors include:

  • Stryker (SYK

  • Medtronic (MDT)

  • AngioDynamics

  • Boston Scientific (BSX)

  • Johnson & Johnson (JNJ)

  • Terumo Corporation (OTCPK:TRUMF)

  • Penumbra (PEN)

  • Spectranetics

  • Edwards Lifesciences (EW)

  • Argon Medical Devices

  • Teleflex (TFX)

Financial Performance

Inari’s recent financial results can be summarized as follows:

  • Dramatic growth in topline revenue

  • Similarly high growth in gross profit

  • High and increasing gross margin

  • Swing to operating profit

  • Swing to negative cash flow from operations

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

Total Revenue


Total Revenue

% Variance vs. Prior


$ 51,129,000



$ 6,829,000

Gross Profit (Loss)


Gross Profit (Loss)

% Variance vs. Prior


$ 45,218,000



$ 5,548,000

Gross Margin


Gross Margin





Operating Profit (Loss)


Operating Profit (Loss)

Operating Margin


$ 801,000



$ (9,139,000)


Net Income (Loss)


Net Income (Loss)


$ (1,192,000)


$ (10,153,000)

Cash Flow From Operations


Cash Flow From Operations


$ (4,935,902)


$ 10,892,115

Source: Company registration statement

As of December 31, 2019, Inari had $23.6 million in cash and $29.5 million in total liabilities.

Free cash flow during the twelve months ended December 31, 2019, was a negative ($8.1 million).

IPO Details

Inari intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may differ.

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

to expand our commercial activities, including marketing personnel and programs; to fund product development, research activities, and clinical development activities; and the remainder for working capital and general corporate purposes.

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

Listed bookrunners of the IPO are BofA Securities, Morgan Stanley, Canaccord Genuity and Wells Fargo Securities.


Inari is seeking U.S. capital market funding to further commercialize its approved devices and continue research for development of new venous treatment devices.

The company’s financials show a firm that is growing revenue and gross profit rapidly and is just passing through operating breakeven.

Selling, G&A expenses as a percentage of total revenue have dropped significantly as sales have ramped; its sales & marketing efficiency rate is a still reasonable 1.2x.

The market opportunity for thrombectomy devices is moderately large but features significant competition.

The fact that NARI has grown so quickly in a crowded market means they have taken market share from some of the other players, so that is a positive sign.

Management’s valuation assumptions will be an important aspect of the desirability of the IPO.

I’ll provide a final opinion when we learn more details from management.

Expected IPO Pricing Date: To be announced.

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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 discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Source: Ipo Search Results

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Is investing in an initial public offering (IPO) right for me?

There are a number of rumoured UK initial public offerings (IPOs) planned for 2020 and beyond. Darktrace, a cybersecurity startup, let its investors know last year that an IPO was its goal. Film buffs might like the idea of acquiring shares in Vue Cinemas and its 200 screen worldwide if it goes public. McLaren’s CEO has expressed a desire to take the company public.

Being among the first shareholders in a hot, newly public company and potentially making a mint has an undeniable allure. Some IPOs have indeed made shareholders incredibly wealthy, but many others have left investors with nothing. On average, IPO investors could have probably done better.

What Jay R. Ritter found in his study of 1,526 IPOs from 1975 to 1984 was that a strategy of investing at the end of the first day of trading and holding for three years was inferior to investing in matching firms that were already listed. The IPO investors ended up with 83p relative to each £1 invested in the comparable firms.

Ritter identified over-optimism in the prospects of the debutant firms as the chief cause of the underperformance in IPO investing, particularly when there are many IPOs happening in the latest hot topic – think companies at the turn of the millennium, or ride-hailing apps now. Investors end up paying too high a price.

Maybe it’s the fear of missing out on the next big thing that makes any price seem like the right price for IPO investors, or perhaps it’s because the price was never right to begin with.

Making it public

There are more rules and requirements to comply with as a public company compared to a private one, and more people to keep happy. So, why would a company go public?

Access to public markets for capital to expand is a good reason. Introducing the company to new customers through the publicity of the IPO process and a listing on an exchange is another.

New rules for IPOs were established in July 2018. Potential investors now get to see an FCA-approved prospectus before any research from banks that are involved in the actual IPO. Those banks also have to allow unconnected researchers the same level of access to information that their in-house research teams get.

Investors need to be cynical when reviewing material published by the company and its backers. Naturally, the company will present as rosy a picture of its prospects as possible because it wants to sell for as much as possible. Well-informed independent research will provide balance, but investors still need to do their homework.

Perhaps a private equity firm has squeezed every last drop out of the company’s margins and wants to cash in now. Only careful scrutiny of the financial performance might reveal darker motivations for going public. Keep in mind that companies going for IPOs are typically younger and have short track records.

Are IPOs right for me?

Investing in IPOs is riskier than investing in the market in general. An investor looking for growth would probably be better off investing in existing growth companies. For income investors, IPO investing will rarely make sense.

Any amounts committed to IPOs should be small, and you should be able to lose your stake without it affecting your long-term investing goals.

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James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Source: Initial Public Offering Search Results

Posted on

BRIEF-Polypid Says Co Intends to Submit Confidential Draft Registration Statement For Proposed U.S. IPO

Feb 23 (Reuters) – PolyPid Ltd:



Source: Ipo Search Results

Posted on

Muscle Maker Grill to Ring Nasdaq Closing Bell on February 19th to Celebrate Company’s Recent Initial Public Offering

Muscle Maker Grill to Ring Nasdaq Closing Bell on February 19th to Celebrate Company’s Recent Initial Public Offering – World News Report – EIN News

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Source: Initial Public Offering Search Results