Category Archives: IPO

Crypto Party!

Wednesday will be a historic day. Coinbase will make stock market history as the first company specializing in cryptocurrencies to launch an initial public offering. Well, it`s not a traditional IPO but a direct listing called DPO.

This can probably be the most important IPO/DPO of 2021, and the most interesting thing about this IPO/DPO is the difference between the traditional centralized market and the decentralized cryptocurrency market.

I wrote about Bitcoin 8 years ago and the price at that time was $100 – $200, and it has been a wild ride since then. The Coinbase IPO comes at a time were Bitcoin is trading at an all-time high around $63,000.

Photo by Karolina Grabowska on Pexels.com

A lot of people are very sceptical about the cryptocurrency market, but this IPO/DPO can reduce this scepticizm and make more people to invest in this market which is a great alternative currency in the future.

The company is founded in 2012 but have a valuation of around $100 billion. They have 56 million users in over 100 countries, and last week, Coinbase reported a revenue of $1,8 billion for the first quarter of 2021. In 2020 they reported revenue of $1,14 billion. Up 139% from 2019.

There is great oportunities, but Coinbase also comes with its own set of risks.

The company said in its prospectus that its revenue is «substantially dependent on the prices of crypto assets and volume of transactions conduted on our platform» and that 56% of its revenue comes from Bitcoin and Etherium transactions.

Coinbase warns that if cryptocurrency prices, demand or volume declines, its business would be severely affected. While the company has established security protocols, it also noted that there is always potential for cyber attacks or security breaches.

«We have experienced from time to time, and may experience in the future, breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities, or other irregularities,» Coinbase wrote in its prospectus.

«Unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our system and facilities, as well as those of our customers, partners, and third-party service providers.»

In addition, Coinbase cites «significant regulatory uncertainty» as one of its major business concerns, noting that regulators around the globe have increased their scrutiny of digital currencies.

A valuation of $100 billion will make Coinbase the biggest financial exchange in the world. Its operating margin of around 55% is far from that of Wall Street banks last year.

Coinbase generated 0,46% on each dollar it traded in cryptocurrrencies for customers. Last year, ICE and Nasdaq made an average of 0,01% on each dollar of securities traded. As you can see, this is big business for Coinbase, but for how long will it last?

They`re not alone in the crytocurrecy market, and sooner or later, I believe that competitors like Binance, Gemini, Kraken or Bitstamp to name a few, will follow Coinbase and push the fees down.

The operating margins for the largest investment banks is about 23%. If Coinbase drops to that level, with a revenue growth at a strong 21%, the company will be worth $18,9 billion, according to Fortune. Keep in mind that 21% revenue growth is what Nasdaq achieved in its rapid growth phase.

Keep in mind that the Coinbase IPO media is talking about is not an IPO. It is a DPO, which is a direct listing and I don`t know why media mistakenly describe it as an IPO. The difference is that IPO shares get allocated at a pre-established price. Direct listing shares do not.

In an IPO, investment bankers set the share price as high as they think the market will pay for the shares. In an DPO, there is no pre-set price dedicated by a group of investment bankers. IPO raise new capital, but direct listings do not.

The DPO will not fill Coinbase`s pockets with cash, but it will make it more easy for them to raise capital going forward. A DPO is a liquidity event. An IPO is a capital-raising event. That`s the difference.

Therefore; an IPO is less volatile than an DPO, because large institutions and other shareholders are typically locked up in the first 6-12 months. A DPO doesn`t have that kind of lockup and can dump the shares the same day they go public.

We didn`t see unexpected volatility in Spotify and Slack when they went public in their DPO, but Palantir`s shares slumped the day the lockup expired.

Coinbase shareholders will probably wait and see how trading is going before submitting their offers, and that can affect the nubmer of shares being traded and could exacerbate price swings. But that`s exactly how it is in the crypto space right now.

Coinbase has registered 114,850,769 shares eligible for sale, but nobody knows how many shares will change hands on Wednesday. It is a direct listing and the market sets the initial price. Not a group of investment bankers in an IPO. That`s exactly how it is in the crypto space. Open and transparent.

Wednesday will be a historic day and this week will be a good week for the crypto market. Let the crypto party begin.

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shinybull.com. The author has made every effort to ensure the accuracy of the information provided; however, neither Shinybull.com nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities, or other financial instruments. Shinybull.com and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Lyft is kicking off its IPO road show and expects to raise as much as $2,1 billion

A lot of unicorns are coming into the market and Lyft is the next to go public. It is an on-demand transportation company primarily providing ride-haling services like Uber. The company was launched in June 2012 and operates in approximately 300 U.S cities.

Lyft is kicking off its IPO road show this month and their goal is to get on the public market in April. The valuation is about $23 billion for Lyft and thats way beyond Ubers valuation of $150 billion. Lyft will be listed on Nasdaq under the ticker LYFT:

Lyft expects to raise as much as $2,1 billion through the sale of stock in a price range between $62 and $68. Not all of their shares will be sold to the public and they will hold less than half the votes among shareholders. So far, Lyft has collected about $5 billion in total private equity investment to date.

Revenue last year came in at $2,2 billion and their growth have skyrocketed by about 500 percent since 2016. Their losses are also skyrocketing while the loss last year reached $911,3 million. Lyft lose twice as much as their competitor Uber.

The venture capitalists have so far funded the company and now it is the publics turn. And Lyft need cash now. The companys cash and cash equivalents fell 53 percent to about $518 million during the course of 2018.

Lyft is like Uber disrupting the taxi industry but also the way people move around. The taxi industry as we know it today will change dramatically. Lyft and Uber`s business model will change the way people think about a vehicle and how they move around.

Not only that. We are not far away from self-driving cars, and that will be a huge game changer. And when that day comes, what will be the difference between Lyft and Uber? On top of that; they will face a lot of competition from established automakers.

You can imagine how it will be in the market if automakers like Tesla are joining the business by selling people rides to the people instead of selling them cars? What car do you prefer on your ride?

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Aston Martin is planning to go public in London next year

Aston Martin is planning to go public as soon as possible, and it can happen already next year. If that happens, Aston Martin will be listed in London and not in New York. It seems like Aston Martin is following Ferrari`s success.

Ferrari went public in 2015 and the stock is up over 60 percent since then. Aston Martin is a luxury brand just like Ferrari and they have both similar vehicles and price strategy. An initial public offering can be very profitable for Aston Martin.

 

 

Aston Martin is a British manufacturer of luxury sports cars and grand tourers. The brand was founded in 1913 by Lionel Martin and Robert Bamford. Their sport cars are regarded as a British cultural icon.

Aston Martin is associated with expensive grand touring cars in the 1950s and 1960s, and with the fictional character James Bond following his use of a DBS model in the 1964 film Goldfinger. Aston Martin has held a Royal Warrent as purveyor of motor cars to HRH the Prince of Wales since 1982.

Aston Martin`s valuation could be similar to Ferrari which is about $2,3 billion pounds. The company has 1,850 employees and a revenue of £593,5 million last year.

The company said a new factory in Wales will produce a sport utility vehicle which is called DBX, and that will be a «practical and family friendly» vehicle and not a luxurious and fast one. They will also expand with a push into yachts, apartments and handbags.

Aston Martin`s fourth-quarter results jumped and they shipped 155,000-pound DB11 models. The firm said they expects a full-year EBITDA to increase to 165 million pounds which is a great jump from 101 million pounds last year.

The main shareholders are Investindustrial (37,5% stake), with Kuwaiti companies Investment Dar and Adeem Investment Co.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Will Snapchat be the next Facebook?

Snap is going public. No, I`m not talking about the pop stars with the super hit “I got the power”. This is something different. A different power. But how powerful are Snap Inc actually? Do you really think that Snapchat will be the next Facebook?

Let`s take a closer look at some real facts. I have made a picture of some of the most loved firms in the social media universe, and this time I will compare Snap with Facebook and Twitter. As you can see from the chart below, Snap look more like Twitter than Facebook. Take a look below.

 

 

compared

 

 

As you can see from the chart above, Snaps cost follow Snaps revenue. Its positive to see that their revenue grew from $59 million to $405 million. Thats a whopping 590% over the same time. But the drawback is their high cost structure. Their net operating profit after-tax fell from -$344 million in 2015 to -$498 million in 2016.

You do already here understand that Snap is not the same as Facebooks business model. Revenue goes up while their profit goes down. Snaps valuation is about $20-25 billion, with a revenue of $405 million, and an operating loss of -$520 million.

Facebooks valuation when they went public was much higher with $3,7 billion in revenue, and an operation income of $1,75 billion. Facebooks valuation at that time was $90-105 billion, but as you may know, the stock traded down after the IPO.

You also may know the story of Twitter. Right up, and right down again. Will Snap follow Twitter? Take a look at the numbers. They are very similar. Revenue was $448 million, with an operating loss of -$93 million.

Twitters valuation at that time was $18-25 billion, but people said it was too much. Many investors said the right valuation was half of that; only $10 billion. Snaps trailing sales valuation was 62x, which is about the same as Twitter`s 56x.

Twitter had 100 million DAUs when they went public, while Snap has about 158 million. What is that compared to Facebooks 483? It will be hard to be a new Facebook.

Snap are going public on Thursday.

 

trump100_b

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The parent of Snapchat are going public

Snapchat is one of the biggest favorite apps in the social media universe at the moment. Its founders Evan Spiegel and Bobby Murphy filed confidentially to go public with SEC late last year, and now they are ready to be traded on the New York Stock Exchange under the ticker SNAP.

Snap`s revenue rose to $404,5 million, which is eight times higher than their revenue in 2015. In Q4 Snap had 158 million daily active users (up 48%), and many of my friends and family members are one of them. 2,5 billion Snaps are created every day.

 

snap

 

Snap Inc is a camera company, and in the SEC filings they say: “We blive that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.

Our products empower people to express themselves, live in the moment, learn about the world, and have fun together».

Worldwide advertising spend is expected to grow from $652 billion in 2016 to $767 billion in 2020. The fastest growing segment is mobile advertising, which is expected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020.

Snap belive that one of the major factors driving this growth is the shift of people`s attention from their televisions to their mobile phones. According to Nielsen, people between the ages of 18 and 24 spent 35% less time watching traditional television in an average month during the second quarter of 2016 compared to the second quarter of 2010.

A huge difference between Facebook at Twitter is that Snap Inc doesnt have their own server farm, which makes it more expensive which means Snaps earnings can look much lower that those who have their own server farm.

Snap Inc lost $514 million in 2016, which is up from about $373 million. Some of that money goes to Google because Snap Inc rents storage and server space from them. New legislation that would change U.S, or foreign taxation of international business activities or other tax-reform policies could also seriously harm their business.

Benchmark Capital owns about 10% og the company. Lightspeed Venture Partners owns 8,3%, and Institutional Venture Partners owns 4%.

Snap are looking to raise up to $3 billion, and Snaps offering is being led by Morgan Stanley and Goldman Sachs. Morgan Stanley won the desired «lead left» position on the prospectus. The bank also led Facebooks initial public offering.

 

trump100_b

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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