Tag Archives: IPO

Uber is offering 180 million shares for $44 and $50 and that will value the company at about $84 billion

The stock market is declining while the IPO market is hotter than ever this week. At least 15 IPO deals are expected to be priced this week and this is the biggest week since 2015. What most investors are focusing on now is Uber which is the biggest U.S company deal since Facebook in 2012.

Uber is finish with its roadshow in London, Boston and San Francisco, and the company is expected to price the sale on Thursday this week. The demand for the stock is strong and investors have put in orders for at least three times the amount of stock on offer.

Uber can raise as much as $9 billion and if that happen it will be the largest this year. It`s not clear what the price for stock will be but I think that the turmoil in the market at the moment will have an impact of the price range.

Uber is offering 180 million shares for $44 and $50 and that will value the company at about $84 billion. They have $11 billion in revenue and about $50 billion in gross bookings. Like Lyft, they have big operating losses.

Last year, Uber lost $3,03 billion in the 12 months through March. This is the largest loss ever for a U.S startup in the year before an IPO, and they have a lot of challenges.

More than 82% of the revenue comes from ridesharing while 13% comes from food delivery. Uber has a deal with McDonalds and used to get a 20% commission on deliveries. McDonalds renegotiatied the deal, and now Uber gets a 15% commission.

Chief Executive Dara Khosrowshahi is trying to sell Wall Street his vision that Uber will become the dominant force in all forms of transportation. But the competition is intense in many places around the globe.

China have its own Didi Chuxing while India has Zomato and Swiggy for food delivery. Didi is also in Latin America where they compete with Doordash, and all of them in the food delivery business.

Uber and Lyft drivers are planning a strike from 7 am to 9 am on Wednesday to protest their wages, their treatment as independent contractors rather than employees, and the lack of regulation governing the new sector.

Drivers have challenged the ride-sharing companies many times for refusing to deem them employees, which means they are responsible for maintenance of their own vehicles as well as gas and insurance, which greatly reduces the amount they can earn per hour.

Their competitor Lyft went public in April this year and entered the market with its IPO price of $72 per share. The stock soared on their debut but it came down again as IPO`s usually does, and now the stock is trading about 16 percent below its IPO price.

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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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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The Chinese smartphone giant Xiaomi will go public in Hong Kong in July

The fourth-largest smartphone maker Xiaomi are planning to go public, and the company will start a roadshow in the U.S and Europe in a few weeks. After a collaboration with institutional investors in the U.S and Europe to value the firm at no less than $70 billion, the Chinese smartphone giant will go public in Hong Kong in July.

In my recent article I talked about Foxconn and their plans to go public a week ago, and more Chinese companies are on the way, One of them is Xiaomi, and their IPO is the biggest IPO so far in 2018 which is good for Hong Kong.

(Xiaomi`s profit is “only” $2, but their biggest market is India)

 

Hong Kong is on the way to be the destination of choice for global companies seeking to raise capital. Hong Kong marks the 21st anniversary of the citys return to Chinese sovereignty on July 1, and Xiaomis IPO can be a great birthday present to Hong Kong.

Xiaomi went from a start-up to surpass $16 billion in seven years, and their founder Lei Jun decided to make a smartphone brand selling handsets at “honest” prices. Eight years later, Lei Jun and the seven other co-founders have made a company that wants to challenge the global industry dominance by Apple, Samsung and Huawei.

Xiaomi are the cheapest smartphone on the market with the biggest market share in India. About 70 percent of their 2017 sales of 114,6 billion yuan came from smartpones, but there is a huge difference between Xiaomi and Apple.

Lei Juns profit from his low-budget price smartphone is "only" $2 per handset. Tim Cooks margin is between $151 and $250 on each iPhone.

Xiaomi more than doubled its overseas shipments to 27 million handsets in 2017. Its revenue skyrocketed to 32,1 billion yuan. There is no doubt that the global market is where their ambitions lie, and this is globalization at its best.

Xiaomi opened its first European sales outlet in Paris and plans to open additional Mi stores in France, Spain and Italy later this year.

Xiaomi do not only have a big potential with its smartphones but also from smart devices, better known as the Internet of Things (IoT). Industry revenue may balloon every year at a 13,3 percent compounded growth rate to $6,2 billion by 2021, according to IDC.

Their innovative products will make a tremendous change in every industry.

Xiaomis valuation can be $100 billion and it will be the biggest IPO since Alibaba in 2014. Alibabas IPO was the biggest IPO of all time with its 25 billion IPO in New York. Facebook went public in 2012 with an $16 billion IPO.

Former communist China are on the way up. This IPO will make even more rich people in China. Founder Lei Jun and his co-founders will be rich after the IPO. Not only that. 56 of the earliest employees pulled together $11 million to invest in the start-up. Today, they are the lucky 56.

Their stake in Xiaomi may soon be worth about $1 billion to $3 billion, depending on the stock sale. That works out to $36 million each at the midpoint.

Citic-CLSA, Goldman Sachs and Morgan Stanley had been appointed to arrange Xiaomi`s stock offer.

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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Apple`s iPhone maker Foxconn is planning to go public on May 24

Foxconn Industrial Internet is planning to go public, and their IPO is expected to launch on May 24. Foxconn Industrial Internet, a subsidiary of the world`s largest contract manufacturer Foxconn, said it plans to raise $4,3 billion which is the biggest Chinese IPO in about three years.

With ten percent of its enlarged capital offered in the IPO, Foxconn industrial Internet would have a valuation of $42,62 billion at listing, and the Foxconn unit is offering 1,97 billion shares at 13,77 yuan per share on the Shanghai stock exchange.

Foxconn are making electronic devices, cloud service equipment and industrial robots, and they has signalled previously that they will launch projects in areas including manufacturing, industrial internet, cloud computing, and fifth-generation wireless technologies.

I said in one of my recent articles that smartphones will not be the big thing for the next hundred years. It doesnt stop here. This is probably why Foxconn want to go public, because most of its revenue is coming from Apples iPhones.

R&D is expensive but going public will give Foxconn more opportunities to expand into more cutting-edge technology. Will the Taiwanese company make the next generation of phones? Time will show.

Foxconn are making smartphones and cloud computing equipments and robots today, but what they want is to spend their 27 billion yuan to fund projects like artificial intelligence (AI) and fifth-generation wireless technologies.

Hon Hai Precision Industry Co will with its automated factory division give the company a better position in the tech supply chain.

The next generation of phones can become a part of us, and that intelligent operation systems will make us question what it truly means to be human.

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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On February 28th 2018, Spotify filed for direct listing on the New York Stock Exchange

Spotify is a music-streaming service that changed the music industry. The Swedish company was founded in April 2006, and on 7 October this year, the company has been on the market in ten years. It is developed by startup Spotify AB in Stockholm and now they want to sell shares to investors.

According to Spotify`s filing yesterday, the opening public price of its ordinary shares on the NYSE will be determined by buy and sell orders collected on the day of the listing. CEO Daniel Ek owns 9 percent of the company. Martin Lorentzon has 12 percent, but they will have full control over the company. Together they have 80 percent of the voting rights.

Spotify has so far been a bad business, but they changed the music industry with its new business model, and the industry`s revenue are growing for the first time since the CD was their «milk cow.» Spotify have 140 million users and 70 million are paying for their service.

Their revenue in 2015 was $2,18 billion. According to the filing, Spotify paid about 88 cents for every dollar in revenue in fees to record labels in 2015. It seems like it goes in the right direction for the company as those costs has declined to about 79 cents.

On top of that, Spotify has stopped burning cash and their free cash-flow margin is 2,7 percent. At the end of last year, the company had about 1,5 billion Euros in cash, cash equivalents and short-term investments.

Spotify as a company doesnt sell stocks in the non-IPO, but their stockholders will try to sell their shares to the public stockholders. According to Spotifys not-an-IPO filing, their value was as low as about $6 billion and as high as $23 billion in private stock transactions since the start of 2017.

You can ask yourself why they are doing it this way instead of raising money from a conventional IPO. Spotify`s existing shareholders can sell their shares to public stockholders, and it would be a win-win if record labels could buy a stake in the company. They will help each other.

Spotify operates under a freemium business model which means basic services are free, while additional features aer offered via paid subscriptions. Spotify makes its revenues by selling premium steaming subscriptions to users and advertising placements to third parties.

In 2013, the company launched a new website called «Spotify for Artists,» and they pay copyright holders royalties for streamed music. Spotify for Artists states that the company does not have a fixed per-play rate, instead considers factors such as the users home country and the individual artists royalty rate.

Rights holders received an average per-play payout between $.006 and $.0084. Spotify encourages people to pay for music, and their subscriptions are their main revenue source.

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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