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Some big names like WeWork, Peloton, Cloudflare, SmileDirect and Endeavor Group Holdings plan to raise money through the primary IPO market in September 2019.
This month of September 2019 will witness a massive activity in the U.S. IPO Markets as five companies will roll-out their Initial Public Offering (IPOs). Moreover, the U.S. IPO market has been going strong since the beginning of 2019 with billions of dollars raised through public offerings.
After 2014, this year of 2019 is turning out to be the biggest year as measured by the proceeds. According to the institutional research firm Renaissance Capital, o far in 2019, over 100 IPO deals have managed to raise $0 plus billion dollars. By the end of 2019, Renaissance Capital says that 50 to 70 more deals will hit the market raising another $15 billion.
Kathleen Smith, principal at Renaissance, told MarketWatch:
“The calendar is active and we expect this to be the most dollars raised since 2014, and the second-best year since the 1990 to 2000 period during the internet bubble”.
IPOs for September
Here’s a look at the five companies set to raise funds through the primary markets.
As per the last SEC filing, this office-space-sharing company is set to raise at least a billion dollars from the open markets. As per the SEC filing, WeWork will list three classes of stocks with different voting rights while ensuring that Chief Executive Adam Neumann holds most of the voting power. WeWork last raised money from the private markets at $47 billion valuation.
However, market sources tell that WeWork is facing significant challenges with respect to raising funds as the demand is quite bleak. According to CNBC, WeWork is not seeing enough demand even at $25 billion valuation. Besides, the company has some other risk factors like its $50 billion worth long-term lease commitments. In the first six months of 2019, WeWork registered a massive $900 million loss with a revenue of $1.54 billion.
This teeth-straightening startup is planning to raise $1.29 billion from its IPO. The company’s business model involves providing clear aligners to its customers. A group of licensed dentists or orthodontists will monitor the progress of the patients remotely.
SmileDirect says that it will use the proceeds raised to redeem the LLC units, pay dividends to investors, as well as spending on other general-purpose corporate requirements.
This indoor fitness startup has a subscription-based model for online interactive fitness classes as well as selling inter-connected treadmills and stationary bikes. Peloton is planning to raise around $500 million through its IPO. In the last fiscal year ending June 2019, the company clocked a revenue of over $900 million.
Peloton’s recent valuations stand at around $4 billion and serve over 1.4 million community members worldwide. It plans to reach over 67 million households.
Endeavor Group Holdings
This company combines a talent agency with some of the world’s biggest mixed-martial-arts organization. However, the company has some stressed financials with total liabilities around $7 billion and long-term debt of around $4.6 billion. The company plans a listing on the NYSE with the “EDR” ticker.
Its closest peer, the Wanda Group Co has a flop ICO in July 2019. The company is trading 34% down from its listing price. Smith said:
“Endeavor is a challenge for some people. It is a complicated business and highly leveraged.”
This is a network-based platform which promises to deliver improved security and better performance of the business-critical applications. It plans to eliminate the complexity and cost of managing the individual network hardware. The company plans to get listed on the NYSE with the “NET” ticker symbol. Cloudflare wants to raise $450 million through the primary market by pledging 35 million shares at around $10-$12 per share.
While the overall IPO market is going strong so far, even big companies like Uber and Lyft have failed to drive investors. Hence, before parking your hard-earned money into any of these companies, it is of utmost important to do the necessary homework.