IPO

DoorDash IPO Worse Than WeWork Disaster?

by
doordash-ipo-disaster

Yesterday in my December outlook for stocks, I alluded to the fact that the DoorDash IPO was perhaps overly optimistic about its profitability and the company’s ability to keep any semblance of that profitability in a post-pandemic world. MarketWatch Calls DoorDash IPO “Most Ridiculous” Someone over at MarketWatch isn’t waiting for investors to read between the lines with an opinion piece claiming that the DoorDash offering is the, “most ridiculous IPO of 2020.” The piece goes on to make the claim that the DoorDash IPO offering may even be worse than the WeWork IPO disaster that they previously proclaimed, the Most Ridiculous IPO of 2019. The article goes into the numbers in details, but the long and the short of it is this: DoorDash barely squeezed out a profit on $1.92 billion of revenue for the first nine months of 2020. That amount of revenue is 3x last year’s revenue due to a huge increase in the food delivery market thanks to the Covid pandemic. If you can’t squeeze out a profit in the very best possible market, how can you be profitable ever again. DoorDash can’t raise fees and expenses due to numerous competitors. In fact, its fees are …

Read More

Facebook IPO Securities Fraud?

by

We talked recently about the Facebook IPO flop. Now, things are starting to maybe look a little bit worse. According to several news websites, including the Wall Street Journal, there may have been some forbidden communications between Facebook, its major bankers, and subsequently, between those banks and their clients. It seems that during the Facebook IPO roadshow, Facebook disclosed, in more detail than in their amended S-1 filed with the SEC, that their earnings were rapidly declining due to the fact that a large part of their user base was shifting to accessing the Facebook service via mobile devices instead of online. The difficulty is that there is no room on most smartphones to put up the ads that populate the right side of the screen on a full desktop computer or laptop computer. As such, Facebook generates almost no revenue from mobile users. If more users access Facebook without generating revenue that is a double whammy. More users equals more expense, but not more revenue. None of this necessarily adds up to trouble for Facebook, other than those disclosures made in private. All material information must be disclosed publicly both about a publicly traded stocks and those about to …

Read More

Facebook Flop or Not?

by

Facebook went public on Friday. After months of build up, there were some issues with trading, and finally, no big pop in stock price. This has led some media pundits to conclude that Facebook’s IPO was a flop. But was it really? Facebook IPO Trading Facebook’s IPO was not necessarily typical. However, there was little typical about it before it even began. There was the sheer size of the offering, making the Facebook IPO one of the largest of all time. Then, there was the intense media interest, which, believe it or not, is not typical of initial public offerings. The idea that Facebook’s IPO was a flop revolves around the concept that its stock price did not rise on its first day of trading. Indeed, there was ample evidence that Facebook’s underwriters were forced to step in and prop up the share price to keep it above the $38 offering price. Whether this is a flop or not depends on whose shoes you are in, and how much you care about what normally happens. Facebook IPO Pricing In the days leading up to the IPO, there was some concern that the price for Facebook stock was too high. After …

Read More

Facebook IPO 2012

by

After years of speculation, rumor and guesses as to whether Facebook stock is a good investment at all, the company has finally announced plans to go public. Facebook will trade on the NASDAQ under the ticker symbol FB following its IPO. Like many other technology IPOs of late, this offering will leave CEO and founder Mark Zuckerberg in iron-fisted control of the company. He’ll control approximately 57 percent of the voting power in the company after it goes public, leaving shareholder lawsuits as the only chance for investor control. The company indicated and initial public offering range of $28 to $35 per share. This would value the company somewhere between $77 billion and $96 billion dollars, which is close to many technology pundit’s wishes of a $100 billion valuation. Regardless, of where within that range it prices, Facebook will be the internet IPO ever. With a $100 billion valuation, Facebook would be close in market value to long established technology companies such as Amazon and Cisco. The IPO would raise something in the $11 to $13 billion dollar range, although the company will only get half of that. Investors in the company are cashing in a big pot of chips …

Read More

Is Groupon Public Yet?

by

Has Google Already Beating Groupon? Not long ago, Google offered to buy Groupon for $6 billion. Soon thereafter, Groupon did another round of private equity financing that essentially paid off company founders and early investors such that they have already locked in sizable gains. That might be a very good thing since Groupon seems to be in trouble before it even goes public. Update: Groupon has updated its IPO filing documents again. Follow the link for the latest. Groupon’s IPO Filing Groupon has already had to adjust the documents it originally filed in order to do an initial public offering (IPO) of stock. It de-emphasized a widely mocked financial metric that essentially didn’t count certain expenses. That isn’t a huge thing by itself, although it does potentially show what Groupon thinks of the sophistication level (or lack thereof) of those who would buy Groupon’s IPO. Groupon’s management took the somewhat controversial step of trying to comment on all the negative publicity its IPO has been getting by sending out a company-wide email to employees saying exactly the kinds of things that you aren’t allowed to say during the SEC mandated “quiet period” before a public offering. Of course, they were …

Read More

Groupon IPO Better Hurry UP

by

Not long ago, news that Groupon had spurned Google’s $6 billion takeover bid was released and I couldn’t help but thinking that maybe Groupon had succumbed to pop-star diva mentality, where everyone except you and the flatterers you surround yourself with know that your future at the top is shaky at best. Later reports suggested that Groupon was worried that the deal might eventually be blocked by regulators and that the company would be left holding the bag after spending over a year in waiting mode. That makes more sense, but I still thought the clock was ticking. After that, reports suggested that Groupon raised more money to buy out early investors who wanted to cash out. Looks like I’m not the only one worried about the future. The main issue with Groupon is that the barrier to entry, or the so-called economic moat, around its business model is virtually non-existent. Sure, other small VC-funded startups might have trouble taking on the deal of the day website, but a well funded competitor would have no problem replicating what the company does quickly. Yesterday slammed home just how urgent the Groupon IPO is. Living Social, one of the Groupon competitors that …

Read More

Facebook Valuation Estimates Billions Wrong?

by

Now that the new Facebook movie is coming out, even more people are going to be clamoring for information about just what Facebook is, what the Facebook company is like, and, of course, how to invest in Facebook. The catch is, there is no Facebook. Not a Facebook company you can invest in at least. Should savvy investors be looking to buy Facebook stock when they can? Investing In Facebook Let’s start with the basics. When most people think of stock, they think of the stocks that trade on the major stock exchanges like the New York Stock Exchange. The companies that trade their stocks here are called publicly-traded companies, because shares of their stock are bought and sold on public exchanged like the NYSE, AMEX, and NASDAQ. There are also many companies, both big and small, that do not have stock shares that trade on the public markets. These companies are often referred to as privately-held companies, although that is not always a technically accurate decision. Facebook is NOT a publicly traded company. There are no Facebook shares of stock to buy on the NASDAQ or any other public stock exchange. That means that there is no way to …

Read More