Until recently, startups could count on generous private funding, with the associated generous implied valuations, and avoid the perceived hassle of being accountable to public investors. If a company had both exit options on the table — an IPO or an outright sale — the sale option looked attractive.
At the moment, their faith is in the public markets, where they are betting valuations will be more generous over time than what an acquirer would be willing to pay. For private targets, that means an IPO. For public targets, it’s in their best interests to stay independent.
“An M&A buyer would have to buy the whole company and fund the losses,” said Rett Wallace, chief executive officer at Triton Research Inc., which analyzes Silicon Valley companies preparing to go public. “An IPO would be preferable to having the screws put to you by a buyer.”Read full article at bloomberg.com
With a market cap of more than $30 billion, Snap is now more valuable than Twitter and Viacom, and isn’t far behind eBay and Tesla Motors. The company now has about $2.3 billion in cash to use for acquisitions, new hires, product development or whatever else it chooses to do.
Snap has hired a number account executives — employees who manage and seek out brand partnerships and other business opportunities — leading up to its IPO. The company is also seeking to hire more than a dozen ad-related positions ranging from sales operations associates and marketing managers to product managers.
Investors in the coming initial public offering of Snap Inc. will buy into an unprecedented corporate governance structure that won’t give them a voice, instead placing all the power in a pair of 20-something executives who have not proven they are worthy of such trust.
Buying shares in Snap amounts to a risky bet on the two co-founders, Chief Executive Evan Spiegel, 26, and Chief Technology Officer Robert Murphy, 28. The two former Stanford University fraternity brothers have a combined 88.6% of the voting power in the company, which will not be diluted because the shares issued in the IPO will have absolutely no voting power.
“They have the full suite of protections for management and the historic owners, plus the unprecedented protection that the stock they are selling to the public is nonvoting,” said Rett Wallace, co-founder and CEO of Triton in New York, which provides data and analysis on private companies.
“A cynic would say they are almost anticipating unhappy shareholders, as they have made unprecedented efforts to remove the levers uppity shareholders pull to express themselves,” Wallace of Triton said. “If they thought it was going to be a rough ride, they have prepared themselves very well to ride it out.”Read full article at marketwatch.com
Snap Inc takes to the road in London on Monday to promote its initial public offering with a daring proposition: that it can build hot-selling hardware gadgets and ad-friendly software features fast enough to stay one step ahead of Facebook.
Snap’s IPO filing reads “as if all the hard things in front of them that they have to do are already done,” said Rett Wallace, cofounder and chief executive at Triton Research. But, he said, that’s not the case. “How will they hold up against all the guys you don’t want to be fighting against in the world – Facebook, Google and Apple?”Read full article at reuters.com
Snap Inc., parent of the hot disappearing-message app Snapchat, has a lofty valuation, hordes of coveted young users and social cachet. It also has a lot of Wall Street investors who aren’t buying the hype.
“The argument here is, ‘We’re going to build this huge audience and monetization will follow,’” said Rett Wallace, chief executive at Triton Research LLC, whose firm collects and analyzes data on companies. He added that before looking at Snap’s prospectus, many investors were hoping for answers about how to make money off Snapchat’s growing user base. Now there is a question about whether Snap can build that huge audience, he said.Read full article at wsj.com
Investors who buy into public offerings know it’s riskier to bet on a company with a shorter financial history. That’s why the IPO process is so critical: It’s the coming-out party when the company unveils why it’s worth owning the stock. Potential investors will come to Snapchat with more skepticism. The last major social media debut, Twitter Inc., generated a lot of excitement on Wall Street, but the company’s later performance proved that a popular, influential product doesn’t necessarily indicate long-term revenue and user growth.Read full article at bloomberg.com
In one respect, the men are going further than tech firms typically do: Investors won’t get any voting power with shares purchased in Snap’s initial public offering, according to people familiar with the matter.
The recent scarcity of tech IPOs could work in Mr. Spiegel’s favor. In 2016, 26 technology companies went public on U.S. exchanges, raising $4.3 billion, the lowest number and dollar volume since 2009, according to Dealogic.
“If you’re the only supply in the market, you’re well positioned to dictate the terms,” said Triton Research LLC Chief Executive Rett Wallace, whose firm collects and analyzes data on private companies.Read full article at wsj.com
General Motors Co. and Lyft Inc. are going to have a lot harder time wringing benefits from their newly minted partnership now that their biggest ride-sharing rivals just formed an alliance of their own in the world’s largest economy.
Earlier this year, GM poured $500 million into Lyft, half of a $1 billion round that valued the San Francisco-based startup at $5.5 billion. Just months before, Lyft had received a $100 million check from Didi Chuxing, China’s biggest ride-hailing business, solidifying an arrangement that would have helped both companies battle their shared global competitor, Uber Technologies Inc.
That all but dissolved this week when Didi and Uber joined forces for a $35 billion alliance in China. With it, Uber got $1 billion in cash that it can now use to focus on the U.S. market, where GM is counting on Lyft’s rapid growth to give it a real presence in the emerging business of ride sharing.
While Uber Chief Executive Officer Travis Kalanick has said he plans to wait as long as possible before going public, throttling losses in China was one of the main things holding up a potential IPO, people familiar with the matter said last month. Uber had been spending at least $1 billion a year to fight market-leader Didi in the Beijing-based company’s home market, and has already lost $2 billion in China, separate people familiar with the details have said.
Rett Wallace, chief executive officer at Triton Research Inc., which analyzes Silicon Valley companies preparing an IPO, said the deal with Didi provides closure to a costly and uncertain battle in China.
“Resolution of the land war in Asia will be a big comfort to all investors, existing and prospective,” Wallace said. “Eliminating the losses is great for the profit and loss statement, but more importantly, there is now certainty about the end of what was shaping up to be an endless and escalating capital need.”Read full article at bloomberg.com
The San Francisco-based startup — which powers anonymous text-messaging and phone calls for mobile apps like WhatsApp, Uber and Lyft — saw its shares surge nearly 92 percent, to $28.79, at the close of regular trading.
Still, Wallace said Twilio’s good news may augur well for Line, a Japan-based messaging app that’s aiming for a $5 billion valuation next month in dual listings on the New York and Tokyo stock exchanges.Read full article at nypost.com
“A lot of people are trying to force that story” that the tech IPO market has recovered, Kaylan Tildsley of Triton Research said in a phone interview. “Twilio is the third tech debut of the year, and the first of the traditional venture-backed Silicon Valley mold.”
“At the end of the day, Twilio is a good company,” she said. Triton assigned it a rating of 7.2 out of 10, ahead of the firm’s average rating of 6.5 “Solid growth, solid management, Goldman [ Sachs] brought it public” as one of the lead underwriters along with JPMorgan.Read full article at thestreet.com
The company’s initial public offering got off to a strong start. Twilio, the maker of mobile and web applications backed by Bessemer Venture Partners, sold 10 million Class A shares for $15 apiece, more than the $12 to $14 marketed range. The stock climbed as much as 73 percent to $26 on Thursday, after opening at $23.99.
Twilio has yet to make a profit, even with more than 28,000 active customers at the end of March including enterprise-software company Box Inc., department-store chain Nordstrom Inc. and rideshare company Uber Technologies Inc.
“This isn’t necessarily the greatest product in the world but the Who’s Who use it’’ said Anthony Evans, director of research at Triton Research, via telephone on Wednesday. “The business model for these guys is so good that they probably will earn money one day.”Read full article at bloomberg.com
“If the profit margins are what make this deal attractive to Wall Street, we won’t be seeing any Silicon Valley deals until the end of 2018,” said Rett Wallace of Triton Research, a New York-based research firm focused on tech IPOs.Read full article at nypost.com
SecureWorks, a digital-security firm controlled by Dell, closed at just $14 a share after its initial public offering on the Nasdaq Friday, well short of the $15.50 to $17.50 range the company sought.
It was the latest sign of a dark cloud lingering over the tech sector, as corporate spending on IT falters. Elsewhere Friday, shares of Google and Facebook tanked 5 and 7 percent, respectively, on disappointing earnings.
This year has been among the slowest on record for tech IPOs. By this time in 2015, six tech firms had gone public, according to Thomson Reuters. The edgy market has delayed entries by two other tech firms, Nutanix and Acacia Communications, which filed for IPOs in December and January, respectively.
“The big question is, who’s the first real tech company that wants to raise their hand and go first?” said Rett Wallace of Triton Research, a New York firm that analyses tech IPOs. “Whoever it is, it’s not going to be easy.”Read full article at nypost.com
In its first day of trading on Friday, shares of SecureWorks, a digital security company, have been hovering near the $14 price it set the night before. The stock opened on the Nasdaq market at $13.89.
The I.P.O. price yields a valuation of $1.1 billion, which is almost double the roughly $600 million Dell paid for the company in 2011, according to Triton Research, which provides information on private companies.Read full article at nytimes.com
SecureWorks Corp., the cybersecurity company owned by Dell Inc., closed unchanged in its its trading debut after selling fewer shares than originally marketed in its initial public offering at a price below the marketed range.
The share sale marks the first U.S. technology IPO of the year. Across industries, only 12 companies had gone public in 2016 before the SecureWorks offering, excluding special purpose acquisition companies, closed-end funds and real estate investment trusts, according to data compiled by Bloomberg. That’s the slowest pace since the financial crisis.
The SecureWorks IPO won’t necessarily spark a crop of listings from Silicon Valley’s so-called unicorns — the tech startups valued at more than $1 billion that typically raise million of dollars from venture capitalists. That’s because SecureWorks is a more mature, slow-growth company that doesn’t fit the profile of the attention-grabbing startups, according to Kaylan Tildsley, a partner at Triton Research.Read full article at bloomberg.com
Alba, co-founder of natural-baby products empire Honest Co., is hoping to take her company public at a $1.7 billion valuation, according to a report. A successful IPO could smooth the way for other celebrity-backed brands — even in an ugly market.
But some market observers remain skeptical about an Honest Co. IPO, given the slumping markets. Last month didn’t see any tech IPOs — the first January that has happened since 2009, during the financial crisis, according to Renaissance Capital.
“Maybe having a Hollywood star attached to your company overcomes all this stuff that no one else can overcome,” said Rett Wallace, chief executive of Triton Research, a New York firm focused on tech IPOs. “But what’s their competitive advantage and defensible position in the baby powder business?”Read full article at nypost.com
“What Square pulled off is a very successful reset of its valuations,” said Rett Wallace, chief executive and co-founder of Triton Research, which tracks data about privately held tech firms. “The market rebuffed Square at higher prices for an IPO, then rejected the range of $11 to $13, and finally Square had to price at $9. Square listened to the market.”
Still, Square faces an array of tough questions. Investors want answers about how Square will turn a profit, expand beyond its core payments business, and how Dorsey will juggle his role as Square CEO at the same time he is CEO of struggling social media company Twitter.
Known for its white square credit card readers that businesses can attach to mobile devices, the 6-year-old company has already started venturing into payroll software, business financing and even food delivery with the purchase of Caviar.
Read full article at mercurynews.com
On Wednesday, the company priced its IPO below its expected range of $11 to $13. At its opening price Thursday, the company was valued at $3.9 billion including options. That’s lower than the $6 billion valuation it received from its last private financing round.
Known for its white square credit card readers that businesses can attach to mobile devices, the six-year-old company has already started venturing into payroll software, business financing and even food delivery with the purchase of Caviar.
Square, the mobile-payments startup founded by Jack Dorsey, saw its shares soar 45 percent on their first day of trading — despite worries that so-called tech unicorns, private companies valued at more than $1 billion, are overpriced.
On the other hand, Thursday’s promising first day of trading was enabled in no small way by the company’s investment bankers 24 hours earlier taking down the pricing of the stock to a rock-bottom $9 — well below an earlier range of $11 to $13.
That is well below the $6 billion valuation that Square had fetched in private investing rounds during the past year — confirmation that venture capitalists have been a little frothy with their estimates of late.Read full article at nypost.com
While some analysts say Square is going public too early, others note that with the Paris terror attacks, a volatile stock market and upcoming election season the company might as well bite the bullet.
“It doesn’t necessarily seem like the sun is going to come out tomorrow all of a sudden,” said Rett Wallace, co-founder and CEO of Triton Research. “So if you’re going to go public, suck it up and go.”
What investors are willing to pay for mobile-payments service Square Inc. in its initial public offering will hinge on how much of a technology premium the company warrants for being a member of the startup “unicorn” club.
Two unicorns that went to the markets before Square haven’t fared well in the past months. LendingClub, which went public almost a year ago, surged 56 percent in its debut on Dec. 11. Since then, the stock has plummeted 45 percent. Etsy is trading 45 percent below its April IPO price.
Some of the luster of simply being a tech company has worn off because investors increasingly want to see growing profitability — not just increasing sales, said Rett Wallace, chief executive officer at Triton Research, which analyzes Silicon Valley companies preparing an IPO.Read full article at bloomberg.com
Mobile payments startup Square Inc. is seeking a valuation of about $3.9 billion, according to a new securities filing, far less than the $6 billion price tag put on the firm a year ago and a sign that recent sky-high private values are facing increasing market skepticism.
The San Francisco-based company on Friday said it expects to sell 27 million shares at between $11 and $13 each in an initial public offering, much less than what some investors paid for their shares a year ago.
Square’s pricing could serve as a reality check for the more than 120 tech companies with valuations of at least $1 billion, a club that has ballooned this year. Six-year-old Square’s IPO comes as big-name investors pushed valuations into the stratosphere for companies including Airbnb Inc., Dropbox Inc., and Uber Technologies Inc., which could test the public market as soon as next year.
“It’s a chickens-coming-home-to-roost moment,” said Rett Wallace, CEO of Triton Research LLC, which analyzes pre-IPO companies. “It might be harder for future IPOs because of how difficult it is to predict what they’ll be worth.”Read full article at wsj.com
Square knows that it faces an uphill battle. To account for its challenges, the company on Friday set its price per share in the $11 to $13 range, valuing the company at roughly $3.9 billion. That is well below its most recent private market estimate of $6 billion.
“A big name like Square going public at a down round paves the way to wonder what Silicon Valley unicorns will do so now,” said Kaylan Tildsley, a partner at Triton Research, which researches private companies.
Still, potential investors are digging into the company’s prospectus and setting up meetings with management during the firm’s road show to market its stock, according to people briefed on the company’s plans. And from Square’s perspective, it may be better to take its chances in the public arena now than to wait until next year, when it could be competing for attention with other unicorns — start-ups valued at $1 billion or more — going through the same issues.Read full article at nytimes.com
“It’s very reasonable for investors in this environment to ask what magic will make a loss-making company more profitable when it’s larger,” said Rett Wallace, chief executive of Triton Research LLC, which analyzes pre-IPO companies.Read full article at wsj.com
The debut of flash-storage company Pure Storage Inc., if successful, would send a signal that a difficult summer for tech IPOs was an outlier, and that investors will still put money to work when highly anticipated companies debut.
However, if the market debut for the startup—valued at more than $3 billion privately—goes poorly, investors say it will spark fears that there is a long winter ahead, especially for the more than 120 private tech firms valued at $1 billion or more.
“All eyes are on this deal to see what the tech IPO landscape will be for the end of the year,” said Kaylan Tildsley, a partner at Triton Research LLC, which provides data and research on private tech companies. The implications are particularly important because “the backlog of private technology companies with the potential to IPO is massive,” she said.Read full article at wsj.com
Pure Storage Inc., the third-biggest seller of all-flash storage systems, is seeking a valuation in its initial public offering that almost matches what private investors said the company was worth 17 months ago.
After a financing round led by T. Rowe Price Group, Pure Storage said in April 2014 that it fetched a valuation of $3 billion. Now, after nearly a year and a half of development and conducting business, that figure has increased only slightly at best.
Pure Storage’s IPO will serve as test over whether “the private market is intrinsically different from the public market, from a valuation perspective,” said Rett Wallace, chief executive officer at Triton Research, which analyzes Silicon Valley companies preparing an IPO.
“In the Valley, an emerging clever truism is that an IPO is the new down round,” he said. “With so few tech deals in the market, Pure Storage is set up to be the singular data point to support or debunk this idea.”Read full article at bloomberg.com
Male-only leadership at technology companies has long been a focus of critique — Facebook Inc. and Twitter Inc. both drew flak for the same reason. For Fitbit, though, the disparity is made more glaring by the fact that market research indicates over two thirds of its customers are women.
“It’s interesting the company has done so well with female customers so far,” said Kaylan Tildsley, a partner at Triton Research LLC. “We shall see if they can perpetuate this boys club as a public company.”Read full article at bloomberg.com
But the way startups are funded fosters an especially competitive atmosphere, said Rett Wallace, co-founder and chief executive officer of Triton Research. Look no further than Uber and Lyft, Airbnb and HomeAway, or YouTube and Vimeo to see that many of them deliver darn near the same thing to consumers.
“Variations on a theme is how you get funded. You have to be more like the competitors rather than less like the competitors to get funded, because the more different you are, the more risk you represent,” he said.Read full article at sfchronicle.com
IPOs have often been a mixed bag. And there have always been some duds. But historically the companies that go public have been up-and-comers. This year’s crop seems like a mixture of has-beens, misfits, and never-weres. GoDaddy, the biggest tech company to IPO in 2015 so far, is years past its buzzy Super Bowl ad prime and still doesn’t make money. Several recent biotech debuts are years away from a breakthrough drug. And execs at crafting website Etsy say the company is not about profits.
Facebook can take some of the credit. The social media giant’s 2012 dud of a launch has become a cautionary tale. Then, in 2013, the Jobs Act made it easier to raise money as a private company. Tech startups raised $9 billion privately in the first quarter, or 13 times the $710 million raised through public offerings, according to Triton Research. The companies that aren’t hurting for investors, like Uber and Airbnb, have so far opted out of the public markets and the headaches that come with them.Read full article at fortune.com
“There is good reason to believe that the company will become profitable on the bottom line in the future,” Rett Wallace, CEO of Triton Research, told CBS MoneyWatch, adding that might happen within five years.Read full article at cbsnews.com
Etsy — the company best known for selling handmade goods — is going public. The financial media is having a lot of fun with this IPO, even mocking it as “artisanal.” But it’s actually serious business. The company has grown steadily and is considered one of the more promising recent IPO
“One of the things that we really like about Etsy – we have a very high score on this company – is that the intrinsic model that they use is a very attractive model financially.” Rett Wallace with Triton Research analyzes private companies. And by intrinsic model, he means Etsy doesn’t have to buy products like a traditional retailer. The website is a platform that connects vendors and customers without requiring Etsy to hold onto inventory that could lose value or collect dust.Download Audio
The Brooklyn, N.Y.-based online marketplace for handmade and vintage goods has altered the playbook for its initial public offering, launching an expansive effort to attract small investors and focusing on fewer big investors, according to people familiar with the deal.
But going off script comes with some risk. The moves include limiting the amount of stock retail investors can get in the IPO to $2,500 so more individuals can take part, and concentrating many of the shares among a relatively small number of big holders. The approach could turn off some traders whose presence can help stabilize a stock once it begins trading.Read full article at wsj.com
“It’s like a beautiful test in a way to see if it’s possible to have a mission beyond money,” said Rett Wallace, chief executive officer of Triton Research. “You see these situations all the time where even when management is doing their best to take every penny off the table—regardless of what it does to the widows and orphans—you often see fund managers saying, ‘You’re not doing enough to make money.'”
Read full article at bloomberg.com
GoDaddy, the world’s biggest provider of domain names (like washingtonpost.com) and a major cheerleader of risqué TV ads, saw its stock price climb 30 percent Wednesday, to about $26 a share, during its first day of public trading.
The strong day-one bounce means investors believe that GoDaddy still has room to grow, even if, as analysts with Triton Research wrote, “recent competitive and internal changes could impact its market positioning.”Read full article at washingtonpost.com
The U.S. market is showing severe signs of IPO constipation. There are 104 companies currently on our Triton Research IPO Watchlist, including all of the “unicorns” that continue to attract investor interest the private market. But U.S. tech companies have overwhelmingly opted to avoid IPOs, raising money privately instead. And the lack of IPO filings indicates it will stay that way in the near term.Read full article at forbes.com
Bill Gurley is one of the best and most prominent venture capitalists in the U.S. right now. And let’s be honest, the current tech valuation climate has been very kind to him. So when he blogs about the “b word” (bubble) and follows it up with a media tour, no wonder serious people pay attention. Interestingly, in the intervening two weeks the market has made him look like a genius, while totally disregarding his warnings.Read full article at forbes.com
In their current fundraising efforts, both Uber Technologies Inc. and Lyft Inc. have asked potential investors to sign agreements stating they won’t invest in competitors for a period of six months to a year, according to people familiar with the policies. Investors are asked to sign the pledge before seeing any internal company data that could help them make a decision, the people said.
While venture firms typically refrain from investing in competing startups to avoid conflicts of interest, it is unusual for a company to require this level of commitment before an investment decision is made. That suggests Uber and Lyft are confident investor demand for their equity remains strong despite soaring valuations, said Rett Wallace, chief executive of Triton Research LLC, which does research on private companies.
“I’ve never heard of a company doing this,” Mr. Wallace said. “But it’s not like it doesn’t make sense. There have to be some benefits of being private, including not showing your numbers to people you don’t want to. If a company has the leverage to do it, then there’s no reason why they shouldn’t.”Read full article at wsj.com
First, on Dec. 10, came LendingClub (ticker: LC) the peer-to-peer lender that lets participants make loans to other individuals through the Internet for as much as $100,000, according to New York-based Triton Research. The shares went public at $15, before skyrocketing 72% to close at $25.74 on Dec. 26.Read full article at barrons.com
Rett Wallace, founder of Triton Research, thinks IPOs are likely to be even worse bets in coming years. “That’s because much of the growth has been claimed. The formative years of a company’s life have been captured by venture capitalists and a handful of investors willing to brave the opacity of the private market for outsize returns,” Wallace says. “Airbnb is America’s largest hotel company. It’s still private.”Read full article at barrons.com
Rett Wallace, chief executive officer at Triton Research, discusses shadow banking, the emergence of peer-to-peer lending and why he sees LendingClub as a tremendous opportunity and Uber’s $40 billion valuation. He speaks on “Market Makers.”
Maintaining Workiva’s fast growth while turning a profit won’t be simple, even after the multimillion-dollar infusion, said Rett Wallace, co-founder of New York investment research firm Triton Research.
“It’s not going to be easy,” Wallace said. “The problem they’re going to have is they have to either build products they don’t have to grow within their existing clients or expand into markets they don’t really serve.”
Wallace said his firm does not expect Workiva to turn a profit soon, citing models done in anticipation of the IPO. “Even in the optimistic case here, it doesn’t get you to profitability by the end of 2016,” he said.
Wallace said Workiva already has gained a lot of ground in its market and attracted high-profile customers. However, that can mean Workiva will have a more difficult time landing new clients in the future, Wallace said.
Read full article at desmoinesregister.com
Analysts say a number of factors are contributing to the slowdown. “The vacuum in new tech filings…may be related to market turbulence, a focus on biotech [IPOs] or Alibaba fatigue,” said Rett Wallace, CEO of Triton Research LLC, which provides research on companies going public.Read full article at wsj.com
Wayfair is not making money, however. It lost $51.4 million in the first half of the year, after a 2013 loss of $15.5 million, primarily due to increased advertising spending. And those losses are expected to persist for a couple of years.
Read full article at bostonherald.com
But now the bespoke research provider Triton Research has weighed in on the Lending Club IPO. Triton specializes in providing data-driven insights into innovative and disruptive companies – a service tailored specifically to institutional investors. The researcher has conferred upon the Lending Club listing a rating of 8.06. For some perspective, the average rating doled out by Triton is 6.58, and in fact the Lending Club score is the second highest to be awarded by the company since it began rating IPO companies 18 months ago.Read full article at altfi.com
A swath of early investors in Alibaba Group Holding Ltd. will be able to sell more than $8 billion worth of shares on the day the Chinese e-commerce company goes public, an unusual arrangement that is influencing how bankers price the offering.
“This job is already hard, so this means it’s that much harder,” said Rett Wallace, chief executive of private-company research firm Triton Research LLC, referring to the effect of the unlocked shares on pricing decisions.Read full article at wsj.com
“Lending Club shows the power of narrowly-focused online marketplaces,” Triton Research said. “In the same way the Uber’s marketplace functionality is designed specifically for auto transport and GrubHub’s is designed for food delivery, Lending Club has developed a comprehensive solution that allows parties that do not know each other to borrow and lend money safely and conveniently. Lending Club’s model offers attractive margin, scale and risk characteristics to the Company, addresses an enormous opportunity, and represents a viable threat to established bank and credit card incumbents. Lending Club operates in a regulatory grey area as it is not a bank or a broker-dealer, which can be a benefit and also a risk. The Company is the largest peer-to-peer lender in the U.S. by far. At 8.05 it is the 2nd highest overall score since Triton Research began scoring IPO companies 18 months ago.”Read full article at streetinsider.com
Triton Research initiated research coverage on the upcoming IPO for Wayfair (NYSE: W) with a 5.95 rating, which is below average for tech IPOs scored by Triton Research generally, and zulily (7.38) in particular. The firm’s average IPO rating is 5.95.
“Although Wayfair’s customer acquisition has been successful, the Company controls neither product manufacturing nor logistics and distribution, and is therefore less defensible than a vertically-integrated e-commerce platform,” Triton stated. They added, “Investors will also be concerned about future profitability, as well as poor disclosure and a dual-class stock structure.”Read full article at streetinsider.com
Triton Research initiated coverage on the upcoming IPO for US Telecommunications infrastructure provider, Zayo Group, with a 7.05 rating, which is slightly above the firm’s average IPO rating of 6.56.
“Zayo Group generates over $1bn in revenue and exhibits impressive customer retention and per customer revenue growth,” Triton Research said in its report. They added, “Management is solid and has used prior telecom experience to build the business in a relatively short amount of time. Zayo has been acquisitive (completed 30 acquisitions), so it will be difficult to estimate the real profitability of the company once its growth rate normalizes. Other issues for Zayo include its $2,970.7mn in total debt (as of Mar. 31, 2014) and the possibility of issues arising in the overall telecom industry.”Read full article at streetinsider.com
“Yodle is a better-than-average software company operating in a difficult space,” Triton stated. They added, “Management has been volatile and made some questionable decisions, but Yodle’s financials are impressive given its SasS model – the Company has had positive free cash flow since 2011. Additionally, Yodle’s client base is comprised ofsmall businesses, which is an attractive client category with low penetration.”
Read full article at streetinsider.com
Robert Doll, chief equity strategist at Nuveen Asset Management, talks about the U.S. economy, financial markets and corporate earnings. He speaks with Adam Johnson, Scarlet Fu and Brendan Greeley on Bloomberg Television’s “Surveillance.” Triton Research’s Rett Wallace also speaks.
“GoPro is a brand that defines a category, like Band-Aid or Uber, and is growing very fast. It helps that they are profitable,” said Rett Wallace, chief executive of Triton Research, which analyzes startups.Read full article at reuters.com
Rett Wallace, co-founder of Triton Research, says investors in initial public offerings are “looking a little harder at these things.” Wallace talks with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.Download Audio
Apple Inc. is paying slightly less than $500 million for the Beats Music streaming service, and more than $2.5 billion for Beats Electronics in its $3 billion deal, according to people familiar with the matter.
The valuation of the $10-a-month streaming service, which counts 250,000 paying subscribers, is generous based on its subscriber numbers. Spotify AB, which has 10 million subscribers world-wide, raised $250 million in November at a valuation of $4 billion, or $400 per subscriber. By that measure, Beats would be worth $100 million.Read full article at wsj.com
Shares of Chinese e-commerce firm JD.com soared almost 20 percent in their market debut as investors sought a piece of China’s booming online retail market, auguring well for Alibaba Group’s hotly anticipated float later this year.Read full article at reuters.com
“The fickle pricing environment just means additional scrutiny from investors. Depending on how good your company is, scrutiny can be bad or scrutiny can be good,” said Rett Wallace, co-founder Triton Research LLC, which analyzes startup companies.Read full article at wsj.com
The IPO marks a test for the lead investment bankers on the deal, Bank of America Merrill Lynch and UBS: in the current adverse environment, can they attract investors to a fast-growing but unprofitable online retailer?
JD.com runs China’s largest online direct sales business, according to a regulatory filing. Like U.S.-based Amazon.com. The company buys goods from manufacturers and distributors, stocks these products in warehouses and offers them for purchase via its website.
“In the US, the vertical retail model at this moment seems to have won over marketplaces—Amazon captured it,” Triton’s Mr. Wallace said. It’s unclear, though, whether that’s because “the model is intrinsically better, or is it because [Amazon CEO] Jeff Bezos out-executed all of the others?” he added.Read full article at wsj.com
“One of the things to remember about Weibo is that it is really a joint venture between two very large Chinese conglomerates, Sina on one hand and Alibaba on the other. Investors in the American market have dealt in for a small piece of the financial ownership of that company.
“But the revenue base of this company is very healthy. It’s only been generating revenues since 2012. We think it’ll do more than $300m (£178m) in revenues this year and might even show a profit for the year.”Read full article at bbc.com
Rett Wallace, co-founder and chief executive of Triton Research says: “I think people like the Chinese market, they like owning a company that is so well positioned in that market, and they like the analogies to familiar American companies like Amazon and Twitter.”Download Audio
With the initial public offering of videogame maker King Digital Entertainment PLC set to price late Tuesday, the central question facing investors is whether the company can pull off another blockbuster like “Candy Crush Saga.”
“For all of the claims that Zynga made—and King makes the claim too—that they have a scalable, repeatable process, it just turns out that the alchemy of figuring out a thing that billions of people are going to use all the time is really hard,” Mr. Wallace said.Read full article at wsj.com
“It’s a real solution to a huge intractable problem that has defeated the best efforts of the self-anointed geniuses in Washington,” said Rett Wallace, co-founder of Triton Research LLC, which analyzes private tech, media and communications companies, before the IPO.Read full article at wsj.com
Analysts will look to see how well it retains big-brand customers over time. “Consumer-packaged goods brands tend to spend their budgets on a campaign basis, rather than on a recurring basis,” said Rett Wallace, founder of Triton Research LLC, a private-company data firm. “This makes the business hard to win, and hard to keep.”Read full article at wsj.com
According to Rett Wallace of Triton Research, we are not. He provided this chart and what it shows is actual venture capital investment and how they are a pretty long way off from the peak, which was in 2000.View Video
Rett Wallace, founder & CEO at Triton Research, discusses market reaction to Tesla’s fourth-quarter results and the company’s sales prospects. He speaks on Bloomberg Television’s “Bloomberg Surveillance.” – Watch Video
Rett Wallace, founder & CEO at Triton Research and Neil Irwin, author of “The Alchemists,” examine Twitter’s IPO ahead of tonight share pricing and explain why the social media company is more like Pandora than Facebook. – Watch Video
JUST a few days ahead of its planned initial public offering on the New York Stock Exchange, Twitter has raised the price range for its shares to $23 to $25, up from the original target of $17 to $20. The microblogging service and its bankers have hinted that strong demand for its stock justifies the increase. But the move, which could value the company at up to $13.6 billion, means that investors should be even more wary of taking a flutter on the firm’s stock.
At a valuation of $13.6 billion, Twitter would have a market capitalisation-to-trailing-12-month sales ratio of roughly 26, which is higher even than those of Facebook and LinkedIn when they went public. Yet Twitter has been coy about how exactly its advertising machine will be able to generate the billions of dollars of future revenues to justify such a lofty multiple. Rett Wallace of Triton Research, which analyses private companies, points out that Twitter has provided far less granular information about its sales activities in its regulatory filings than, say, LinkedIn did when it went public in 2011.Read full article at economist.com
Measuring enterprise value against last-twelve-month sales puts Twitter at a discount of about 17% to Facebook, according to Rett Wallace, chief executive of Triton Research, a private-company research firm in New York.Read full article at wsj.com
Twitter Inc. on Thursday said it would price its shares at $17 to $20 in an initial public offering, valuing the messaging service at up to $11.1 billion, a number seen as conservative even for a company facing widening losses.
By starting out below that number, the company has left room to boost the range once executives hit the road and can gauge investor sentiment, said Rett Wallace, chief executive of Triton Research LLC, a private-company research firm in New York. “It gives them room to move up the price without offending investors’ sense of value,” he said.Read full article at wsj.com
“They’ve obviously been out talking to the market and they want to make sure this deal clears,” says Triton Research CEO Rett Wallace. “They also might want to leave themselves room to raise the price over the course of the roadshow.”Read full article at forbes.com
A revised prospectus filed by Twitter Tuesday offered a somewhat more up-to-date view into the social messaging company’s advertising business. But the additional data still leaves plenty of room for interpretation.Read full article at forbes.com
Having spent a week with its 120,000-word IPO document, I’m left with a nagging feeling. The document is full of numbers and charts and graphs that show how the service is growing. But if you look hard enough—heck, if you look at all—you’ll see it has virtually no details about the most important aspects of its business.
If anything, the filing ascribes Twitter’s impressive ad-growth figures to the fact that more people are using the service. And that is “like a car dealer reporting that sales increased because he put more cars on the lot. The cars don’t sell themselves,” says Rett Wallace , CEO of Triton Research, a New York firm that analyzes private companies. “How can you project the performance of a company when you don’t know who is selling and who is buying?”Read full article at wsj.com
New rules on initial public offerings allow smaller companies to file their listing documents privately with regulators and then reveal them as little as three weeks before the company proposes a price for its shares. “Even for professionals, unless you’re narrowly focused, three weeks is not a lot of time. If you’re a retail investor and you have a day job, God help you,” said Rett Wallace of Triton Research LLC.Read full article at wsj.com
But the sustainability of its business is uncertain, as consumers can come and go as they please, said Rett Wallace, chief executive of Triton Research LLC, which provides data and research on private tech, media and communications companies.Read full article at barrons.com
Rett Wallace, co-founder of Triton Research, says independent company research is more essential with an increase of initial public offerings. Wallace talks with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.” (Source: Bloomberg)Download Audio
“I am pretty bullish about Marin, even though at first glance their financials look horrendous at first blush,” Tony Evans, who wrote a report about Marin for New York-based Triton Research, told me. “They are one of the first to go public and they are in the top three in a space that is set to get very big. They should be able to grow fast enough to offset the losses they have been posting until now.”Read full article at bizjournals.com