MKM Partners gives investors something to chew on just ahead of the public debut of Chewy (CHWY).
The firm isn't involved in the IPO so is free to give its bullish assessment on the online pet supply company.
"Investors are indeed hungry for a pure-play online retailer, catering exclusively to consumers’ furry friends," says MKM's Rohit Kulkami in an animal spirits analysis.
Chewy is due to begin trading today after pricing its IPO last night at $22 per share vs. the original range of $17 to $19. The IPO has been grabbing a lot of attention (fairly or unfairly) due to its business being somewhat similar to Pets.com, which flamed out in spectacular fashion during the dot.com bubble.
2019 has seen the hottest IPO activity in years as investors bet on extremely fast growth and large markets opportunities.
Adding on to the 100%-400% gains seen by Beyond Meat, Zoom, PagerDuty and CrowdStrike following their listings, Fiverr closed its first day up 90% on Thursday, while pet e-tailer Chewy upsized its IPO ahead of today's debut.
There have been some disappointments as well, like ride-hailing giants Uber and Lyft, but the Renaissance Capital IPO ETF (NYSEARCA:IPO), a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500.
Slack's (WORK) direct listing on June 20 is likely to value the collaboration software company at $16-17B, according to Bloomberg sources who based the calculation on the projected revenue and current growth rate.
Earlier this week, Slack guided FY20 revenue of $590-600M with a non-GAAP loss per share of $0.44 to $0.41.
Shares in the international unit of China National Tobacco - a state monopoly that accounts for 40% of global cigarette production - jumped as much as 10% in their trading debut in Hong Kong, in a limp day for Asia stocks that saw the Hang Seng index slide 1.9%.
Cybersecurity group CrowdStrike (CRWD), which will begin trading today on the Nasdaq, priced its IPO above its expected price range at $34 per share, raising $612M and valuing the company at $6.8B.
A Bloomberg report also suggested that Slack Technologies (WORK) will be valued by investors at $16B-$17B when it lists its shares publicly next week.
Airbnb (AIRB) is working to comply with a subpoena from the City of New York requesting information about some listings in the city.
AIRB is providing anonymized data on listings and hosts from the start of 2018 through February 18 of this year. The requested info includes listings lasting fewer than 30 days that offer the entire home, private/shared rooms, or multiple rooms for rent at the same address.
Under an agreement with Airbnb, NYC is allowed to submit a follow-up request for de-anonymized data.
The South San Francisco-based biotech has its sights set on therapies to treat nonalcoholic steatohepatitis (NASH). Lead candidate is AKR-001, an analog of a naturally expressed hormone called fibroblast growth factor 21 (FGF21) that regulates the metabolism of lipids, carbs and proteins. In previous studies in type 2 diabetics, AKR-001 was associated with substantial improvements in lipid metabolism and insulin sensitivity. A Phase 2a clinical trial launched a few weeks ago. The estimated primary completion date is March 2020.
The New York City-based biotech develops AAV-based gene therapies for patients with neurodegenerative disorders who have particular genetic profiles. Lead candidate is PR001 for the treatment of GBA1 mutation-positive Parkinson's disease (about 7 - 10% of total cases) and neuronopathic Gaucher disease (about 6% of all cases).
Fannie Mae (OTCQB:FNMA -1.1%) and Freddie Mac (OTCQB:FMCC -0.3%) would need to build ~$200B-$250B in capital reserves and would need several years of an "established earnings history" before the government-controlled mortgage giants launch initial public offerings, writes Raymond James analyst Ed Mills in a note.
He estimates that any IPO would be at least three to four years away.
A number of other issues that would need to be resolved: the qualified mortgage "patch", the future of the government-sponsored enterprises' multifamily businesses, potential changes to underwriting standards, how the new uniform mortgage-backed security fares, and "how any implicit or explicit government backing would work."
Add onto that list potential friction from the 2020 elections if Democrats win the White House and make gains in Congress.
The La Jolla, CA-based biotech develops drugs directed to validated targets based on its single domain antibody platform, adding that it believes that its protein engineering technologies can overcome the limitations of other therapies. It currently has three oncology programs in Phase 1 development: INBRX-109, a tetravalent agonist of a receptor called DR5; INBRX-105, an anti-PD-L1 monoclonal antibody that is a conditional agonist of a receptor called 4-1BB and INBRX-103, an anti-CD47 monoclonal antibody.
Uber (NYSE:UBER) will likely be the focus of dozens of fresh research reports starting today as the quiet period ends for the 29 investment banks that underwrote its IPO.
After a rocky debut, followed by the ride-hailing giant’s $1B loss in the first quarter, there will be plenty to weigh in on, including valuation, prospects for revenue growth, spending and possible paths to profitability.
Trading about 8% below its IPO price, Uber is valued at roughly 5.08 times 2019 estimated sales, a slight discount to rival Lyft.
The Boston, MA-based biopharmaceutical firm develops therapies for neuropsychiatric disorders. Lead candidate is antipsychotic KarXT, an oral modulator of muscarinic receptors, in Phase 2 development for acute psychosis in schizophrenia patients. KarXT is a combination a muscarinic agonist called xanomeline and a muscarinic antagonist called trospium.
The company says a key advantage of KarXT is its selective effect on muscarinic receptors in the brain, thereby avoiding the unwanted side effects associated with activating peripheral muscarinic receptors.
The Seattle, WA-based biotech has developed an immune medicine platform that it says can read the genetic code of a particular patient's adaptive immune system to precisely determine how it detects and responds to disease in that person. It then uses computational biology and machine learning to develop and commercialize products and services tailored to that individual. It boasts that it has characterized over 20B immune receptors, established partnerships with over 125 biopharma firms and launched two product lines, immunoSEQ and clonoSEQ.
The Waltham, MA-based biopharmaceutical firm develops therapeutics based on proteins called integrins that facilitate cell-extracellular matrix adhesion. Lead candidate is MORF-720, an oral avb6 specific integrin inhibitor for the potential treatment of idiopathic pulmonary fibrosis, in development with collaboration partner AbbVie (ABBV -1.1%). An IND will be filed in the U.S. by year-end.
2018 Financials ($M): Operating Expenses: 28.0 (+65.7%); Net Loss: (23.8) (-40.8%); Cash Flow Ops: 76.3 (+595.5%) due mainly to a $100M upfront payment from AbbVie.
IDEAYA Biosciences (IDYA +1.5%) has closed its initial public offering of 5.75M common shares at $10 per share, including the full exercise of underwriters' over-allotment of 750K shares. Gross proceeds were $57.5M.
The clinical-stage biopharmaceutical firm develops treatments for skin disorders. Lead candidate is tapinarof, a topical cream for psoriasis and atopic dermatitis. It acquired global rights to the aryl hydrocarbon receptor modulating agent from GlaxoSmithKline (NYSE:GSK) in August 2018. Two pivotal Phase 3 studies were launched in May.
Controlling shareholder is Roivant Sciences.
Financials (12-month period ended March 31): Operating Expenses: $273.2M (+548.9%); Net Loss: ($255.3M) (-497.9%); Cash Burn: ($257.7M) (-630.0%).
The Palo Alto, CA-based biotech develops treatments for well-characterized Mendelian (inherited diseases arising from single-gene mutations) disorders at their source and cancers with clear genetic drivers.
Four (of 15+) pipeline candidates are in clinical trials, two in Phase 3, one in Phase 2/3 and one in Phase 2. Phase 3 programs include BBP-265, under development at subsidiary Eidos Therapeutics, for the treatment of transthyretin amyloid cardiomyopathy (ATTR-CM) and BBP-831/infigratinib for FGFR-driven cancers. If all goes well, a U.S. marketing application will be filed for the latter in 2020 and the former in 2021.
The Redwood City, CA-based biopharmaceutical firm develops antibody-based cancer immunotherapeutics that it says rely on the human immune system to identify unique antibody-target pairs from patients who are experiencing clinically meaningful active immune responses to their tumors. The company claims that this novel approach has led to the discovery of over 1,400 distinct human antibodies that preferentially bind to tumor tissue from patients who are not the source of the antibody.
Lead (and only) candidate is ATRC-101, a monoclonal antibody that has demonstrated reactivity with a majority of ovarian, non-small cell lung, colorectal and breast cancer samples from multiple patients. An IND is on tap for Q4 to be followed by a Phase 1b study in solid tumors in Q1 2020.
The healthcare tech firm is a 50/50 joint venture between McKesson (NYSE:MCK) and Change Healthcare Inc. (formerly HCIT Holdings, Inc.). It is a combination of most of MCK's Technology Solutions unit and Change Healthcare's legacy business known as Change Healthcare Performance.
Mohawk Group (MWK) plans to raise $46.2M to $52.8M by offering 3.3M shares in a price range of $14 to $16.
The consumer products seller would trade at a market cap of $271M at the midpoint of the proposed range.
The company's list of competitors includes Amazon, Helen of Troy, Newell Brands , Frigidaire and any CPG company selling similar products in the e-commerce space. In the areas of proprietary software, Mohawk sees Amazon, Jungle Scout, Helium 10, Scope, Datahawk, DataWeave, Tallridge, Boomerang Commerce, Adobe and AMZScout as competitors.
The Bedford, MA-based biotech says it has a new way to treat severe genetic disorders by precisely upregulating protein expression. Specifically, it is developing novel antisense oligonucleotide (ASO) therapies that target RNA and modulate precursor-messenger RNA to upregulate protein expression where needed to near-normal levels via its TANGO technology platform. Lead candidate is STK-001 for a severe type of epilepsy called Dravet syndrome. It plans to file an IND by early 2020.
Rattler Midstream, a subsidiary of Diamondback Energy (FANG -5.9%) priced its IPO of 38M common units, upsized from originally proposed offering of 33.3M units, at $17.50 per common unit, with net proceeds of ~$631.8M.
Underwriters have an option to purchase up to an additional 5.7M common units at the IPO
Trading was expected to commence on the NASDAQ Global Select Market on May 23, 2019 under the ticker (RTLR); the offering is expected to close on May 28, 2019.
Upon closing, the public will own ~25% of the common units and Diamondback will own the remaining~75%.
Avantor (AVTR) has priced its initial public offering of 207M shares of common stock at $14.00 and a concurrent public offering of 18M shares of its 6.250% Series A Mandatory Convertible Preferred Stock at $50.00 per share.
Underwriters over-allotment is an additional 31.05M common shares and an additional 2.7M shares of the Mandatory Convertible Preferred Stock.
Closing date is May 21.
The company intends to use a portion of the net proceeds received from the offerings to redeem all outstanding shares of its existing Series A Preferred Stock and use the remaining proceeds to repay a portion of its outstanding indebtedness under its senior secured term loan facilities.
Luckin Coffee (LK), which begins trading today on the Nasdaq, has priced its IPO at $17 per share - the higher end of its indicated range - marking the biggest U.S. float by a Chinese firm this year.
In a sign of strong demand, Luckin sold 33M American Depositary Shares, upsizing from the 30M originally planned, raising $561M and giving the Beijing-based coffee chain a market valuation of roughly $4B.
Luckin currently operates 2,370 stores across China and plans to open 2,500 more this year with the goal of displacing Starbucks (NASDAQ:SBUX) as the country's largest coffee chain.
Instacart (ICART) isn't sweating the official end of its partnership with Whole Foods today.
CEO Apoorva Mehta points out out that "pretty much every major grocer" in North America is now partnering with Instacart. Whole Foods is estimated to only account for about 5% of Instacart's business after once being its largest customer.
Mehta is still guiding the company toward an eventual IPO and is aware that profitability will be an important metric in that pursuit.
The sputtering IPOs of Uber and Lyft have raised questions if some private companies would rethink their strategies.
Grocery Outlet Holdings (GO) files for a $100M IPO
The company operates a network of 316 independently operated discount grocery stores. "Our stores are independently operated by entrepreneurial small business owners who have a relentless focus on selecting the best products for their communities, providing personalized customer service and driving improved store performance," reads the self-description in the filing.
Grocery Outlet reported sales of $2.287B for 2018 and net income of $15.9M.
Grocery Outlet lists Walmart, WinCo, Aldi and Lidl as competitors.
Walmart (NYSE:WMT) is considering a stock market listing for its British supermarket arm Asda, whose £7.3B attempt to combine with rival Sainsbury's (OTCQX:JSAIY) was blocked by U.K. regulators last month.
The deal was aimed at helping Sainsbury's better take on Tesco (OTCPK:TSCDY) and was a way for Walmart to reduce its exposure to the U.K.
Any preparations for an Asda IPO would still "take years," according to Walmart International CEO Judith McKenna.
After winning the enviable role of leading the group of banks marketing Uber's IPO shares, Morgan Stanley (MS +0.1%) now faces questions, along with other banks in the group, as Uber shares fell in its first day of trading, Bloomberg reports.
At Monday's close, Uber shares, at $37.10, declined almost 18% from its IPO price of $45.00.
Among questions on Wall Street are: Why did bankers suggest a $120B valuation last year? Did the group set the IPO price too aggressively? Did too many shares go to big investors who failed to keep pledges to hold Uber longer term?
"In retrospect, the underwriters should have done a better job at figuring how strong the true demand was," said Jay Ritter, a professor at the University of Florida's Warrington College of Business, though he admits it hard to figure out how much buy-and-hold demand there is vs. flippers.
One reason could be that demand may lessen when a startup delays its IPO until it becomes a full-sized company and could result in a scenario where many top-tier investors already own shares.
Still Uber hasn't criticized the bank. CEO Dara Khosrowshahi blames the decline on a tough market on the day its shares started trading.
Morgan Stanley is expected to get about $41M in fees from the deal. Goldman Sachs (GS +0.6%) and Bank of America (BAC +1.5%) are sharing at total of about $32M in fees, according to Bloomberg.
Volkswagen (OTCPK:VWAGY) shares are up 2% in Frankfurt after the group said it would press ahead with a listing of its trucks unit Traton in what could be Germany's biggest share offering this year.
The company in March delayed the IPO, blaming market conditions, rising trade tensions and fears about an uncontrolled Brexit.
Jefferies analyst Philippe Houchois said Traton was worth €15B-€16B (of which VW is likely to list up to a 25% stake). "A listing should be positive as the current VW balance sheet is in our view a constraint on Traton's ability to execute on its 'Global Champion Strategy'."
Uber (UBER -11.2%) CEO Dara Khosrowshahi sends an email to employees saying "obviously our stock did not trade as well as we had hoped post-IPO. Today is another tough day in the market, and I expect the same as it relates to our stock."
The exec warns he doesn't expect sentiment to change overnight, and he expects "some tough public market times over the coming months."
But Khosrowshahi advises keeping an eye on long-term value with Uber having "all the capital we need to demonstrate a path to improved margins and profits."
Mohawk Group (MWK) files for an IPO to raise as much as $58M.
Mohawk calls itself a rapidly growing technology-enabled consumer products company with eyes on artificial intelligence and machine learning.
Mohawk generated $73.3M in revenue in 2018 and a net loss of $9.2M.
The company lists as competitors Amazon, Helen of Troy (NASDAQ:HELE), Newell Brands (NASDAQ:NWL), Frigidaire (OTCPK:ELUXF), Trademark Global and any CPG companies selling similar products in the e-commerce space. In the areas of proprietary software, Mohawk sees Amazon, Jungle Scout, Helium 10, Scope, Datahawk, DataWeave, Tallridge, Boomerang Commerce, Adobe and AMZScout as competitors.
For the three months ending with April 30, Slack sees billings of $147.7M to $149.7M and loss from operations of $38.4M to $39.4M. Revenue was $133.8M to $134.8M versus the $80.9M in last year's quarter.
Net Dollar Retention Rate was up 138% versus last year's 149% growth.
Competitors include Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), and Cisco (NASDAQ:CSCO).
Slack will hold an investor presentation today at 9:30 AM ET with a webcast here.
Impossible Foods (IMPSBL) discloses that it raised $300M in a fresh funding round ahead of a potential IPO down the road.
The Silicon Valley-based startup has now raised more than $750M and is valued at more than $2B.
Institutional investors in Impossible Foods include Khosla Ventures, Bill Gates, Google Ventures, Horizons Ventures, UBS, Viking Global Investors, Temasek, Sailing Capital and Open Philanthropy Project.
Impossible Foods is sold at more than 7K restaurants and is soon to feature at Burger King outlets nationally.
The alternative meat company competes with Beyond Meat (NASDAQ:BYND), which trades with a market cap of $3.8B.