I lied, we have one more piece to write about Domo!
When Domo finally went public, things for the Utah-based former unicorn seemed to be looking up.
After enduring a gauntlet to get to the public markets including a snarky media landscape and a dramatic curtailment of its valuation, Domo shares went public and went up. After endless bad news, there was something for the firm backed by Benchmark, IVP, and TPG to celebrate.
Sadly, no more.
Domo’s $21 per share IPO price valued the company at around $510 million. In its first day of trading, Domo shares did shoot north. It seemed to be a vindication for the company–yes it had had to consume bitter medicine, but after all that pruning and chopping and rejiggering, it was doing what companies should do after they go public. Namely, go up.
But a 30 percent run on its first day was, as it turns out, not enough.
The company’s shares have fallen since its debut. Indeed, yesterday they fell under the company’s $21 IPO price, deleting its positive post-IPO run. Today the company’s shares fell another 5 percent to just $19.89 per share.
At its end-of-day stock price, Domo is worth $496.3 million according to Yahoo Finance. That figure is, of course, far below the firm’s last private valuation of $2.3 billion, but so was the firm’s IPO price. What matters more is that Domo’s attempt to get its valuation down to size has, it seems, not succeeded; even at its reduced price, investors are bidding its equity down.
But worse, perhaps, is that the share declines have pushed Domo’s market value further under the sum of money that it raised as a private company. According to Crunchbase, Domo raised just under $700 million as a private firm. That means, at its current valuation, Domo converted that private capital into market cap at a rate of $0.72 for each invested dollar. That figure becomes worse when you take into account monies raised during the IPO itself.
While you could argue that a company in such shape as Domo shouldn’t have been able to go public in the first place — I could argue that either way, I think — it may also prove fair to argue that the market is slowly rectifying its choice.
Slightly amazingly, Domo is still trading at 4.3 times its trailing revenue, and 4.6 times its ARR, measured with its most recent quarter’s data.1
This time I won’t close by saying that we are done with Domo, as I was wrong before. But, I do hope we can move to more interesting, private companies.
- For a quick ARR calculation, we used Domo’s April 30, 2018 quarter’s subscription revenue times four.