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Morning Report: Recent Unicorn IPO Carvana Continues To Skid

Morning Report: Carvana shares are off again today, as the firm speeds towards a one-third cut to its value post-IPO.

Shares of technology-powered auto vendor Carvana are off more than 5 percent today, landing a few nickels above the $10 mark in morning trading. The company went public for $15 per share.

It’s early days for Carvana, which debuted just last week. As such, it’s too soon to predict much about its future as a public company. What we can say is that public investors, which welcomed entries by recent tech IPOs like Yext and Mulesoft and Snap and Alteryx and Okta and Cloudera – all of which enjoyed first-day pops – failed to extend the same courtesy to Carvana.

Here’s the chart of Carvana’s performance since its IPO (via Yahoo Finance):

That is not a great result. Still, we should not read too much into one IPO falling from its list price. It was bound to happen eventually as more companies opt for public offerings.

That Carvana is the company losing air after its public leap is perhaps not the most shocking surprise. After all, the company posted steeply increasing losses on its books, including its largest-ever listed loss in the final quarter, which was reported in its S-1:

This loss was caused by a decline in the company’s gross margin per car, which fell from $1,347 to $435 between the third quarter of last year and the fourth, the same period that saw its loss reach a new low.

Regardless, Carvana managed to price mid-range and add a bucket of cash to its books. That’s a successful IPO regardless of what happens after the first public trade. Today, however, Carvana is showing that the market isn’t as enthused about all technology offerings as we might have thought.

From the Crunchbase Daily:

Cisco buys Viptela for $610M

  • Cisco has been spending a lot of on acquisitions recently, and apparently it’s not finished yet. The networking giant announced it is paying $610 million to buy Viptela, a software-defined wide area network company. San Jose-based Viptela previously raised about $109 million in venture funding.

Aurea acquires Jive for $462M

  • Jive Software, a provider of online collaboration tools, announced that ESW Capital will acquire the company for $462 million. The price represents a premium of about 20 percent over Jive’s prior public market valuation. ESW plans to combine Jive with its customer experience software platform Aurea.

Theranos settles fraud suit

  • Theranos, the scandal-plagued blood testing provider, said it has settled two lawsuits brought against it by Partner Fund Management, a hedge fund that previously invested nearly $100 million in the company. The suit charged that Theranos lied about its blood testing technology in order to line up financing.

Tech IPOs are on a tear

  • Tech IPOs are going strong this year. All told, nine technology companies have gone public on US exchanges so far this year, compared to just one by this time last year. The aggregate value of the 2017 IPOs is an impressive $37.5 billion dollars, according to a Crunchbase News analysis, with Snap by far the most valuable, followed by MuleSoft and Okta.

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