Morning Report: After pricing under its proposed range, Sonos’s IPO opened $1 higher per share at $16.
Yesterday evening, Sonos, the maker of popular home stereo equipment, priced its initial public offering (IPO) at $15 per share, far below its proposed range of $17 to $19 per share. Today it opened at $16.
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The $15 per share price valued the firm at around $1.48 billion, not including a greenshoe option of more than two million shares sourced coming from both the company and existing shareholders. Continuing that theme, Sonos is, in fact, a minority seller in its own IPO, with extant shareholders providing the majority of shares.
The firm’s IPO could have valued Sonos at $1.9 billion had it priced at the top of its initially proposed range.
While Sonos’s IPO pricing was likely a disappointment for the firm, executing an IPO isn’t an easy task, even in welcoming markets. Thus far in 2018, the tech and biotech IPO markets have picked up speed, likely due in part to rising valuations among public tech companies.
Normally at this point, I’d make noises about what this particular debut means for other, impending tech IPOs, and also calculate some revenue multiples and the like. But Sonos isn’t a software company, making the exercise moot. Instead, we will keep an eye on Sonos’s results as the day plods along, and update this post when we have a final score.
Up next in IPO world: Arlo Technology, which should price after the bell today.
From The Crunchbase Daily:
- Cisco announced that it will buy Duo Security, a provider of access security and multi-factor authentication tools, for $2.35 billion in cash. Ann Arbor, Mich.-based Duo, founded in 2010, previously raised $122 million in venture funding.
- After years of trailing New York City in total annual venture investment, Massachusetts is taking the lead in 2018. Venture investment in the Boston metro area is on track for the highest annual total in years, fueled largely by a rise in big biotech deals.
- Singapore’s ridesharing darling Grab is reportedly poised to announce another $1 billion investment in its Series H round at a valuation of $11 billion. The cash infusion follows a $1 billion investment from Toyota in June.
- Wireless speaker maker Sonos raised $208 million in its IPO after pricing shares at $15, below the expected $17 to $19 range. The offering sets an initial valuation for Santa Barbara, Calif.-based Sonos of around $1.5 billion.
Illustration Credit: Li-Anne Dias