Morning Markets: This week’s IPO crop is smaller than most, but let’s show it love all the same.
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The public markets were hot last week. More than eight out of ten U.S. IPOs have featured unprofitable companies this year, so it wasn’t a surprise that Elastic had one hell of a run (it loses money) or that Upwork itself had a stellar debut (it also loses money).
So let’s see what happens this week as Anaplan tries to go public (and probably succeeds) and YayYo tries to go public again (we’ll see). Here’s what you need to know as we kick off Indigenous People day.
Remember Anaplan? It may feel like the firm filed a while back, but we were just digging into its numbers under a month ago.
Since then, the cloud powered, corporate planning service set a $13 to $15 per share price range for its IPO. According to MarketWatch, the company could raise as much as $232.5 million in its public offering, valuing it at “over $1.8 billion.”
Does that valuation make sense? The company had just under $110 million in H1’18 revenue. Double that and you get around $220 million, giving Anaplan a super rough 8.2x revenue multiple at $1.8 billion.
On the growth front, from H1’17 to H1’18, the firm grew 40.6 percent. Sadly, during those two periods, Anaplan’s net loss grew from $16 million to $47.2 million. On a Rule of 40 basis (using net income for the profit metric), Anaplan comes out in the single digits. Oof.
That said, losing money doesn’t seem to be a bad thing in today’s market. Perhaps this company will also raise its range or price above its expected price band.
More like Yay-No. Get it? Each week that we mention this IPO it doesn’t happen. You can read our prior notes on YayYo here, and here. If this IPO actually happens, its success could easily be described as a signal of the market’s top.
And that’s it, I think. A nice, quiet week.