With the economy still strong and the stock market still flying high, some observers are predicting that 2018 will be a good year for IPOs – better than the past few years have been. That sentiment is grounded in the number of technology unicorns currently rumoured to have filed or started preparation for a public debut.
The biggest stock market winners typically make their major price moves within a few months or years of their initial public offering (IPO). So, let’s look at some unicorns likely to go public this year.
Cloud storage company, Dropbox, is expected to go public next week. Dropbox plans to raise $612 million by offering 36 million shares at a price range of $16 to $18.
The IPO values Dropbox at about $7.4 billion, which is significantly below the $10 billion it was judged to be worth at the time of its last private funding round, at the start of 2014. It will list on the Nasdaq exchange under the ticker DBX and is expected to begin trading late next week, though a specific date has not been set.
Founded in 2007, Dropbox has more than 500 million registered users to date. It provides a service which lets users store, share and collaborate on documents, photos and other files online, beginning with a free service with up to 11 million paying customers to date.
The San Francisco based company reported revenue in 2017 of $1.1 billion, up 31% from the previous year. It reported a net loss of $111.7 million versus a $210 million loss in the previous year.
Another so-called tech unicorn coming up is streaming music giant Spotify, which is expected to list shares on the New York Stock Exchange during the week of April 2nd under the ticker name SPOT.
Unlike Dropbox, Spotify won’t issue any new shares or raise funds in its IPO as it is aiming for a direct listing. That means Spotify’s stockholders will offer their shares to investors through the open market without a predetermined price and that its initial offering of shares will not be underwritten.
Spotify will be assisted by Morgan Stanley & Co. LLC as a financial adviser, which will set the opening public price of the company’s ordinary shares in consultation with the designated market maker. The company also revealed that its shares traded up to $132.50 on private markets, bringing its valuation to more $23 billion, according to CNBC.
Founded in 2006, Spotify has more than 159 million monthly active users with 71 million subscribers paying premium at the end of December 2017.
The Stockholm based company reported growth revenue in 2017 close to $5 billion, compared to $3.6 billion in 2016. Operating losses for 2017 were $461.2 million, compared to around $425 million in 2016.
Wildly profitable smartphone maker Xiaomi Inc. has also set its sights on an IPO this year when it selected Citic Securities, Goldman Sachs and Morgan Stanley as its joint sponsors for its proposed IPO, Reuters report.
The initial public offering could be the world’s biggest tech float this year — valuing the company at up to $100 billion – and is expected to come in the second half of the year.
Xiaomi has separately tapped Credit Suisse and Deutshe Bank to work on its IPO, another source told Reuters. The source, however, added that the roles for the global banks haven’t been decided and that no formal mandate has been given to any Chinese bank.
Founded in 2010, Xiaomi was once nicknamed the “Apple of China”, when it became the most popular smartphone brand in its home market. However, in 2016, Xiaomi faced intense competition from other low-cost rivals such as Oppo and Vivo, forcing the firm to reconsider its focus in early 2017. Before the end of 2017, the company announced that they have smashed its yearly sales target of $15 billion after shipping 70 million devices worldwide.
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