What's an undercorn, the strange term used for the Pinterest IPO

• Pinterest is preparing for an IPO that would put its value at $ 11.3 billion.
• That's $ 1 billion less than the value of the business.
• "Licorne" companies – that is, companies with a value greater than $ 1 billion – that are made public at valuations lower than their private valuations are sometimes referred to as "underbonds".
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In a document filed Monday, Pinterest, an image sharing service and pinning of images, revealed that its IPO program was planning to sell 75 million shares. at a price between 15 and 17 dollars.

Pricing limits Pinterest's public valuation to a maximum of $ 11.3 billion – even though its most recent value was $ 12.3 billion.

Being valued at more than a billion dollars, Pinterest easily surpbaded the alleged unicorn status, but a lower value than it previously was means that Pinterest qualifies for another piece of more obscure capitalist jargon .

Read more: Zoom videoconferencing company could be valued at $ 8 billion at next IPO

A New York Times article on Pinterest's latest rating qualifies the social media company as "undergrowth". The word "undercorn" seems to have been coined around 2014 by economic journalist Dan Primack. Primack's original definition, as reported by blogger Ian Sigalow on venture capital, concerned a company that had achieved unicorn status (ie, a valuation of more than $ 1 billion) before to fall below this valuation.

However, the term seems to have evolved since then to mean a unicorn that becomes public at a lower price than its last private stock valuation. He found at least one fertile ground with CVs. In 2017, the co-founder of the venture capital firm Costanoa Ventures Greg Sands is disguised as a sub-ring for Halloween.

A start-up that becomes an understory will by definition leave some of its venture capital founders with a loss on their investment. And it's a flaw on the narrative of growth that is at the heart of the identity of a tech start-up.

But the task may not be permanent. As the New York Times points out, both Box and Square are publicly traded as "undercurrents" and each has market capitalizations well above their valuations in private markets.