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SAN FRANCISCO – Wednesday, Pinterest announced the price of its shares at 19 US dollars during its IPO, a sign of good demand from investors after the renewed appetite for fast-growing but lacking technology companies d & # 39; money.
The price is estimated at $ 12.7 billion for the digital signage display company, which allows users to save images and links from the web. It's a bit above his last private fundraiser, which set the company at $ 12 billion.
By selling $ 19 a share, Pinterest raised $ 1.6 billion from big investors. The shares will trade Thursday on the New York Stock Exchange under the symbol PINS.
Pinterest's prices could bode well for the many "unicorns" – start-ups worth more than $ 1 billion – rushing into public markets. This follows a difficult start for Lyft, which was released on March 28th.
After a euphoric spike on the first day of trading, Lyft shares sank quickly below their I.P.O. price. The company still has a higher value than it was in the private market, but the investors who bought the I.P.O. are underwater and may not want to take more risks in start-ups like Pinterest.
"At the exit of Lyft, there was a lot of drama and concern about the appetite of investors for these loss-making companies," said Vincent Ning, director of research at Titan Invest, investment manager .
He said Lyft may have been too aggressive on his prices, which led Pinterest to adopt a more conservative tactic. Mr. Ning predicted that this strategy would result in a rise in Pinterest shares in the days following its closing date.
This appetite will be tested in the coming weeks. Uber, the giant firm and the main player in this wave of start-ups, will start meeting investors to sell its shares. Slack, a collaborative workplace company, and Postmates, a food distribution company, are also expected to unveil their I.P.O. plans.
These unicorns have been waiting longer than previous generations of tech start-ups to become public, opting for additional fundraising from private market investors. But their lack of profits and their bleeding assessments have not always allowed them to be scrutinized once they have become public.
The parent company of Snapchat now accounts for about half of its current value at the time of its IPO in 2017. Dropbox's share price has remained unchanged since its IPO last year at a valuation lower than its last private market valuation. In 2012, Facebook also experienced a confrontation with the reality of public markets, its stock languishing for months under its index I.P.O. price in its first year as a publicly traded company.
When Pinterest started talking to investors about its I.P.O. title, a conservative price range that values it at less than $ 12 billion, the private valuation it has had since 2015. This strategy could help avoid a frenzied rise and an immediate fall like that of Lyft.
The cautious price was typical of the avoidance of Pinterest's hype. The general manager and co-founder of the company, Ben Silbermann, is an introvert who has built Pinterest slowly and who rarely boasts.
"I do not think it's important to focus on the image of speed compared to what our customers and, hopefully, our future customers really want," he said. said in an interview with The New York Times last year.
Mr Silbermann is "comfortable to be underestimated," said Scott Belsky at the time, one of the company's earliest investors.
While many start-up founders use their I.P.O. flyers as an opportunity to poetically wax on the grandiose missions of their companies, the letter from Pinterest's founder was short. He noted that "sometimes" what is essential is invisible to the eyes "" and thanked the investors for considering the company.
The $ 1.6 billion that Pinterest has collected is small compared to its peers. Lyft raised $ 2.3 billion; Uber should seek up to $ 10 billion.
With $ 628 million in cash on the balance sheet, Pinterest is less in need of money. This is not either lose as much money as Lyft or Uber. Pinterest said it lost $ 63 million on a $ 756 million business in 2018. The company, which sells advertising, is also growing rapidly, posting a 60% jump in its revenue in 2017 to 2018.
The company is facing fierce competition from giants of digital advertising, Google and Facebook, which has Instagram. The company has also listed Allrecipes, a recipes website; Houzz, a website for improving the habitat; and Tastemade, a competing culinary content company.
In his I.P.O. prospectus, Pinterest highlighted its differences from some of these services. Pinterest is not a social media app to hang out with celebrities or spread its life, the company said. It's supposed to be personal. The company's 250 million active monthly users, called "pinners," visit the site to plan their lives, including home projects, weddings and meals.
Even though Pinterest shares are trading slightly below their latest valuation, the company's early investors will reap huge returns. Bessemer Venture Partners, FirstMark Capital and Andreessen Horowitz have important issues. Along with Fidelity and Valiant Capital Partners, they contributed more than $ 1.5 billion to the company. Silbermann is expected to earn about $ 981 million from his 11%.
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