2019 is set to be the year for IPOs, and so far it hasn’t disappointed.
Successful IPOs of 2019 already include retail giant Levi Strauss, who took a higher price than expected when it went public in mid-March, and transportation giant and Uber-rival Lyft, who went public at the end of March – beating Uber to the finish line.
Tradeweb, who build and operate over-the-counter marketplaces for companies trading fixed income and derivative products, also went public at the start of April, followed by virtual pinboard Pinterest.
But do not kick yourself for not getting involved in those opportunities from the opening bell, because 2019 has many more IPOs to come. Below are some exciting upcoming IPOs.
IPO 2019 possible valuation: $120 billion
Uber Technologies, a transportation network company founded in 2009 and headquartered in San Francisco, offers peer-to-peer ridesharing as well as a food delivery service. The company operates in an impressive 785 metropolitan areas across the globe.
Uber has been so disruptive in the private transportation industry and the ridesharing economy that it has paved the way for many competitors and similar services.
At the start of the year, Uber and Lyft were racing to be the first to IPO – Lyft won, and now Uber is soon to follow suit after filing for IPO on 11 April. The filing stated that the company intends to trade shares on the New York Stock Exchange (NYSE) under the ticker ‘UBER’.
The size of the IPO is yet to be specified, but various reports suggest Uber will seek an IPO valuation of $100 billion or more, offering around $10 billion worth of stock. Reports have suggested the company is valued at $120 billion.
The S-1 filing – the SEC filing used by companies planning on going public – gave a detailed insight into the company’s earnings that had previously been mostly speculation. Uber reported year-over-year revenue growth of 42% in 2018 to $11.3 billion, with gross bookings of $49.8 billion. In 2017 the company lost $4 billion.
It was acknowledged in the S-1 filing that the company had incurred substantial losses since its inception and stated that revenue growth has slowed in recent quarters. This amplified investor concerns regarding the profitability of the company, given that Uber’s expenses were high (the company spent $14.3 billion in 2018).
However Uber also has revenue streams from its food delivery service, Uber Eats, which turned over $1.5 billion in 2018.
IPO 2019 possible valuation: $35 billion
Airbnb, headquartered in San Francisco, was founded in 2008 and operates a global online hospitality-cum-home sharing service and marketplace accessible via its website and mobile apps. Users can book or offer lodging to privately owned accommodation, with Airbnb acting as a broker.
With the Airbnb IPO expected at some point this year, many traders are taking a look under the bonnet of the firm, considering whether to get in as it goes public.
Airbnb is active in over 191 countries and sports an impressive rental listing database of 4 million properties. According to TechCrunch, in the third quarter of 2018, the company announced it had turned over more than $1 billion in revenue. It also had a positive EBITDA for the last two years in a row.
Airbnb purchased last-minute boutique hotel provide HotelTonight in March 2019. In the process of doing so, it sold common shares at a price of around $120 per share. This would value the company at approximately $35 billion, which is only a fraction more than its last private valuation two years ago and less than Forbes’ estimated 2018 valuation.
Airbnb’s most recent internal valuation – completed for accounting purposes – has put the value at a higher $38 billion, according to sources.
The company is clearly in a sound financial state, but the valuation may come as a surprise to some investors who would have expected a more substantial jump in share price considering the two-year-old valuation.
Company sources have indicated that they may well be expecting a higher stock price when they come to IPO. Regardless of when this upcoming IPO pans out, Airbnb is a company to keep your eye on.
IPO 2019 possible valuation: $47 billion
WeWork is an American company, founded in 2010, that provides shared workspaces to startup firms, freelancers, small businesses, entrepreneurs and large enterprises. The company was valued at $47 billion after a cash-injection from the Japnese giant SoftBank.
The We Company (formally branded as WeWork) is now considering an IPO – a lot sooner than investors expected – having filed paperwork with the SEC on Monday 29 April. Analysts predict a downturn in revenue from its core office-leasing revenue stream, which has so far yet to make a profit, but yet is still aiming to IPO by the end of 2019.
WeWork exhibited an exceptional growth rate and now operates three branches: WeWork; a shared workspace provider, WeLive; an apartment and flexible-rental provider; and WeGrow, an entrepreneurial school.
The company’s exact IPO date and share price are still mere speculation, however analysts have been sceptical of WeWork’s new $47 billion valuation. This scepticism has been further perpetuated by the fact that SoftBank reduced their funding proposal on their latest round of investment, with an initial proposal of $12 billion that was reduced to $2 billion.
WeWork’s CEO Adam Neumann claims that reduced funding will not affect the company’s IPO, and the firm is said to have turned over $2.5 billion during the course of one year, as announced by the CEO in January.
The IPO, expected soon, could provide an interesting opportunity for traders. Although the idea of leasing office buildings and renting it out on short all-inclusive deals to multiple tenants is not a new one, with the likes of Regus in the business for decades, WeWork’s use of events, bars and trendy interiors seems to appeal to a broader audience than the more traditional providers.