Finally, the place with the “Million Dollar Bacon” is coming public! (see below)

13 deals were priced last week. Knowlton (KDC) was one we could not figure out and it ended up being postponed. As much as I like Toast (TOST) it opened at an absurd valuation. It’s trending down from $64 and is now $55. On the watch list.

I did exit the week with positions in some of the deals I liked – Clearwater Analytics (CWAN), Cue Health (HLTH), and VersaBank (VBNK).

We’ve got some good ones this week so I’m digging in. As a reminder we are at the end of Q3 and starting soon we will start to see earnings announcements. This is a big deal because analysts have been tweaking down their Q3 numbers from levels that *already looked to be too low.* This sets the stage for bigger potential surprises over the next week or two.

You may also be aware that we’re seeing some pretty major sector rotation into more industrial and basic material names as commodity prices (oil and natural gas in particular) have consistently headed higher. This looks like a fairly durable trend. The IPO market is its own thing but these cross-currents can still make a difference.

As a reminder, our Current IPOs sheet is updated every Monday (free) and has a link to the roadshow downloads (for annual subscribers.)

This Week

There are some big ones on the calendar this week. Lots of eyes will be on Warby Parker (WRBY) which is doing a direct listing and will start trading on Wednesday. Most investors know that the eyeglass market has been dominated by Luxottica for many years in the wholesale market and they acquired LensCrafters and Pearle Vision to get into the consumer market. One of the valuable things WRBY has done is create a new consumer brand in this rather large retail category. The interesting part of the story for me is around their strategy to move deeper into the medical end of the eye-care market with their own remote diagnostics and prescription mechanisms. Depending on where this opens for trading it could be a decent value in the branded consumer space. We’ll have to see on Wednesday.

Amplitude (AMPL) is another direct listing. Amplitude describes their software suite as “Digital Optimization” which is a combination of analytics, sales results, and digital marketing tools. They are still fairly small but it looks like they are planning to list at a $4-5B valuation. This is a popular area these days (even IPO Candy is implementing this kind of approach) and they have built some proprietary technology that may help them capture more of the market before other companies begin to catch up. It’s a good management team as well although they seem young. Again as a direct listing, we’ll have to wait and see where the price settles out. Likely to be very expensive at the outset.

Allvue Systems (ALVU) has a modern platform for asset managers. It looks like a solid product and should appeal to many looking for a more streamlined solution. We’ll see where it trades because the ultimate market size for them is unclear to me. I would think they will be acquired and consolidated into a larger platform company in time.

Olaplex (OPLX) offers advanced hair care products for people that *really care* about their hair and subject it to heavy styling and coloring regimes. They are small but have big growth and are very, very profitable. That’s how you get a $10B valuation on LTM sales of $453M. The current range is $14-16. The people over at $HIMS should be watching this closely. Margins this good should attract more players.

First Watch (FWRG) is a go-to spot for many to have breakfast. One of their menu items “Million Dollar Bacon” is a real treat. The place nearly always has long lines so “it’s so crowded nobody goes there anymore.” The deal is small-ish in the current $17-20 range for a $1.2B market cap on LTM sales of $490M.

First Watch Millon Dollar Bacon

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