Market Consensus: Enthusiastic. Q3 results delivered major upside led by stronger margins. Companies still cite issues with supplies, and labor but demand remains strong. This should support a strong finish for the 2021 IPO market.

Last Week: Score another win for “sustainability” as Allbirds (BIRD) led the week in terms of IPO performance. BIRD basically traded up from the $15 IPO price to be more in line with ONON in terms of EV/Sales – translating to a closing price of $26 for the week. NerdWallet (NRDS) did okay and Arhaus (ARHS) was a flop.

This Week: The calendar this week is pretty exciting and has a total of 10 deals. We’ve updated the current IPO sheet. If you are a paid annual subscriber you can always jump right to the current IPOs roadshow download page.

These are some highlights:

  • Rivan Automotive (RIVN) – This is the gigantic trade of the week. The range has already been lifted from $57-$62 to $72-$74 as everyone wants to pile into this. Amazon, T.Rowe, Coutue, Franklin Templeton, Capital Group, Blackstone, Dragoneer and Soros have indicated that they want $5B of the deal. Demand for EVs exceeds supply and I expect this condition to be true for a long time. With ~955M shares outstanding the $73 mid-point translates to a $70B market cap. The response on the R1T and R1S has been great. Amazon partnering for commercial vans. Using a very broad brush you could work out a price based on RIVN/TSLA Capacity x RIVN/TSLA Value which gets you to a $366B valuation our around $350/share. I’d suggest that figure get discounted until we see how they do with deliveries as they scale up but that still would put it as a multiple of the current proposed range. (Tuesday) This is already setting up to be a high volume “battleground” stock based on their early stage and valuation.

  • Expensify (EXFY) – This is a solid SMB SaaS play providing solutions today around expense reimbursement and branching into related areas like payroll. They have a strong management team and an unusually good story around culture and infrastructure. Their premium valuation (20x EV/S at the $24 mid-point) is justified based on their positioning and unusually high profitability for a player this size. Just for reference Bill.com (BILL) is trading at a $34B valuation on current revenues of $540M (62x sales and is losing money!) (Tuesday)

  • Others worth a look include Backblaze (BLZE) which has a cloud storage solution that’s a better fit for simpler use cases than AWS. Weave (WEAV) is a lot like RingCentral (RNG) which has done very well. Weave is a little different in that they provide some more vertically-flavored solutions for industries, healthcare in particular.

  • I won’t spend much time looking at Lulu’s (LVLU) which looks like just another online women’s apparel store. CI&T (CINT) benefits from a strong market for IT development services but it doesn’t make the cut. I wanted to like Mynaric (MYNA) since laser-based communications interests me but the CEO and roadshow are quite rambling. Nobody should be hiring Credit Suisse as a lead if this is the kind of story you get as a result. Still I will keep an eye on in case insiders know something. Vaxxinity (VAXX) is in a space too crowded IMO. Third Coast Bank (TCBX) is what it is.

  • Hertz (HTZ) – This is an uplisting to the NYSE and one I have liked as a recovery play for a while and own the long-term warrants. Not taking any new action but will continue to hold the warrants.

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Pipeline: Mostly new SPAC filings last week but HashiCorp (HCP) filed which is a noted cloud infrastructure provider. UserTesting (USER) and Braze (BRZE) have already been scheduled for next week (Tuesday.) KinderCare (KLC) is on the schedule too but I’ve heard lots of terrible things about the company. We’ll see on that one.

New Street Coverage: I’m watching for upcoming coverage of Vita Coco (COCO) next week.

Lockups Off: Lots of them are coming off. I’m narrowing my focus to Oatly (OTLY) and dLocal (DLO) on the short side.

Parting Thoughts:

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