This week, the IPO market is recovering from the holiday with the schedule still being
on the lighter side, but picking up. I see it as the calm before the storm as we are
seeing some big IPOs brewing, with some of them going public as early as next week. Today,
we talk about what’s on this week’s calendar plus I’ll give you brand new information
on the bigger ones coming up, Doordash and C3.ai, who just set the terms for their IPOs
and some breaking updates as to when they could start trading. Stay tuned!
Welcome to the Healthy, Wealthy, and Wise channel. As always, I want to thank everyone
in the community for coming back…and due to the new Palantir videos that I put up last
week, we have quite a few new subscribers, so for some of you, this might be your first
time watching our weekly feature, IPO This Week, where we talk about all the big and
not so big companies going public, whether it’s by a traditional IPO, a SPAC or a direct
listing. We’ll be talking a lot more on Palantir in future videos, but this weekly
show could help you find the next Palantir, before it explodes. Its purpose is more meant
to give you overviews than to give you deep analysis, but for the companies that have
a lot of interest in the community or ones that I feel could be a diamond in rough, I
follow those companies up with more dedicated and more analytic-type videos.
We’ll start off by me giving you overviews and IPO details about the new companies looking
to go public this week, as well as companies that have locked up shares expiring this week.
For some of you newer to the channel, if you’re looking for more information on the lockup,
as well as quiet periods, and why we cover them, I have a video detailing the IPO process
and how I applied it to Albertsons Companies which IPO’d earlier this summer and that
video covers these topics, so definitely check it out…I’ll link it for you. And after
we go through that agenda, I’ll give you some brand new details on updated filings
from DoorDash and C3.ai., so stay tuned for that.
But first let’s kick this episode off with the companies that we expect to go public
by a traditional IPO this week. Going into Monday morning, I was only expecting one,
but that number just swelled to 5. Due to this late notice, and my own limited time,
these will be quicker than normal overviews that I'll give, and I’ll credit Nasdaq.
com for the info. And I also don’t have the IPO chart I usually put together, so sorry
about that, but again it’s just a personal time crunch for me…I just want to make sure
I get you the information as timely as possible. As I dig into them and find I have more to
share, I’ll post some updates for you. With that in mind, kicking off the week of
November 30th, we have: 17 Education & Technology Group, ticker YQ.
The Chinese education technology company's in-school classroom solution delivers data-driven
teaching, learning, and assessment products to teachers, students, and parents across
over 70,000 K-12 schools. This is another one of those companies that were positively
affected by the pandemic, as demand for online educational tools skyrocketed. In fact, their
revenue nearly quadrupled in the first 9 months of the year, although the company is still
unprofitable. I don’t have a confirmed date for you yet, but when it does trade, it looks
to be priced between $9.50 and $11.50.
Next we have Seer, ticker symbol SEER. This company develops protein analysis tools and
looks to commercialize proteome research products starting with its initial product, the Proteograph
Product Suite. I don’t have much details on the product at this time, but its first
Proteograph was delivered to one of its first collaborators in October 2020, and the company
expects to place another Proteograph with a second collaborator before the end of 2020.
Seer looks to start trading on Friday with pricing expected to come in between $16 and
$18.
Next we have a biotech named Silverback Therapeutics, ticker SBTX. The company focuses on cancer
treatments with its lead candidate currently in a Phase 1/1b trial for advanced or metastatic
solid tumors, with an update on interim data expected in the 2nd half of 2021. With it
being it such an early stage, keep in mind it could take years at best to get anything
to market. Silverback also looks to start trading on Friday with pricing expected to
come in between $17 and $19.
We have another biotech next, this one Sigilon Therapeutics, ticker SGTX. This company is
also an early stage biotech, with their lead candidate being designed to prevent bleeding
episodes in patients with Hemophilia A. They just recently began a Phase 1/2 trial, so
again, really early on in their development. The company looks to also begin trading on
Friday with pricing expected to be within a range of $17 and $19.
And rounding out this week, we have another Oncology, or cancer, biotech, Kinnate Biopharma,
ticker KNTE. Kinnate's lead candidate is a Rapidly Accelerated Fibrosarcoma inhibitor
for the treatment of patients with lung cancer, melanoma, and other solid tumors. This company
is also early on in their development, as the biotech is now just expecting to file
an Investigational New Drug Application in the first half of next year, meaning that
they have not started any trials yet for their candidate. The biotech looks to start trading
on Thursday with pricing expected to come in between $16 and $18.
Switching to the lock expirations, I did put together my usual chart that lists them for
you, as you can see. This week we have 3 companies with locked up shares expiring on Tuesday,
those being Shift4 Payments (FOUR), Applied Molecular Transport (AMTI), and Dada Nexus
(DADA). And then the following day, we have Calliditas Therapeutics (CALT) and Legend
Biotech (LEGN), each having their pre-IPO locked up shares expiring.
Okay, moving on, we have some big news from 2 of the more widely anticipated companies
looking to go public by the end of the year, DoorDash and C3.ai. Let’s start with DoorDash
as we’ve talked about them in a couple videos so far, one in last week’s IPO This Week
episode where we previewed the big companies coming out soon, but we also had a dedicated
video on them that I put out the day they filed their S1 form; in that video we went
over the highlights from the filing that gave you a look into their business model and financials.
So if you haven’t seen it yet, you might want to check it out. And I’ve already started
putting together a more comprehensive video with more of my own personal analysis that
I’ll release right before they start to trade, so stay tuned for that. But today,
we got some information from the company by way of an updated filing. In that filing,
the company has set terms on how much money they look to raise and an expected pricing
range. So starting with the trading range, DoorDash expects to price their shares between
$75 and $85 and will be listed under the ticker symbol DASH. If they do end up pricing at
the mid-point of the range at the 33 million shares they plan to offer, they would raise
$2.8 billion. If that happens, it would give the company a valuation of up to $30.8 billion
on a fully diluted basis. For some comparison, DoorDash’s last private valuation was $16
billion as recently as of June, so they’re ambitiously looking to double that number
off the heels of the rapid growth they’ve seen from the pandemic. As far as to when
they look to trade, nothing confirmed, but it’s looking like next week will be go-time.
And I’m also hearing that the day could be Wednesday, December 9th. Now keep in mind
that information on pricing and dates with IPOs are fluid and change often, so definitely
stay tuned to the channel with notification bell turned on as I’ll update you guys with
information as I get it. Next is C3.ai, a company that we’ve yet
to talk about on the channel except within the comments. This is an intriguing company,
that to me, is right up there with the 5 big unicorns that I talked about in last week’s
episode. I decided to leave them out of that video, mostly to keep the video from being
any longer than it was, but also because, unlike the other companies, they were looking
to raise less than 1 billion dollars so I made that the cut-off. And even then, their
timing caught me the most by surprise, but I knew when they did IPO, I had every intention
in covering them. For today, I’ll give you a quick overview of the company and give you
the latest out of their updated filing, which also dropped today. For some background, the
company was founded in 2009 and is an Enterprise artificial intelligence software company.
They provide software-as-a-service applications that enable the rapid deployment of enterprise-scale
AI applications of extraordinary scale and complexity that offer significant social and
economic benefit. All of their software applications can be deployed on Azure, Amazon Web Services,
the IBM Cloud, Google Cloud Platform, or on-premise. As to their products, they offer three primary
families of software solutions that, depending of the product selected can allow customers
to rapidly design, develop, and deploy Enterprise AI applications of any type, as well as offer
business analysts without data science training to rapidly perform data science tasks such
as building, configuring, and training AI models. Now for the past few years, we hear
about AI all of the time as far as it being a huge growth area. As for that opportunity,
C3.ai sees a total addressable market estimated to be $174 billion in 2020, growing to $271
billion in 2024, a 12% compound annual growth rate.
According to the company itself, they have total revenue of $156.7 million in the fiscal
year ended April 30, 2020 compared to $91.6 million in the fiscal year ended April 30,
2019, representing year-over-year growth of 71%. And over the same period, their subscription
revenue grew by 75% from $77.5 million to $135.4 million. C3.ai reports that the bulk
of their revenue accrues from subscription software, accounting for roughly 86% of their
total revenue. Some of their bigger name customers include Shell, Koch Industries, the US AirForce,
Raytheon Technologies and AstraZeneca. From an overall net profit or loss perspective,
the company reports net losses growing to $69.4 million in fiscal year 2020 from a loss
of $33.3 million in 2019. So that gives you a little background on the
company and some of its financials. As far as the details of the IPO itself, this is
where we got some new information from the updated filing. At the midpoint of the proposed
range, C3.ai would command a fully diluted market value of $4.3 billion. The company
plans to raise $504 million by offering 15.5 million shares at a price range of $31 to
$34. And of the offering, this is where it gets even more interesting, both BlackRock
and Capital Research Global Investors look to buy a combined 20% of shares in the offering.
And then on top of that, Koch Industries and Microsoft intend to purchase a combined $150
million in a concurrent private placement. Obviously there is going to be some strong
demand on this stock. I’ll keep you updated on an upsizing of the IPO, which I really
expect to happen. C3.ai also looks to start trading next week under the ticker symbol
AI. And I’m also hearing that first day of trading could be on Wednesday, December
9th…again, that could change, but since I did hear this, I wanted to share it with
you. And as we get closer to the actual IPO, like withDoorDash, I’ll make sure to keep
you updated with new information as it comes out.
Alright guys, there you go. I hope you liked the video, and if you did, please push that
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And with that, I’ll wish you a good week of trading….thank you for watching, and
until next time, have a great day!