WEEK DQ 8
lhutchins
DQ8.docxInstruction:
In your responses to your peers, explain whether you agree or disagree with the assessments of their selected IPOs. Can you identify additional economic and market factors that may have influenced the results of the IPO?
Student 1 Burhardt:
The Initial Public Offering that I will be viewing is the IPO of Snapchat. The IPO date was March 2, 2017 and they raised $3.4 Billion United States Dollars (USD) from the 200 million shares that they sold. The shares that they sold didn’t come with any voting rights (Wagner, 2017). The initial IPO started off at $17 per share in which valued the company at $24 Billion USD. The valuation grew to over $31 billion USD and $24 USD per share. One big reason for an increase in the stock was that NBC Universal disclosed a $500 million dollar stake at the IPO (Helmore, 2017).
On the Initial IPO day, it appears that the stock was slightly undervalued/Underpriced at open as it rose to over $24 USD at the end of the day. By them choosing to open at $17 was more of a conservative approach. They did initially generate additional value for the shareholders but that kind of dissipated after a few months. The reason being is because they have been reporting negative earnings year to year and not making any profit, that kind hurts them and the stock price.
They left a lot of money out there by keeping the IPO price so low. By selling at an increased share price would have increased the balance sheet on adding to the book value. I think that the IPO was initially successful to start off even though they could have capitalized better on stock selling. There was literally 12 times more orders for the stock than what was actually offered (Picker, 2017).
Response:
Dear Class,
Uber started in 2009 quickly rose to become a force to be reckoned with in the ride share market, this lead to Uber becoming one of the most recognized brands in the world with the ease and convience of ordering a ride. Though the journey has not been without a checkered history with claims of sexism, or its way of doing business Uber has managed so far to come through the fire still standing (Sandler, 2019).
Initial IPO expectations had the stock price coming in at around $45 - $50 dollars per share, with high expectations that saw the company have a 120 billion dollar evaluation at one point in time before the highly anticipated IPO. Even so with such a highly anticipated opening the firm came away a little short with the stock price closing in at $42 dollars per share and while this is not a bad Initial Purchase Offer it was disappointing that the price came in below forecast.
Because as big as Uber has become it still remains in the red for making profits and I feel that investors will be wary not only due to this but the many instances of complaints the company has obtained from customers about the drivers they have riden with, for this reasons I feel this IPO was not a success (Cohan, 2019). Class what are your thoughts about Uber?
Response:
