Let’s talk initial public offerings.
WEWORK’S AMENDMENTS: WeWork is reportedly planning “sweeping”
governance changes that would assuage investor concerns as it pushes ahead
with its listing on Nasdaq.
One, it plans to curb the voting power of co-founder Adam Neumann in order to get its upcoming IPO back on track. The company will change its high-vote stock from 20 votes to 10 votes a share to cut back on Neumann’s control of WeWork. [Lucinda and I did a super-voting share explainer once. Watch it here.] WeWork’s original IPO plan included three classes of common stock, with holders of Class A shares getting one vote per share, while Class B and Class C owners got 20 votes for each. This arrangement would have given Neumann the majority of the voting power.
Secondly, no member of Neumann’s family will sit on the board. Rebekah Neumann, his wife, is listed as a founder, chief brand and impact officer of WeWork and founder and CEO of WeGrow, a corporate project to build and run private elementary schools. The company has now eliminated a provision in which she would play a key role in choosing Neumann’s successor if he dies or is permanently disabled in the next 10 years.
Finally, the company also said that Neumann, who previously
said he wouldn’t sell shares for a year after the IPO, would sell no more than
10% of his shareholdings in the second and third years after the offering. He
will also pay back any profits he makes from his real-estate transactions with
Despite questions and concerns from investors, Neumann has
reportedly said privately he is committed to moving forward with the IPO, according
to the WSJ.
CLOUDFLARE HITS THE PUBLIC MARKETS: Cloudflare priced
its shares at $15 apiece Thursday, raising $525 million in the process. The IPO
gives the security provider an initial market cap of around $4.4 billion.
CloudFlare has raised more than $332 million in total
venture capital funding since its inception. Its largest outside backers
include Fidelity, Venrock, NEA, and Pelion Ventures. The company was last
valued at $3.2 billion in the private markets.
Last month, CloudFlare received negative publicity in
connection with the use of its services by 8chan, a forum website that served
as inspiration for the recent attacks in El Paso, Texas and Christchurch, New
Zealand. Even though CloudFlare severed its ties, it went on to list it as a
risk factor in its prospectus.
The company will begin trading its shares on the New York
Stock Exchange under the “NET” stock ticker this morning.
SMILEDIRECTCLUB IPO ISN’T ALL SMILES: SmileDirectClub shares slid 28% in their market debut yesterday, the worst market debut for a unicorn start-up this year. The company’s shares closed at $16.67 after opening at $20.55. SmileDirectClub ranks as the fifth worst debut of the 109 companies to go public this year. The company priced its initial public offering at $23 per share on Wednesday, above the expected range of $19 to $22. It sold 58.5 million shares, raising $1.3 billion and valuing the online dentistry company at $8.9 billion. Thursday’s move values the company at roughly $6.4 billion. Read more.
AN IPO POP: The other unicorn company to make its
public market debut yesterday was biotech company 10x Genomics. Shares surged
as much as 49%. The stock opened trading at $54 and rose as high as $58 per
share midday before closing at $53. The company priced its 9 million shares
Wednesday night at $39 per share, above the expected range of $31 and $35. The
stock is among the top 25 IPO debut performances year to date. Read