The IPO Buzz: Dingdong Chops IPO’s Size

Dingdong (Cayman) Limited, a Chinese online grocery delivery platform, priced its chopped-down IPO early Tuesday at $23.50 – the low end of its range – to raise $87 million – nearly 75 percent less than what it had originally planned. The Chinese online grocery delivery startup drastically cut the deal’s size late Monday afternoon – hours ahead of its expected pricing last night. Dingdong (DDL) is expected to start trading Tuesday on the New York Stock Exchange.

Dingdong’s deal was cut late Monday to 3.7 million American Depositary Shares (ADS) – down from 14 million ADS initially – and the price range remained the same at $23.50 to $25.50. (Source: S-1/A filing dated June 28, 2021) The IPO’s proceeds are now estimated at $90.65 million – down 73.57 percent from the original estimate of $343 million under the initial terms, based on mid-point pricing.

Morgan Stanley, BofA Securities, Credit Suisse and HSBC are the joint book-runners of the Dingdong deal.

It was a wild start to a manic week. Sixteen IPOs are on the IPO Calendar – plus one uplift listing on the NASDAQ from the Euronext Brussels. Bankers expect to raise about $9 billion, if every deal gets done.

“Missfresh took all the air out of the deal,” a seasoned IPO trader said of Dingdong.

The stock of Dingdong’s smaller rival, Missfresh Limited (MF), plummeted in its debut on Friday on the Nasdaq.  Missfresh, priced at $13, opened below its IPO price – making it a broken deal – and closed on Friday at $9.66. The stock ended Monday’s regular trading session at $8.84.

Tencent-backed Missfresh, based in Beijing, accelerated its IPO pricing to June 24th – moved up from its initial timing on this week’s roster, with its rival Dingdong also on the IPO Calendar. Dingdong, backed by SoftBank and based in  Shanghai,  is the dominant grocery delivery app in the Yangtze River Delta.  Both companies have high cash burn rates; neither is profitable. Both face intense competition in China’s burgeoning online grocery delivery sector. (For a look at how the two Chinese grocery delivery startups compare, you may want to check this story, published June 11, 2021, by Protocol.)

SentinelOne Raises Price Range

Meanwhile, on the sunny side of the Street, SentinelOne (S proposed) increased the price range of its IPO to $31 to $32 – up from $26 to $29 – in an S-1/A filing early Monday. The number of shares stayed the same – at 32 million. The SentinelOne IPO is now expected to raise $1 billion, up from $880 million in estimated proceeds from its initial terms, based on mid-point pricing.

Morgan Stanley, Goldman Sachs, BofA Securities, Barclays, Wells Fargo Securities, UBS Investment Bank, Jefferies and Deutsche Bank Securities are the joint book-runners of the SentinelOne deal.

Cybersecurity pioneer SentinelOne is viewed as “the deal of the week.”  The IPO is scheduled for pricing tonight (Tuesday, June 29). The stock is expected to start trading Wednesday (June 30)  on the New York Stock Exchange.

“It’s in the right sector at the right time,” a veteran IPO professional said.

The timing of SentinelOne’s IPO is excellent. As TechCrunch points out, the public interest in cybersecurity is high following “a wave of high-profile cyberattacks during the COVID-19 pandemic, with hackers taking advantage of widespread remote working necessitated as a result.”

SentinelOne’s endpoint solution protected its customers when Russian hackers breached the networks of IT company SolarWinds in late December, as TechCrunch noted.

In the prospectus, SentinelOne cites its success in fending off the SolarWinds attack:

“Cybersecurity has always been a game of cat and mouse. The attacker only needs to be successful once whereas the defender must be correct each and every time. It is asymmetrical and simply impossible for humans alone to win. Our data and AI-powered XDR platform changes this paradigm, shifting the advantage to our customers. The results speak for themselves: in the world’s most recent mass-scale cyberattack, SolarWinds Sunburst, we kept each and every one of our customers safe. This is but one of numerous examples where our technology paradigm was battle tested. And, our customers won.”

SentinelOne, based in Mountain View, California, says it pioneered the world’s first AI-driven extended detection and response (XDR) platform to defend against cyberattacks.

Financial Snapshot: SentinelOne is NOT profitable. The company reported a net loss of $153.56 million on $112.5 million in revenues for the 12 months ended April 30, 2021.

SentinelOne is among nine IPOs scheduled to price Tuesday night and to start trading on Wednesday. For details on those other deals and this week’s pricing roster, please click on: the IPO Calendar  

(You can click the hyperlinks on company names on the IPO Calendar and those links will take you to the IPO profiles on IPOScoop.com.)

On the SPAC front: One special-purpose acquisition company, Elliott Opportunity II Corp. (EOCW.U), priced its IPO on Monday night (June 28, 2021) and upsized the deal in the process: 53 million units, up from 50 million, at $10 each to raise $530 million. The Elliott II SPAC intends to focus on acquisition targets in the tech sector.

Next Week

The IPO Calendar for the week of July 5th is blank so far. That’s not unusual. The IPO market typically slows down around the Fourth of July holiday. But this year has been anything but typical with IPO pricings and SEC filings coming fast and furious at a pace that reminds some IPO experts of the late 1990s. It’s possible that some names might land on next week’s calendar before Wall Street’s denizens head off to the beach – or elsewhere – to celebrate the Fourth.

Stay tuned.

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.

(Editor’s Note: This column was updated to include Dingdong’s IPO pricing on Tuesday morning.)