The IPO Buzz: Waiting for Peloton, WeWork & More

Peloton became the latest unicorn to slide into the IPO pipeline with its public S-1 filing last week, giving IPO investors another high-profile name to track when the IPO market swings back into action after the Labor Day holiday break. There are no IPOs scheduled to be priced this week. There is, however, the steady drumbeat of anticipation for the IPOs of Peloton, WeWork, Cloudflare, McAfee and DataDog. WeWork’s IPO is expected in September, while the others are likely later this year.

The last IPO to make its debut during the summer of 2019 was on Aug. 15th. That is not unusual. Traditionally, the IPO Calendar shuts down about two weeks ahead of the Labor Day break.

Cranking Up the IPO Machine

September’s first IPO tends to get priced in the middle of the month, IPOScoop records show. (This data excludes unit offerings.)

Let’s take a look at the trade dates for the first IPO of September over the past five years:

  • Sept. 12, 2018
  • Sept. 14, 2017
  • Sept. 15, 2016
  • Sept. 11, 2015
  • Sept. 12, 2014

On Tuesday, Sept. 3rd, IPO bankers and investors will get back to work – with many returning from a few weeks of fun in the sun.

In the meantime, the U.S. Securities and Exchange Commission’s filing window has been busy. Let’s check out the traffic.

Ride On

Peloton Interactive (PTON proposed), based in New York, says it is the world’s largest interactive fitness platform with a loyal community of over 1.4 million members. The company pioneered connected technology-enabled fitness. Peloton sells high-tech exercise bikes and treadmills plus subscriptions to the streaming of interactive fitness classes led by 29 instructors. TechCrunch, in a story published on Aug. 31st, called these instructors “Peloton’s 29 Secret Weapons.”

Peloton brought in $915 million in revenue in the last 12 months, while its net loss was $195.6 million during that period, according to its public S-1 document, or prospectus, filed on Tuesday, Aug. 27th.

Off to Work We Go

We Co. (WE proposed) is the New York-based parent company of WeWork, which provides co-working spaces to freelancers and companies ranging in size from small entities to big global players. Its business model is based on flexible access to these co-working spaces. The company took in about $2.59 billion in revenues in the past 12 months and recorded a net loss of about $1.67 billion for the same period, according to its public S-1 document, or prospectus, filed on Aug. 14th.

WeWork’s IPO, which is expected in September, is drawing scrutiny from Wall Street and the financial press over the contrast between its strong revenue growth and its big losses. The New York Times took a look at this issue in a story published Aug. 29th under the headline: WeWork Is Going Public. Are Its Numbers Too Private?

Protection in the Cloud

Cloudflare (NET proposed) is a San Francisco-based SaaS cloud platform that simplifies content delivery and network security services for businesses of all sizes around the world. About 10 percent of the Fortune 1,000 companies are paying Cloudflare customers, according to the prospectus, filed Aug. 15th. (SaaS stands for “software as a service.”)

The Cloudflare IPO is likely to happen in September, according to Business Insider. Shortly after Cloudflare filed its public S-1 document, described Cloudfare as “a real tech giant in the making – with a female co-founder,” in a story published Aug. 16th.

Datadog and the Cloud Pack

Datadog (DDOG proposed) is a New York-based monitoring and analytics platform for IT developers. The company filed its public S-1 document, or prospectus, on Aug. 23rd. Financial headline writers had a lot of fun with the news, coming up with gems like this one by Forbes on Aug. 23rd:

Datadog Joins Pack Of Cloud IPOs, A Big Win For N.Y.s Emerging Enterprise Tech Scene

Datadog differs from many other tech unicorns, in that it has growing revenues and slim losses. The company had about $266 million in revenue for the past 12 months and a net loss of about $24.7 million for that same period, according to its prospectus.

McAfee Coming Around Again

McAfee, Inc., the company founded by antivirus pioneer John McAfee in 1989, is creating plenty of buzz with the speculation that it’s planning to go public again. Bloomberg reported last week (on Aug. 27th) that McAfee has hired Morgan Stanley and Bank of America, plus a full banking syndicate, to pursue an IPO, which could be priced this fall. Nothing is carved in stone, and the plans could change, according to Bloomberg, which quoted a person “who asked to not be identified because the matter is private.”

McAfee went public the first time in 1999. McAfee is partly owned by Intel Corp., which bought the Santa Clara, California-based company in 2010 for about $7.7 billion. TPG Capital and Thoma Bravo also have stakes in McAfee.

Week of Sept. 9th

The IPO Calendar is blank for the week of Sept. 9th. That’s not surprising, considering the market traditionally starts picking up in mid-September. But that could change when the SEC’s filing window opens again for business on Tuesday morning.

Stay tuned.

Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.