MW UPDATE: IPO market has begun pushing back on growth-at-all-costs private companies
By Ciara Linnane, MarketWatch
Struggles at WeWork and Peloton's lackluster debut suggest the IPO window is closed for highly valued, loss-making companies
Endeavor Group Holdings canceled plans for an initial public offering Thursday, the latest sign that the IPO market is slowing down.
The move came as Peloton Interactive Inc.'s stockstruggled in its trading debut, and after We Co. , the parent of the office-space company WeWork, postponed its IPO (http://www.marketwatch.com/story/wework-makes-it-official-puts-its-ipo-on-hold-2019-09-17) and forced its chief executive to step down (http://www.marketwatch.com/story/wework-co-founder-and-ceo-adam-neumann-is-stepping-down-2019-09-24) amid mounting concern about its huge losses and high leverage.
See also: Peloton stock spins in reverse during trading debut (http://www.marketwatch.com/story/peloton-stock-spins-in-reverse-during-trading-debut-as-ipo-market-cools-down-2019-09-26)
"The IPO window is closing on growth-at-all-costs, highly valued private companies that are trying to come to market with excessively valued pricing," said Kathleen Smith, principal at Renaissance Capital, (https://www.renaissancecapital.com/IPO-Investing/US-IPO-ETF) a provider of institutional research and IPO exchange-traded funds.
Endeavor , an entertainment powerhouse that owns sports and modeling agency IMG and mixed-martial-arts organization UFC, among other properties, said earlier Thursday that it would trim its offering to 15 million shares priced at $26 to $27 each, down from 19.4 million shares priced at $30 to $32 each that it targeted in a filing on Sept. 16. After markets closed, the company announced that it would delay the IPO (http://www.marketwatch.com/story/endeavor-reportedly-pulling-its-ipo-after-peloton-struggles-2019-09-26) and "continue to evaluate the timing for the proposed offering as market conditions develop."
Don't miss:Entertainment giant Endeavor is going public: 5 things to know ahead of its IPO (http://www.marketwatch.com/story/entertainment-giant-endeavor-is-going-public-5-things-to-know-ahead-of-its-ipo-2019-05-31)
Smith said after the offering was reduced that she expected the company to complete the deal, given that it is profitable and has a record of putting together media properties and talent, but conceded investors are sensitive about overpaying in the current market.
"It's called price discovery, and it's a cleansing process that will make for better days ahead," she said.
China's Wanda Sports Group Co. Ltd.(WSG) , which is viewed as an Endeavor comparable, had a difficult IPO in July, when it priced a downsized deal at $8 a share, about double where it is trading today, Smith said.
"We know the market has been jittery and IPOs in general are seeing multiple contraction," she said, citing recent pullbacks in Zoom Video Communications , streaming platform Roku(ROKU) and cybersecuritiy company CrowdStrike as examples. CrowdStrike(CRWD) , which went public in June, has a one-month negative return of 30%, she said.
"Even the IPO ETF has had a pullback related to this," she said. "Any company looking to go public and their underwriters should be looking at that."
See:Peloton IPO: 5 things to know about the interactive exercise-machine company (http://www.marketwatch.com/story/peloton-ipo-five-things-to-know-about-the-interactive-exercise-machine-company-2019-08-28)
(http://www.marketwatch.com/story/peloton-ipo-five-things-to-know-about-the-interactive-exercise-machine-company-2019-08-28)WeWork said earlier this week that co-founder and Chief Executive Adam Neumann is resigning from that role, amid mounting concerns from some of the company's big investors about huge losses and liabilities. The company has inevitably been compared with Uber(UBER) and Lyft(LYFT) , the ride-sharing giants that went public this year in deals widely viewed as flops.
"Softbank's Vision fund has invested in many highfliers such as Uber, WeWork and Slack," said Per Roman, co-founder and managing partner of boutique investment bank GP Bullhound.
Don't miss: WeWork is going public: 5 things to know about the office-sharing company (http://www.marketwatch.com/story/wework-is-going-public-5-things-to-know-about-the-office-sharing-company-2019-08-14)
Those companies relied on increasingly extravagant funding rounds that came at higher and higher valuations: "land grabs fueled by venture capital," he said.
Read also:Uber stock is a buy-one-get-one-free deal, analyst contends (http://www.marketwatch.com/story/uber-stock-is-a-buy-one-get-one-free-deal-analyst-contends-2019-09-16)
Even Oracle (http://www.marketwatch.com/articles/oracles-larry-ellison-calls-uber-and-wework-almost-worthless-51568924122)(ORCL)founder and Executive Chairman Larry Ellison (http://www.marketwatch.com/articles/oracles-larry-ellison-calls-uber-and-wework-almost-worthless-51568924122) has criticized the trend, describing Uber and Lyft as "almost worthless" at a September event in San Francisco, as MarketWatch sister publication Barron's reported.
The Renaissance IPO ETF(IPO)has fallen about 7% in the last three months but remains higher by 23% on the year, outpacing the S&P 500's18% gain and the Dow Jones Industrial Average's15% rise.
-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
September 29, 2019 13:03 ET (17:03 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
此举出台之际，peloton Interactive Inc.的股票在上市首日陷入困境，办公空间公司WeWork的母公司我们公司(We Co.)推迟了IPO(http：/www.market watch.com/STORE/WeWork-make-it-官方-put-its-IPO-on-hold-2019-09-17)，并迫使其首席执行官下台(http：/www.market watch.com/STORE/WeWork-co-方正创始人兼首席执行官-Adam-Neum.
提供机构研究和IPO交易所交易基金(ETF)的复兴资本(Renaissance Capital)(https：/www.renaissececapital.com/IPO-investment/US-IPO-etf)负责人凯瑟琳·史密斯(Kathleen Smith)表示：“IPO窗口正在关闭，那些不惜一切代价实现增长、估值高的民营企业正试图以估值过高的价格上市。”
“我们知道市场一直很紧张，IPO总体上出现了多次收缩，”她表示，并以Zoom Video Communications、流媒体平台Roku(Roku)和网络安全公司CrowdStrike最近的回调为例。她说，CrowdStrike(CRWD)于6月份上市，一个月的回报率为负30%。
参见：peloton IPO：关于交互式健身器材公司的5件事(http：/www.market watch.com/Story/peloton-IPO-Five-Things-to-Know-the-Interactive-Exercise-Machine-company-2019-08-28)
(http：/www.market watch.com/story/peloton-ipo-Five-Things-to-the-Interactive-Exercise-Machine-Company-2019-08-28)WeWork本周早些时候表示，联合创始人兼首席执行官亚当·诺依曼(Adam Neumann)将辞去这一职位，因为该公司的一些大投资者对巨额亏损和债务越来越担忧。该公司不可避免地被拿来与优步(Uber)和Lyft进行比较，这两家拼车巨头今年上市，交易被普遍视为失败。
精品投资银行GP Bullhound的联合创始人和管理合伙人佩尔·罗曼(Per Roman)表示：“软银的愿景基金已投资于许多高端企业，如优步(Uber)、WeWork和Slack。”
甚至甲骨文公司(Oracle)创始人兼执行主席拉里·埃里森(Larry Ellison)创始人兼执行主席拉里·埃里森(Larry Ellison)也批评了这一趋势，称优步和Lyft在9月份的一次活动中“几乎一文不值”，甚至甲骨文也批评了这一趋势，称优步和Lyft在9月份的活动中“几乎一文不值”
复兴IPO ETF(IPO)在过去三个月下跌了约7%，但仍比去年高出23%，超过了标准普尔500指数(S&P500)18%的涨幅和道琼斯工业平均指数(Dow Jones Industrial Average)15%的涨幅。
September 29, 2019 13:03 ET (17:03 GMT)