Vroom’s new IPO pricing: Hello and welcome back to our regular morning view of private companies, public markets, and the gray areas in between.
Last week we found that the IPO window was open, and apparently inappropriate reality compared to the country’s strong unemployment figures and what they seem to mean for corporate health. However, since the markets are reaching record highs, it has become clear that investors are open to buying new, growth-oriented stocks.
Our final point last week was simple: the open IPO Window and its implied sentiment were good news for unicorns. Valuable private companies tend to lose more money than if they wanted to go public in normal times. But since the IPO window is now open to more than just profitable companies, is it certainly also open to unicorns?
New insights suggest this. Let’s explore Vrooms this morning New IPO prices and why the digital used car market’s ability to charge more for its equity than the company originally expected was a good sign for itself and other money-losing unicorns that may have feared the IPO window for the rest of the year 2020 was closed.
New prices, equal margins
On Friday, Vroom changed its expected IPO price range from $ 15 to $ 17 a share and increased it to $ 18 to $ 20 a share. The number of shares the company plans to sell on its debut – 21,562,500 – remained unchanged. As a result of the price change, Vroom’s maximum gross increase increased from $ 366.6 million to $ 431.3 million, which represents an enormous increase for the unprofitable company.