Investors Are Excited About Money-Losing Unicorn IPOs That Aren't WeWork
Investors will have two more money-losing unicorns to invest in as SmileDirectClub and Cloudflare are set to go public today and tomorrow, respectively.
SmileDirectClub is trying to disrupt the orthodontics industry by selling teeth straighteners directly to consumers as well as through "SmileShops." Last year, the company reported a 190% increase in sales to $423.2MM, with losses more than doubling to $74.8MM. So what does that mean? It means investors are so excited about another money-losing IPO that shares priced above initial estimates, at $23 per share, valuing the company at $8.9B.
Cloudlfare provides content delivery and internet security services to more than 20MM web properties. Apparently not all of them are approved customers, though, as they also just disclosed they may have violated laws by doing business with terrorists and narcotics traffickers. Last year, the company reported a 43% increase in sales to $192.7MM, with losses increasing more than 8-fold to $87MM. So what does that mean? You guessed right - investors can't wait to get their hands on shares. Cloudflare also raised its IPO range from $10-$12 to $12-$14, valuing the company at between $3.5B and $4.1B.
Based on how recent high-profile unicorn IPOs have traded, it's a coin flip how these two may fare. They could hit their highest level ever the day they go public such as Lyft, Slack and Chewy or hit their lowest level ever the day they go public such as Pinterest and Beyond Meat.
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