respond two students discussion 100words for each
Student A:
Sonos Incorporated is an audio company that sells speakers & other components- namely portable speakers, headphones, home audio systems etc. It’s kept up to date with modern tech trends such as wireless/Bluetooth connectivity, voice-enabled functions and internet connectivity.
Sonos estimates net proceeds from sale of common stock to be approximately $90.5 million at an estimated price of $18/share (which is considered the mid-point of share price value estimates). These numbers come after deductions of underwriting discounts and offering expenses are paid.
Sonos leaves room for a $1 increase or decrease in share price, which could change net proceeds by $5.2 million in either direction — assuming number of shares offered does not change.
Sonos also leaves room for a 1.0 million increase or decrease in number of shares offered, which would change net proceeds by $16.9 million in either direction.
Purposes for offering include: obtaining additional capital, create a public market for private stock, facilitate future access to public equity markets, increase awareness of customers for the company, and improving competitive position.
Plans for net proceeds include: sales & marketing activities, research & development, and general/administrative expenditures. If there are leftover funds available, Sonos plans to use them for the acquisition of, or investment in complementary businesses, products, services, technologies, or other assets.
My Evaluation:
As far as stock price is concerned, I think the cited estimated range of $17-$19 is a fair price for what Sonos plans to do. It is a recognizable company that has been around for 16 years– and it seems like the reason for the IPO now is to expand and improve its standing in a competitive market. ~$18/share (to me) is a fair price to pay for potential growth, but also not terribly expensive if investors take a loss. A few things that concern me are that Sonos has not yet determined its estimated future expenses, so it cannot provide a budget for IPO proceeds yet. Also, Sonos has no plans/agreements for any acquisitions or investments– so it could either be waiting for the ‘right’ deal(s), but the IPO proceeds being used to fund/expand normal operations raises concerns about company leadership. All in all, however, I don’t think this would be a terrible investment for someone with the money to see what happens.
Student B:
An upcoming IPO that i find to be interesting is for Sonos, a high end speakers company. I was at first surprised that Sonos had not already gone public, or been acquired by a larger technology company., since they have been around for a long time. In my experience with Sonos speakers, I have learned that they are a top quality product, and with ease they are connected to bluetooth devices and can be played by separate sources in different rooms of a house. So, overall i believe in their product and have high hopes for the company and its IPO. According to Nasdaq, Sonos aims to price its share between $17 and $19, which I feel may be a bit on the high side, as they are not as big a company as I first thought. It will raise approximately $105 million after selling its more than five and a half million shares. Sonos has announced last year they brought in a billion dollars in revenue, a steep 10% increase over the previous year, and I believe these numbers are sure to go up after its IPO< especially considering the increasing popularity of in home entertainment systems and voice assistants. Overall, I am confident in Sonos and believe it may be a good investment at its IPO coming this August.
