Category: The Battle Road IPO Review
Momentive Global (NASDAQ: MNTV)
Momentive Global (NASDAQ: MNTV), formerly SurveyMonkey, is a leading provider of cloud-based survey software products that enable companies to better engage with customers and employees. Founded as SurveyMonkey in 1999, and based in San Mateo, California, the company is best known for its flagship SurveyMonkey customer feed-back software. An out-of-favor stock, Momentive Global has had a storied history since its IPO five years ago.
The company, then known as SurveyMonkey, priced its 15 million share IPO at $12 per share on the NASDAQ on September 25th 2018. The underwriters subsequently exercised their option to purchase an additional 2.25 million shares. The IPO was led by J.P. Morgan Securities, Allen & Company and BofA Merrill Lynch. Credit Suisse, UBS, Wells Fargo, SunTrust Robinson Humphrey, Code Advisors, Foros, JMP Securities and LionTree Advisors.
Momentive Global is best known for its namesake SurveyMonkey cloud-based questionnaire software that is primarily used for customer feed-back, TechValidate, a marketing content automation software solution, and SurveyMonkey Engage, which is focused on internal employee surveys and feed-back.
In June of 2021, the company changed its name to Momentive Global, reflecting its wider range of customer and employee experience management offerings, which include the addition of market research services. In October of 2021, the company announced that it would be acquired by Zendesk in an all-stock transaction for roughly $4.1 billion. With the intent to expand from customer service to a broader market of global customer intelligence, Zendesk, at the time, appeared to be particularly interested in the SurveyMonkey portion of the business. However, the deal was ultimately rejected by Zendesk shareholders, and Zendesk was forced to terminate the transaction. Zendesk was ultimately taken private in June of last year in a $10 billion acquisition by an investor group led by Permira and Hellman and Friedman.
Today, more than 345,000 organizations around the world use one or more of MNTV’s products, and the company notes that it has over 17 million active users that draw on market insights, brand insights, as well as employee, customer, and product experiences. Over 95 percent of the Fortune 500 use a Momentive product.
In a measure to return cash to shareholders, the company initiated a share repurchase plan in February of 2022 with the intent to repurchase up to $200 million of its common stock. Through the first three quarters of last year, Momentive had repurchased $84 million. At the end of Q3, MNTV held $193 million in cash along with $183 million in debt, for a net cash position of $183 million. The company’s DSOs are 23 days, a reasonable level, attesting to the short-term nature of most of its customer contracts, which are said to be of a duration of one year or less. The company announced an 11 percent workforce reduction, coinciding with its Q3 2022 earnings results. Last month, the company appointed a new CFO, Rich Sullivan, whose experience includes stints at Dreamworks, Twitter, and AT&T.
Peloton Interactive: Riding High on Consumer Spending
Peloton Interactive (NASDAQ: PTON), a high-end fitness products company, is a relatively recent addition to our Battle Road IPO Review Consumer sector coverage. Founded in 2012 and based in New York City, Peloton is expected to record revenue of $1.48 billion in its fiscal year ending June 30th 2020, along with a loss per share of $1.29. This compares to revenue of $915 million in fiscal year 2019, during which the company recorded an operating loss of $113 million, excluding depreciation expense.
Peloton announced the pricing of its 40 million Class A share IPO on September 25th. The deal was priced at $29 per share, and was led by a remarkably large number of underwriters—21 in total—reflecting in part the recent IPO drought. Peloton also announced the concurrent sale of 3.5 million additional shares of its Class A common stock in a private placement to entities affiliated with TCV, an existing shareholder. Following the IPO, roughly 45 million Class A and 236 million Class B common shares outstanding for a total of 281 million shares outstanding, with Class B shares holding 99 percent of the voting power. At a recent share price of $28, Peloton Interactive possesses a market cap of roughly $7.9 billion.
Peloton Interactive positions itself as an interactive fitness platform at the “nexus of fitness, technology and media,” which creates, in its own words, “engaging to the point of addictive” programming for customers. PTON is primarily a high-end exercise bike and treadmill company, with approximately 69 percent of sales coming from connected products, with most of the remaining 31 percent from subscriptions associated with its product sales. Over the last five years, the company has sold over 580,000 exercise bike and treadmills, with about 97 percent of the total sold in the U.S. Roughly 50 percent of revenue comes from sales from its website onepeloton.com. Other channels include showrooms. The company claims over 1.4 million member subscribers, who completed over 58 million workouts in fiscal 2019.
To peruse Peloton’s product offerings on its company website is to realize just how strong today’s consumer economy has become. Pricing for Peloton’s exercise bike begins at $2,245, with a one year limited warranty, and pricing for its tread machine begins at $4,245, with a one year limited warranty. In the most recent quarter ended September 30th, Peloton reported revenue of $228 million, a 104 percent increase over the prior year, along with a gross margin of 46 percent, flat with the prior year. The company’s operating loss was $51 million, as compared to an operating loss of $56 million in the prior year. Post-IPO Peloton has a strong balance sheet, with roughly $1.5 billion in cash, or $5.25 in cash per share, and no debt, though we do note that the company is currently not profitable.
Tags: IPO Research, independent research on IPOs, independent stock research; independent research on Peloton Interactive, independent research on Consumer stocks; independent research on Consumer IPOs.