A nightmarish debut by Uber complicates listing plans at other technology unicorns, particularly the breed of large-cap tech companies that counts WeWork as a member.
WeWork, which provides office space and services to tech start-ups, has built a significant presence in Ireland in the last two years.
Traders have made clear that IPOs by large, hyper-capitalised technology companies with opaque fundamentals and massive losses will face scrutiny.
That’s the big lesson from Lyft and Uber’s disappointing debuts, according to a research firm that focuses on technology listings.
“Two points make a line,” Triton Research wrote in a note to clients. “WeWork recently announced it had filed to go public later this year and we can now safely wonder if they will have the courage to go through with it,” according to the research firm.
Triton warns that WeWork’s loss profile is even worse than Lyft’s and more closely resembles that of another doomed IPO, Snap. WeWork “may need a new plan” after Uber proved investor appetite for these types of listings is weaker than expected. Airbnb could also fall into this category.
But US technology firms with more solid financial footing, such as Slack Technologies, don’t need to tap the brakes on their listing plans. It has years of cash runway on its balance sheet, Triton says, which helps explain why the firm is opting for a direct listing rather than a traditional IPO.
Recent tech IPOs with healthier financials have been surging, including Zoom Video Communications, DocuSign, Elastic and Zscaler.
Separately, established European giants such as Volkswagen, industrial giant Thyssenkrupp, and brewer Anheuser-Busch InBev will likely push ahead with their plans to sell shares despite the Uber setback.
Executives are betting that the market turmoil will have calmed down, and investors will have forgotten Uber’s disastrous IPO, by the time they’re ready to price those sales.
The businesses being sold by VW, Thyssenkrupp and AB InBev are old-school industrial companies. VW said this week it’s planning an IPO of its Traton heavy-trucks division by August that could value the business at €30bn.
Thyssenkrupp outlined plans last week to offer a minority stake in its elevator operation, and AB InBev aims to sell part of its Asian business in an offering in Hong Kong that could value it at €62bn.