5 ms·
> We have a history of net losses and may not be able to achieve or sustain profitability in the future. I never got this... Why go public if you literally say
by cremp 7y ago
> We have a history of net losses and may not be able to achieve or sustain profitability in the future.
I never got this... Why go public if you literally say you won't make money?
Who would buy stock in something that will not return a positive?
Are they starving for money and hope some public trading gets them a boost?
Edit:
It seems to be following the same pattern as the other tech IPOs recently, just to cash out the early investors.
- khuey 7y agoThey're not saying they won't make money, they're saying they "may not be able to" make money.
- tiernano 7y ago> Who would buy stock in something that will not return a positive? cough uber... cough
- cremp 7y agoExactly, and the real reason they did it was to cash out.
- meesles 7y agoThis comment is on every S1 thread. And every time someone mentions that it is essentially standard copy for all S1s, because you can never guarantee anything on the market.
- schneidmaster 7y agoRight, it is strongly in your best interests to be as pessimistic as possible in your disclosures. Even if you expect to turn a profit next year, the market is finicky, and if you don't meet your projections then absent these sorts of S1 disclosures you open yourself to legal liability for misleading investors.
- cremp 7y agoExcept something that is not the same for all S1's, is the history of losses. For a business to really give a positive, something needs to change, otherwise they stay negative. Edit: > and we expect we will continue to incur net losses for the foreseeable future That is not a common statement.
- nmjohn 7y agoSearch google for `site:sec.gov and we expect we will continue to incur net losses for the foreseeable future` - a nearly identical phrase is a frequent occurrence
- 6cd6beb 7y ago>We have incurred net losses in all periods since we began operations and we expect we will continue to incur net losses for the foreseeable future. The admission that "we've never made money and there's a good chance we never will" being boilerplate S-1 copy is monstrously troubling. When no one needs to see that a company can made a dollar before investing because profit is for suckers and this company's probably going to be a unicorn, maybe that's the stock tip from the shoeshine boy.
- notfromhere 7y agoYou can't legally guarantee a return unless you actually guarantee a return
- 6cd6beb 7y agoFair enough, but there may be a small middle ground between "guaranteeing a return" and "never made a dime in profit and in fact is burning through millions or billions of dollars annually with no expectation to stop any time soon"
- notfromhere 7y agothat's why you should learn how to read financial statements before making investments in instruments like stocks.
- throw03172019 7y agoIs this just a risk factor that the SEC applauds or forces?
- SanchoPanda 7y agoThey selectively enforce scenarios where a material risk was not covered adequately. Harshly.
- PatrolX 7y agoIt's legal SOP for IPO's, to protect themselves in the event of lawsuits. It doesn't "literally say" they won't make money, that's you twisting it that way.
- hprotagonist 7y agothis is a normal sentence in every S-1 you care to name. EXTREMELY SERIOUS WARNING (printed on a separate page, in red letters on a yellow background): Unless you are as smart as Johann Karl Friedrich Gauss, savvy as a half blind Calcutta bootblack, tough as General William Tecumseh Sherman, rich as the Queen of England, emotionally resilient as a Red Sox fan, and as generally able to take care of yourself as the average nuclear missile submarine commander, you should never have been allowed near this document. Please dispose of it as you would any piece of high level radioactive waste and then arrange with a qualified surgeon to amputate your arms at the elbows and gouge your eyes from their sockets. This warning is necessary because once, a hundred years ago, a little old lady in Kentucky put a hundred dollars into a dry goods company which went belly up and only returned her ninety nine dollars. Ever since then the government has been on our asses. If you ignore this warning, read on at your peril you are dead certain to lose everything you've got and live out your final decades beating back waves of termites in a Mississippi Delta leper colony. Still reading? Great. Now that we've scared off the lightweights, let's get down to business. EXECUTIVE SUMMARY: We will raise [some money], then [do some stuff] and increase shareholder value. Want details? Read on.
- aaronbrethorst 7y agoCryptonomicon, Neal Stephenson. You have quite the fitting user name.
- tyingq 7y agoWell, revenue of ~$130M, net loss of ~$37M. They aren't bleeding money like Uber or WeWork. You can imagine many ways they could close that gap, and in fact, the ratio has improved over the last few years.
- SanchoPanda 7y agoThis is a risk report, and such statements represent a dire case outcome. It is the goal of everyone involved to make sure this doesn't happen, though its there because it could.
- perspective1 7y ago"Why go public if you literally say you won't make money?" Because you can get rewarded heavily for it. They have $88 million in working capital as of June 30, 2019 and are on track to lose another $40 million before the end of the year, so they need more capital. With $330 million carrying value of preferred stock, I think it's go public, somehow issue 100s of millions of dollars in debt or die.