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Eventbrite goes public, stock soars on listing day

The online ticketing solutions provider Eventbrite (NYSE: EB) had an excellent debut day, rising 58.70% from its IPO price of $23 per share. Eventbrite, which raised $230 million by selling 10 million Class A shares, skyrocketed to $39.30 at midday and closed the day at $36.50.

On August 23, Eventbrite filed about its IPO plans with the SEC without mentioning the offering price and the number of shares it planned to sell. Later, the ticketing company fixed the IPO price range as $19 to $21 per share and Thursday the company hiked its public offering price to $21 to $23 per share range.

Eventbrite IPO

The San Francisco-based entertainment platform, which launched its operations as part of Mollyguard Corporation in 2006, changed its name to Eventbrite in 2009. The company’s net revenue surged 51% to $201.6 million and registered a net loss of $38.5 million in 2017. For the quarter ended June 30, 2018, net revenue stood at $67.5 million and net loss was $24.6 million. In the past eight quarters, Eventbrite reported profit only in the first quarter ended March 31, 2018.

Eventbrite generates revenue by charging event creators on a per-ticket basis when a person buys a ticket for an event. In 2017, the company got its 54% of net revenue from these creators.  In 2018, the platform is expected to address a current market opportunity in its top 12 markets generating $3.2 billion in gross ticket fees with an estimated 1.1 billion paid tickets. Also, the company believes to expand across new categories and augment its presence in various geographies.

However, the company’s failure to report a profit in the recent quarters, threats it faces from the competitors like Live Nation Entertainment (LYV) subsidiaries Front Gate Tickets, TicketWeb, and Universe, and the low-paid or free tickets remain a concern for the investors.

The company said in the filing that large e-commerce companies such as Amazon (AMZN) and eBay EBAY) have in the past, or currently, operate within the ticketing space. Eventbrite also cautioned that Facebook (FB), Google and Twitter (TWTR) have large user-bases and they might add a product in the event-related activity space.

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The private company, which was co-founded by the current CEO Julia Hertz, her husband Kevin Hartz (the chairman of the board), and CTO Renaud visage, had raised a total of $332 million in funding from nine rounds from 2006. Tiger Global owns 21.4%, while Sequoia Capital owns 20.5% of the company’s Class B shares.

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United Natural Foods stock drops on weak Q4 results

United Natural Foods Inc. (UNFI) reported a 15.6% dip in earnings for the fourth quarter due to a shift in customer mix and an increase in inbound freight costs. The top and bottom line missed analysts’ expectations. Following this, the stock plunged about 10% in the after-hours session.

Earnings for the quarter dropped $15.6% to $32.8 million or $0.64 per share. The results were impacted by higher costs and expenses as well as an increase in restructuring and asset impairment expenses. Adjusted earnings increased 5.6% to $0.76 per share.

Net sales grew 10.7% to $2.6 billion. Sales from Supernatural customer channel jumped 27.5% year-over-year and that from Independents increased 5.7%. Supermarkets sales rose by 1.1%, while Other customer channel declined 1.5% due to the divestiture of Earth Origins Market business.

Looking ahead into the fiscal year 2019, the company expects EPS in the range of $3.35 to $3.45, adjusted EPS in the range of $3.48 to $3.58 and net sales of $11.1 billion to $11.3 billion. Free cash flow is predicted to be in the range of $40 million to $70 million.

On July 25, United Natural Foods agreed to buy Supervalu (SVU) for $32.50 per share in cash or about $2.9 billion, including the assumption of outstanding debt and liabilities. The transaction is expected to achieve run-rate cost synergies, net of reverse synergies, of more than $175 million in the third year and more than $185 million in the fourth year.

This deal is expected to close in the fourth quarter of calendar 2018. One-time costs including deal and integration costs for the first year are expected to be about $95 million. Total one-time costs for the second year and beyond are expected to be $110 million with the majority expected to be incurred in the second year.

Shares of United Natural Foods ended Thursday’s regular session up 1.65% at $33.85. The stock had fallen over 31% so far this year and more than 19% in the past year.

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