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Revolve IPO: Important Points To Consider

Jon Phillip



Another e-commerce retailer’s shares are now up for grab with Revolve going public. Revolve Group Inc. is gearing up for its plan to get listed in the NYSE by the ticker symbol ‘RVLV’. The California based company plans on raising $211.7 million USD by offering 11.8 million shares at the price range of $16 – $18 per share.

The lead bookrunning managers include Morgan Stanley, Credit Suisse BofA Merrill lynch while Barclays Capital Inc., Jefferies LLC along with 4 other banks will act as co-managers for the offering.

Michael Mente and Mike Karanikolas, the two co-chief executives came together and established in 2003 this digital retailer, which now sells 500+ brands. It is a spot for all technology savvy population irrespective of gender, with several private label brands which accounted for 83% of the total sales in the previous year. The remaining 17% sales were accounted by the luxury-focused, Forward. As per its filing with the Securities and Exchange Commission, there has been an increase in sale by $87.5 million from 2016 sales of $312.1 million while the net income totaled to $5 million in 2017.

No Dividends

Out of the 11.8 million shared that will be offered to the public, 2.9 million comprises of Class A common stock, while the selling shareholders offer 8.2 million. A point to be made is that the company is not offering to pay any cash dividends on these shares. As per the prospectus issued, the no-dividend policy will mean increased retained earnings and better scope of expansion. The company’s decision to offer Class A and Class B shares would help the voting rights and decision making power to not get much diluted and remain in the hands of executive officers and directors.

Inventory Management Method

One strong forte of the company is its inventory management method.  A major drawback for a retailer is to keep up with the on-trend merchandise and if not managed efficiently these stocks could result in heavy losses. With an automated inventory management customized technology, Revolve seems to have been smoothly handling the hurdle. However, the reporting system might not be as strong. The firm confessed of its material weakness and assured that remedial solutions are already in motion.

Marketing Mix

With the influencer-driven strategy as a major component of the company’s marketing mix, it reaches out into the market more effectively. Social media and hashtags like #RevolveFestival etc have helped develop and expand the customer base vastly. However, this also means chances of poor relations with its network, which could pose a great degree of risk for the company.

The China-US trade relations might prove unfavorable for the IPO with Revolve having its operation set in the former country as well. With the tariff threat looming overhead and the sour experiences of the big retailers – Walmart Inc. and Target Corp. The company fears of the business taking a serious hit. To be able to obtain and retain a legal permit in China would be another challenge for Revolve.

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ROKU Stock On A Surge After Its Head-Turning Q2 Results

Jon Phillip



tech stock

Roku Inc (NASDAQ:ROKU) stock, the video-streaming pioneer is performing quite well in the Wall Street. The company is expected to go even as high as $150 as projected by analyst Laura Martin. More and more advertisers are using the platform instead of the traditional television for advertising their products and services.

An increased number of people are skipping video ads on television. Martin continues to keep ROKU stock as one of the top picks for mid-cap companies this year seeing the potential of a further stock price increase.

Blockbuster Earnings

The platform’s popularity which is measured by variables like audience count, usage and average revenue per user increased greatly resulting in a humungous growth. Last week, the stocks of the company rose by 25% post the impressive performance in yet another quarter.

The revenue reported a rise by 59% in Q2, 86% of which was due to a surge in the revenue generated through the platform. While a few years earlier, the revenue was dominated by the sales of the low-margin device, now over two-thirds of the total revenue is contributed by the Roku platform which is a high-margin business.

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Currently, the count of active accounts on the Roku platform stands at 30.5 million users, while the content streamed is for a total of 9.4 billion hours. Considering these figures and the number of days in the quarter, i.e. 91 days, the average consumption can be totaled to 3.4 hours per day per account. The consumers are not only using low-cost devices but are also buying the now available smart TV with the factory-installed operating system of Roku.

While, Needham analyst, Laura Martin had been a keen supporter or Roku’s stock even before its bullish phase, even the cautious ones are now of the buying opinion – take for example Stephens’ and Rosenblatt’s analysts have changed the stock from neutral to buy last week.

To make matters even better, the media giants are also amidst the process of launching new streaming services. This, coupled with the rapid growth of Roku is what made the $150 stock price appear realistic when the stock had started the year at just $30. The future of the company definitely appears brighter than ever.

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Stock Price Friday Morning Update – August 16, 2019

Joe Samuel



stock price newsletter

The Future Of Drug Delivery Has Biotech Investors Focusing On One Small Company

With a wave of groundbreaking products in the pipeline, biotechnology could be poised to keep churning higher for the foreseeable future. But how can you get in on the ground floor of the next big wave in biotech?

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Will This New Trend In Tech Bolster Big Opportunities For Investors?

It is undeniable how on-demand is changing the world around us as we know it. No matter which business segment you belong to, chances are that someone in your industry will be thinking about investing in the on-demand market. So how can people capitalize on this new trend?

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What’s Lying Ahead for (SOHU) After The Recent Developments

Sohu . com (SOHU) investors face a gloomy future after the stock of the Chinese company dropped to a new low in 16 years after it reported disappointing financial results last week. This is the first time since the spring of 2003 that the stock has sunk that low to trade in single digits.

What’s Next For The Chinese Tech Stock?

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What’s Lying Ahead for (SOHU) After The Recent Developments

A. Lawrence



SOHU stock price (SOHU Stock Chart) investors face a gloomy future after the stock of the Chinese company dropped to a new low in 16 years after it reported disappointing financial results last week. This is the first time since the spring of 2003 that the stock has sunk that low to trade in single digits.

Sohu reports $474.8 million in revenue in Q2

In the just-announced Q2 2019 financial results the company reported revenue of around $474.8 million in the quarter which is a 2% decline from what was reported a year ago but it is a 10% sequential improvement. This is the fourth consecutive quarter that Sohu has posted a decline in year-over-year top-line although the pace has moderated with each passing quarter.

Things were not good equally for the subsidiaries that it spun sometimes as they also experienced a drop in their stock. (CYOU Stock Chart) and Sogou (SOGO Stock Chart) which represent Sohu’s gaming and search operations respectively equally tumbled last week hitting new lows despite the segments reporting an increase in revenue.

Q2 revenue within company projections

The company’s quarter did not appear to be disappointing since the reported revenue of $474.8 million was within the company’s projection of revenue between $469 and $494 despite falling short of Wall Street estimates. The adjusted net loss of $50 million reported was better than the projections of a loss of between $60 million and $70 million in the quarter.

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The future for Sohu seems to be uncertain as it continues to perform unsatisfactorily. For instance, in the past year, the company saw its leading advertising revenue dip by 29% despite its Changyou-driven online gaming and Sogou-led search revenue increasing by 3% and 2% respectively.

For the third quarter, the company has estimated its revenue to be between $445 million and $470 million which is a sequential drop. The company has forecast a 10% to 14% jump in top-line which will help in offsetting the 12% to 21% drop in advertising revenue and 6% to 17% dip in online gaming revenue.

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