The popular home speaker company Sonos has decided to take a dive into the public investment realm, most likely after hearing about the success of most tech stocks in quarter 2. On Thursday, their IPO (initial public offering) in stocks opened to $16 dollars per share, which was lower than the initial $17-19 target. Still, stocks for the company saw rises all throughout today, meaning this risky endeavor might pay off.
When Sonos hit the NASDAQ, they had just recently cut their IPO price, giving them a total estimated value of $1.5 billion. And because a profit has not been posted for a full years sales since 2014, investors remain skeptical for Sonos to keep up against some of its tech competitors, such as Google, Amazon, Samsung, and of course, Apple.
Early investors, including KKR, took immediate action on the shares, however the company’s itch to break into streaming services in rivaled by Spotify and Pandora. In order to market against these companies, advertising prices have skyrocketed for Sonos. Additionally, they will always be going head-to-head with Bose, the other name brand speaker maker on the market today.
Why would Sonos choose now of all times to go public? It’s a risky move with so much competition, but if all things go well, it could turn profits higher than ever.
