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MarketScreener Homepage  >  Equities  >  Nyse  >  The Goldman Sachs Group, Inc.    GS

THE GOLDMAN SACHS GROUP, INC.

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Warner, ZoomInfo Enliven IPO Scene -- WSJ

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06/03/2020 | 02:48am EDT

By Corrie Driebusch

Two big IPOs are set to reinvigorate the market for new issues this week, as the rebound in stocks encourages companies forced to the sidelines by the coronavirus pandemic to revive listing plans.

Warner Music Group Corp. and ZoomInfo Technologies Inc. plan to list their shares Wednesday and Thursday, respectively, potentially raising more than $2.5 billion combined. Together with three other companies expecting to make their debuts, the listings would make the week the year's biggest for U.S. initial public offerings, according to Dealogic.

The burst of activity comes after months of relative quiet, with potential issuers scared away by the pandemic and the ensuing economic damage and financial turmoil. With shutdowns beginning to lift, and the benchmark S&P 500 index now down less than 5% on the year, issuers are starting to return. Should this week's crop of IPOs fare well, a host of companies are likely to follow in the coming months, according to bankers.

Grocery giant Albertsons Cos., for example, plans to launch a roadshow to market its shares as early as this month, while online used-car seller Vroom Inc. did so this week.

Some debuts that were to take place in 2020 will likely remain on ice. The pandemic and the dramatic blow it has delivered to the travel and hospitality industry will likely delay Airbnb Inc.'s highly anticipated IPO until at least 2021, according to people familiar with the matter.

And even with the pickup, the IPO market is unlikely to return any time soon to the robust health it enjoyed early last year before stumbling, as investors punished companies with big losses. By the end of December, shares of companies that went public in the U.S. in 2019 were on average up less than the S&P 500, according to Dealogic -- an inversion of what's typical.

Warner Music is targeting a range of $23 to $26 for its shares, which would value the record company at $11.7 billion to $13.3 billion and make it the biggest IPO of the year. The company expects to price the stock in the upper half of that range, according to people familiar with the matter. Warner Music delayed its meeting to set an IPO price to Wednesday morning from Tuesday evening in deference to a move by record labels to suspend work Tuesday in support of the protests over the death of George Floyd, one of the people said.

ZoomInfo, a marketing-data company, plans to sell 44.5 million shares at between $19 and $20 each, a range it boosted Tuesday morning amid strong demand. At the midpoint, the company would raise more than $850 million, making it the biggest technology IPO of 2020.

The other IPOs on deck this week are those of biopharmaceutical companies Applied Molecular Transport Inc. and Pliant Therapeutics Inc. and payment processor Shift4 Payments LLC.

The success of Warner Music and ZoomInfo, measured by how much demand there is for the shares both before and after they start trading, could hinge on steps taken in the months leading up to their official launches.

Executives at both companies were able to speak with potential investors in so-called testing-the-waters meetings before travel came to a near halt. That gave the investors more comfort to put in orders for shares, some of them said, even though they were deprived of the in-person roadshow meetings that precede new listings in normal times. Instead, Warner Music and ZoomInfo executives conducted virtual roadshows, trying through video chats to persuade investors to buy their stock.

Also key for drumming up demand: Both companies worked to secure a significant chunk of their IPO proceeds ahead of time. Warner Music has discussed investments totaling more than $1 billion of its fundraising goal with institutions as well as with the Chinese internet company Tencent Holdings Ltd., The Wall Street Journal reported last week. BlackRock Inc., Dragoneer Investment Group and Fidelity are named as so-called anchor investors planning to buy up to $100 million of shares each in ZoomInfo's IPO, according to a regulatory filing.

Both Warner Music and ZoomInfo appear to be weathering the pandemic relatively well.

ZoomInfo said in the regulatory filing that it expects to experience "slowed growth or decline in new customer demand for our platform" as well as lower demand from existing customers because of the pandemic. Yet the company added that its annualized value of contracts with new customers rose 87% in April from a year earlier.

Warner Music, meanwhile, in April enjoyed a 12% jump in streaming revenue, the largest contributor to its top line. While that was more than offset by decreases related to the coronavirus in segments including ad-supported digital and physical revenue, those areas are expected to recover.

Morgan Stanley, Credit Suisse Group AG and Goldman Sachs Group Inc. are among the banks leading the Warner Music offering. JPMorgan Chase & Co. and Morgan Stanley are leading the ZoomInfo sale.

--Anne Steele contributed to this article.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
AT HOME GROUP INC. 3.91% 6.64 Delayed Quote.20.73%
BLACKROCK, INC. 1.37% 551.77 Delayed Quote.9.76%
CREDIT SUISSE GROUP AG -0.44% 9.852 Delayed Quote.-24.82%
DJ INDUSTRIAL 0.36% 25827.36 Delayed Quote.-9.50%
JPMORGAN CHASE & CO. -0.64% 92.66 Delayed Quote.-33.53%
JUST GROUP PLC -4.49% 48.9 Delayed Quote.-38.10%
LETS HOLDINGS GROUP CO., LTD. -1.84% 11.22 End-of-day quote.85.76%
LINE CORPORATION 1.83% 5570 End-of-day quote.4.11%
LOOK HOLDINGS INCORPORATED -3.53% 684 End-of-day quote.-45.37%
MORGAN STANLEY 0.38% 47.79 Delayed Quote.-6.51%
NASDAQ 100 0.61% 10341.891881 Delayed Quote.18.42%
NASDAQ COMP. 0.52% 10207.628547 Delayed Quote.13.76%
PLIANT THERAPEUTICS, INC. 0.79% 29.53 Delayed Quote.0.00%
S&P 500 0.45% 3130.01 Delayed Quote.-3.12%
TENCENT HOLDINGS LIMITED 1.16% 524.5 End-of-day quote.39.64%
THE GOLDMAN SACHS GROUP, INC. -0.09% 197.4 Delayed Quote.-14.15%
THE NEW HOME COMPANY INC. 0.63% 3.2 Delayed Quote.-31.33%
WILL GROUP, INC. 0.32% 636 End-of-day quote.-49.20%
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Financials (USD)
Sales 2020 34 218 M - -
Net income 2020 5 146 M - -
Net Debt 2020 274 B - -
P/E ratio 2020 13,8x
Yield 2020 2,55%
Capitalization 70 785 M 70 785 M -
EV / Sales 2019
EV / Sales 2020 10,1x
Nbr of Employees 38 500
Free-Float 37,9%
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Technical analysis trends THE GOLDMAN SACHS GROUP, I
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TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 226,84 $
Last Close Price 197,40 $
Spread / Highest target 69,7%
Spread / Average Target 14,9%
Spread / Lowest Target -18,9%
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Managers
NameTitle
David Michael Solomon Chairman & Chief Executive Officer
John E. Waldron President & Chief Operating Officer
Stephen M. Scherr Chief Financial Officer & Executive Vice President
Marco Argenti Co-Chief Information Officer
Atte Lahtiranta Chief Technology Officer
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