NEW YORK – Pinterest Inc. has confidentially filed paperwork with the Securities and Exchange Commission for an initial public offering that is expected to value the company, which operates a platform for online-image searches, at $12 billion or more as it joins a parade of hot tech startups planning share debuts in 2019.
The filing is the latest example of a rush to the public markets by highly valued technology companies including ride-hailing service providers Lyft Inc. and Uber Technologies Inc., which have both also filed confidentially for listings. Such companies had for years shied away from public markets – a luxury afforded them by a surfeit of private capital –, but in recent months the tide has turned.
The shift appears to derive from the outsize gains new tech stocks have enjoyed of late. As of this week, shares of US-listed technology and internet companies that went public in 2018 are up about 33% on average, according to Dealogic. That is far ahead of the major indexes and the performance of all 2018 US IPOs, which are up 11%.
Bankers and others predict that 2019 could be the busiest year ever for IPOs by the amount of money raised. The current high-water mark is 1999, near the height of the dot-com bubble, when companies raised $107.9 billion going public in the US, according to Dealogic. Last year’s total was barely half that, at $60.8 billion, up from $49.4 billion in 2017.
As a result of the partial government shutdown, which hampered the SEC’s ability to sign off on listing plans, there haven’t been any tech IPOs in the US so far this year. However, with the shutdown drama over and markets recovering after a bout of volatility late last year, the floodgates are poised to open for new issues.
Lyft, which filed confidentially for its IPO late last year, may make the submission public next week and begin trading on Nasdaq by the end of March, The Wall Street Journal reported on Wednesday. Uber filed confidentially at the same time late last year, while workplace-messaging provider Slack Technologies Inc. has since submitted paperwork for a so-called direct listing.
Many of the largest companies are wedded to going public in 2019, regardless of market conditions. In some cases, like with Uber, they have told investors they wouldn’t raise any additional private capital.
It is a big turnabout from last fall, when many companies that were expected to debut in 2018 delayed their plans as markets swooned amid fears of slowing economic growth in the US and other concerns. While some big-name companies still successfully launched, they had a more difficult time pricing their offerings. Two of the biggest fall IPOs were those of biotech Moderna Inc. and music-streaming company Tencent Music Entertainment Corp.
Shares of Tencent Music, which fetched a valuation of more than $20 billion at pricing, have risen by about 30% since then. Moderna, which had been one of the most highly valued health-care startups, hasn’t fared as well. The biotechnology company raised more than $600 million, pricing its shares at $23 apiece in early December. It suffered one of the worst opening days for a company going public last year. Since then, the stock has recovered somewhat but still trades below the offering price, closing on Thursday at $19.34.
Pinterest and its underwriters, led by Goldman Sachs Group Inc. and JPMorgan Chase & Co., are eyeing a late-June listing, according to people close to the deal. They warned that, as always with IPOs and unpredictable markets, the timing or valuation could shift. Pinterest most recently raised funding privately at a valuation of $12 billion.
The social-media company’s chief executive, Ben Silbermann, has said the company would look to debut in 2019 and The Wall Street Journal reported in December that it was preparing for an IPO that could take place as soon as April.
In September, Pinterest, which launched in 2010, surpassed 250 million monthly active users who visit the site to browse through and share billions of images on topics ranging from living-room furniture to dinner recipes and tattoos.
The company generates revenue from ads scattered across its site and notched more than $700 million in 2018, up 50% from the prior year, according to a person familiar with the matter.
The company was in the news earlier this week, when the Journal reported that Pinterest has stopped returning results for searches related to vaccinations in a move aimed at curbing the spread of misinformation.