https://www.bloomberg.com/view/articles/2018-02-21/your-ipo-...
Also, I would be hard pressed to imagine that they would not nominate a stabilization agent to help deal with the issues that you noted so that they manage price volatility in initial trading.
> As this listing is taking place via a novel process that is not an underwritten initial public offering, there will be no book building process and no price at which underwriters initially sold shares to the public to help inform efficient price discovery with respect to the opening trades on the NYSE. Pursuant to NYSE Rules, we have engaged Morgan Stanley & Co. LLC (“Morgan Stanley”) as a financial advisor to be available to consult with the designated market maker (the “DMM”) in setting the opening public price of our ordinary shares on the NYSE.
Morgan Stanley will be involved to help set the price with the market maker (sounds normal), but:
> However, because Morgan Stanley will not have engaged in a book building process, they will not be able to provide input to the DMM that is based on or informed by that process. Moreover, prior to the opening trade, there will not be a price at which underwriters initially sold ordinary shares to the public as there would be in an underwritten initial public offering.
So they didn't get hired to do a road show and won't have interest from institutional investors. As for having a stabilization agent? It sure doesn't sound like it:
> This lack of an initial public offering price could impact the range of buy and sell orders collected by the NYSE from various broker-dealers. Consequently, the public price of our ordinary shares may be more volatile than in an underwritten initial public offering and could, upon listing on the NYSE, decline significantly and rapidly.
$SNAP is probably as nearest neighbor as any for price-action historical context.
Market timing (H1 2019) may also be ill-favored generally for anything tech related if we see significant correction.
But I certainly hope I'm wrong. And will be looking to add positions in Spotify, Dropbox, Uber, Lyft, Docker, Snowflake, AirBnB, SpaceX, WeWork, Stripe etc if and when they become available ;)
If you're not working for a huge bank, stay away from this until it stabilizes.
Spotify isn't pricing it, they aren't even selling shares. The initial pricing will come directly out of the order book whenever it lists. It's really unusual. Read the plan of distribution section:
https://www.sec.gov/Archives/edgar/data/1639920/000119312518...
> because Morgan Stanley is not acting as an underwriter, it will not have engaged in a book building process, and as a result, it will not be able to provide input to the DMM that is based on or informed by that process
> The Registered Shareholders may sell their ordinary shares covered hereby pursuant to brokerage transactions on the NYSE at prevailing market prices at any time after the ordinary shares are listed for trading thereon.
Plus:
> prior to the opening trade, there will not be a price at which underwriters initially sold ordinary shares to the public as there would be in an underwritten initial public offering
As I said, this should be fun to watch!
"We'll give you a share for $20"
"I'll take it!"
"No, we're not selling"
> Unlike an initial public offering, the resale by the Registered Shareholders is not being underwritten by any investment bank. The Registered Shareholders may, or may not, elect to sell their ordinary shares covered by this prospectus, as and to the extent they may determine. Such sales, if any, will be made through brokerage transactions on the New York Stock Exchange (the “NYSE”) at prevailing market prices.
So essentially early investors will be the ones [potentially] selling. The pricing should be highly volatile.
Let say it is valued at $20B with shares at $20. What is stopping an early investors selling 1 shares at $1000, market valued at 1 Trillion, and get someone to buy that 1 shares?
My point is since there is no new shares, unless the early investor are really rushing to offload. Selling would be limited.
Update: This nugget from the F-1 [1] alludes to the interesting to watch pricing
> Moreover, prior to the opening trade, there will not be a price at which underwriters initially sold ordinary shares to the public as there would be in an underwritten initial public offering. This lack of an initial public offering price could impact the range of buy and sell orders collected by the NYSE from various broker-dealers. Consequently, the public price of our ordinary shares may be more volatile than in an underwritten initial public offering and could, upon listing on the NYSE, decline significantly and rapidly.
[1] https://www.sec.gov/Archives/edgar/data/1639920/000119312518...