Chewy, Fiverr and CrowdStrike IPOs Recall Dot-Com Bubble

Uber (ticker: UBER) went public to a less than expected $ 45 per share and remains slightly below that level; Lifting (LYFT) started at $ 72 per share and is now trading in the low $ 60s. Instead of pushing open the IPO window, they barely squeezed.

But it was before the arrival of Mr. Chewy and the dogs on the floor of the New York Stock Exchange.

Over The past few days, there has been a rebuild outside the market research market. Three very different types of technology companies came public this week, and the market went gaga for all three. It felt giddy, like a 1999 flashback.

We come to beginners in an instant, but I suspect that what we saw reflects overlapping trends far from the value of these particular names. It starts with mega cap fatigue.
Facebook

(FB),
Alphabet

(Google),
Amazon.com

(AMZN), and
apple

(AAPL) is under intense government control. Even worse, while consumers are loyal to all four, companies are increasingly seen as morally questionable leviates. Perhaps worse still, all their businesses are slowing down.

In her latest Internet Trends report, Mary Meeker describes the last week of maturing the internet. During a presentation at the Code Conference in Scottsdale, Ariz., She noted that more than 50% of people are already online. Sure enough, global growth in internet users was up only 6% last year, down from 7% growth in 2017. Smartphones suddenly feel passé broadcasts fell 4% last year. And the advertising revenue on the large platforms increased by 20% in 2018, down from 29%.

In May, Barclays analyst Ross Sandler wrote a report called, "It's officially-the Internet is slowly big time. Now what should I do?"

The immediate answer seems to be buying IPOs. While Uber and Lyft have stopped, a number of corporate technology companies have had spectacular debuts, including Zoom Video Communications (ZM) and
PagerDuty

(PD). These business-focused brands are less likely to be the subject of moral rebellion and congressional hearings than, for example, Facebook or Google.

This week's IPO festivities kicked off with
CrowdStrike Holdings

(CRWD), a cloud-based security company. At the end of May, CrowdStrike set an expected price range for its IPO of $ 19 to $ 23 per share; A week later, the company bumped into the range, to $ 28 to $ 30. The IPO prize was priced at $ 34, and by the end of Thursday, the stock had reached $ 68, doubling its IPO price and about three times its original price range. While the stock retreated slightly on Friday, the strong debate CrowdStrike gives a market value of $ 13 billion, about 50 times the income tax 2019, making it one of the valuable security software in the world. It's already ahead
Symantec

(SYMC), which has 18 times the revenue.

That's it
Fiverr International

(FVRR), a small Israeli company that operates digital services marketplace. Basically, there was a place where people would offer to complete tasks for – you guessed it – $ 5. In 2012, Business Insider highlighted this example: For $ 5, "I'll juggle fire flashlights while you say something you want (under 25 words , please) and send the video in HD. " Hard to match.

Fiverr dropped $ 5 a few years ago and now shows serious workers who want to do serious things, like writing speeches or designing logos. But the stupid things remain.

Here is one I found: "In exchange for five dollars, I write you five dirty limericks with the name of your choice." (What rhymes with Zuckerberg?) And then it is Colin, who offers to be your best variable pricing friend based on service level basics, standard and premium. We're talking your best friend here – pay for premium, right?

Fiverr is first expected to cost $ 18 to $ 20 per share; The share price was $ 21 and closed the first trading day at $ 39.90, a gain of 90%. Not exactly theGlobe.com, a dot bomb that had a 600% premium first day pop in 1998, but astonishing anyway. Before a slight withdrawal on Friday, Fiverr's market capitalization reached $ 1.2 billion.

chewy

(CHWY), an online pet food retailer, capped by the big week. Its share price priced at $ 22 on Thursday night, up from an original $ 17 to $ 19 selection. Even after IPO, the digital firm is the majority of the brick-and-mortar giant PetSmart.

Chewy and the cartoon mascot Mr. Chewy are more than a little reminiscent of another bubble-era debacle-Pets.com and the legendary sock.

Like Pets.com, Chewy takes up some impressive losses. The company had 2018 revenues of $ 3.5 billion, up 68% from 2017, while losing $ 267.9 million. The big winners here are PetSmart, who bought the company from the founder in 2017 for $ 3.35 billion, and PetSmart's private equity owner, BC Partners. At $ 22, Chewy was already valued at $ 8.7 billion, instantly the largest publicly held pet company. And then the first trade came to $ 36 and increased the market value to over $ 14 billion. By the way, if you go to pets.com today, it routes you to PetSmart, which has an online store separated from Chewy. There are no socks anywhere in sight.

The real question is whether any of these robust launches have electricity – and whether they can offer for the many unicorns still on the sidelines, including Airbnb, WeWork, SpaceX, Palantir, and SoFi. This week's Slack Direct Listing will be another test for the listing market, which we post on page 13, but there are bigger names coming.

You may want to save some of these lashes.

Write to Eric J. Savitz at eric.savitz@barrons.com