YOGAWORKS PULLS OFF DISCOUNTED IPO
YogaWorks (YOGA) finally made its public debut, pricing 7.3 million shares at $5.50/per, while raising $40.2 million in the process. The company had previously tried and failed to sell 5 million shares at $12-14/per, citing “market conditions” while postponing its July 20th scheduled debut. While those bullish on YOGA cite a subscriber base that is 40% millennials and has 60% earning $75,000 or more, the nationwide yoga chain has posted net losses two years in a row. In the filing, the company which currently owns 50 studios, announced it is in deep negotiations on 14 more at a cost of $5-6 million.
Howie Long Short: “Market conditions” is code for lack of interest. In this case, the shares were simply overpriced.
Fan Marino: The company cited 30 million visits last year. If Millennials are making 12 million of those trips (40%), perhaps it isn’t avocado toast killing their chance of home ownership… Doesn’t anyone work anymore?!?