Sonos Enters the Market With a Bang in IPO

By Chris Lange Updated Jan 11, 7:58PM EST · Published Aug 2, 1:20PM EDT

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Sonos Enters the Market With a Bang in IPO — © designer491 / iStock

Sonos Inc. (NASDAQ: SONO) entered the markets quietly on Thursday, but shares have quickly climbed since the open in one of the most anticipated initial public offerings of 2018. The company priced its shares at $15, below the expected pricing range of $17 to $19 per share. However, the stock has since risen handily as the day has gone on.

Under the terms of the offering, Sonos is selling 5.56 million shares, and the selling stockholders are selling 8.33 million shares, for a combined 13.89 million shares. At the $15 price, the entire offering was valued up to $208.3 million.

The underwriters for the offering are Morgan Stanley, Goldman Sachs, Allen, RBC Capital Markets, Jefferies, KKR, Raymond James and Stifel.

This company sits at the intersection of emerging trends driving the future of home entertainment. The proliferation of streaming services and the rapid adoption of voice assistants are significantly changing audio consumption habits and how consumers interact with the internet. As one of the leading home sound systems, content partners and developers, Sonos is poised to capitalize on the large market opportunity created by these dynamics.

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Sonos debuted the world’s first wireless multi-room home sound system in 2005, and it has since been a leading innovator in wireless home audio. Its products include wireless speakers, home theater speakers and components to address consumers’ evolving home audio needs. The firm launched its first voice-enabled wireless speaker, Sonos One, in October 2017, and its first voice-enabled home theater speaker, Sonos Beam, in July 2018.

In the filing, the company described its finances as follows:

We generated revenue of $655.7 million in the six months ended March 31, 2018, an 18% increase from $555.4 million in the six months ended April 1, 2017. For the six months ended March 31, 2018, our net income was $13.1 million and our adjusted EBITDA was $50.5 million. We generated revenue of $992.5 million in fiscal 2017, a 10% increase from $901.3 million in fiscal 2016. In fiscal 2017, our net loss was $14.2 million and our adjusted EBITDA was $56.0 million.

The company intends to use the net proceeds from this offering for working capital and other general corporate purposes, which may include sales and marketing activities, research, product development, general and administrative matters and capital expenditures.

Shares of Sonos were last seen up over 25% at $18.78, with a range of 15.51 to $18.95 on the day thus far. About 15 million shares had moved as of 1:15 p.m. Eastern.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.