How Ari Emanuel’s (AriEmanuel) outsized IPO dreams were dashed
Faced with the potential for its stock to fall below $20 on the first day — stripping hundreds of millions from its valuation — top execs pulled the plug as its headstrong CEO declares,"We’re not willing to undervalue our company."
But as awful as those consequences were, the principals felt pulling the plug was far less sickening than watching Endeavor’s stock open low and then potentially fall by double digits, stripping hundreds of millions from the company’s valuation. Emanuel had hoped to raise as much as $600 million from the IPO, which would have valued the company at as much as $8 billion, but those numbers shrank as the offering neared.
But that wasn’t the main sticking point, according to an insider who says the biggest obstacle for prospective investors was the need to accept that Endeavor couldn’t be expected to generate profits as predictably as a company in a less volatile business might. Then Peloton launched, and instead of starting at the projected $29 a share, it traded at $27. Instead of shooting up to maybe $35, by the end of the trading session its share price had fallen more than 10 percent in the third-worst public debut of the past 10 years. The Goldman advisers said, in essence: “The market’s gone crazy. What about going out at $26, $25?” It was doable, but a quick canvass revealed that Endeavor would not attract the right quality of investor.
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