Ovialand [OLI pre-SEC] [link] released a statement with its sole underwriter, SB Capital, to say that OLI will defer its IPO to “wait for better market conditions”. OLI said that its business is “on track for another period of significant growth in 2023”, and SB Capital said that it will “continue to work and support Ovialand so that all options are available to maximize their long-term growth potential”, but noted that “as of the moment, a public listing is not the best option.”
MB BOTTOM-LINE
Take away all of the marketing and messaging, and an IPO is really a very simple stock sale transaction.
Sure, there are a ton of regulatory hoops to jump through, and the complicated process of price discovery that needs to be done to competently make an offer to the investing public at a price that will attract buying interest while still accomplishing the seller’s goals, but it’s really not more than just a stock sale.
And sometimes, like now, the market just sucks. It’s like if you had a used car that you were trying to sell back in February of 2020.
The market for used cars was decent back then. Not great, but transactions were happening at prices that were attractive enough to both buyers and sellers to make deals happen.
One month later and the entire country is locked down for COVID and we’re all faced with the prospect of eating rationed food through our LGUs, and that market for used cars was suddenly completely dead.
You still have that car, and you still want to sell it, but it’s not like you’re forced to sell it at any price, so instead of just accepting a comically low offer in a terrible market, you just sit on the car and wait for better times.
I don’t think the IPO market is “used cars during COVID lockdown” bad, but it’s really not doing that great, and I wouldn’t blame any owners for re-evaluating their money-raising plans in light of the weak market.
Maybe the delay will allow OLI to get credit for some of that 2023 growth and give its owners a more persuasive valuation.
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