Compass Makes Last Minute S-1 Amendment a Day Before Expected IPO

March 31, 2021
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Compass has made a last-minute S-1 with the U.S. Securities and Exchange Commission (SEC), slashing the number of shares it expects to sell from 36 million to 25 million, and dropping the price per share from $23-$26 to $18-$19 per share. 

Compass now expects to raise between $450 million and $475 million on the day of its IPO. When it originally filed its initial S-1, the goal was $828 million to $936 million. Now, the company is valuated at slightly over $7 billion, another drop for the company as its original stock valuation was expected to be around $10 billion. The move shows distinct insecurity with jumping into public status. 

Compass’ successful IPO depends heavily on whether investors see the company as a proptech platform or a traditional brokerage along the lines of Realogy or RE/MAX

Paul Levine, Partner at Sapphire Ventures and Board Member of Side Real Estate, tweeted optimistically earlier this month:

“If Compass is valued at the same multiple as EXPI, this implies a $13B market cap for Compass. At Redfin’s higher multiple, this implies a $28.7B market cap. I believe $15-20B is the likely range.”

The conclusion, thus far at least, is that investors haven’t bought into the story enough for the company to determine the final price per share. 

March 31, 2021
Victoria has been writing about property portals and marketplace sites for Online Marketplaces for over 3 years. She is also our resident artist and is responsible for all of the infographic content on the site.

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