- Brazilian-based customer-communications platform Zenvia (NASDAQ:ZENV) sank more than 25% intraday in its first session Thursday following an IPO that priced at the bottom of its expected range despite backing from Twilio (NYSE:TWLO).
- Zenvia fell to as low as $9.49, down 27% from the $13 per Class A share that its initial public offering priced at. Shares later partly recovered, but still closed at $10.20, down 21.5% for the session.
- ZENV sold some 11.5M Class A shares through the IPO, which priced at the bottom of its forecast $13-$15/share range. The company also granted underwriters the option to buy as many as about 1.7M Class A shares for overallotments, as per the company’s F-1 filing with U.S. Securities and Exchange Commission.
- Each Class A share carries one vote, while Class B shares owned by CEO Cassio Bobsin and funds managed by Brazilian financial firm Oria Gestao de Recursos have 10 votes apiece. Class B investors will have 93.3% of the company’s voting power.
- ZENV grossed $150M from the IPO. That will rise to $172.5M if underwriters exercise all overallotment options.
- The company plans to use some $59M to pay for the previously announced purchase of a firm called Direct One. ZENV intends to expend the rest on such things as product development, international expansion and possible future acquisitions.
- Zenvia expected to have about 23.7M Class A and B shares following the IPO, as per the company's F-1. Assuming both stock classes carry the same price, that valued the company at $308.2M on a non-diluted basis before Thursday’s selloff.
- Zenvia helps companies across Latin America handle customer communications and marketing via Facebook, Webchat, Instagram and other channels.
- Clients include large multinationals like AB InBev, LG Electronics and Carrefour, as well as major Latin American companies in Brazil and elsewhere.
- The company’s stock fell even though cloud-communications giant Twilio agreed to buy $50M of Class A shares in a private placement concurrent with the IPO. That will give TWLO a 21.2% stake in the firm, although Twilio’s Class A shares will only carry 1.4% of Zenvia stockholders' total voting power.
- Seeking Alpha contributor Donovan Jones recently analyzed ZENV and concluded that “for investors with a ‘risk-on’ appetite for a growing enterprise IT company in Latin America, Zenvia may be a potential opportunity. But I'll watch the IPO from the sidelines.”