I thought I was seeing things following Robinhood's (HOOD) debut last Thursday, namely a market cap of nearly $30 billion for a company that did less than $1 billion in 2020 revenue. Add to that crazy valuation the controversy surrounding GameStop (GME) trading this past spring and Robinhood's big FINRA fine and you can consider me stumped. Robinhood's initial public offering did go over like a lead balloon. I'm afraid Doug Kass may have this one right when he suggested last Friday that HOOD's unveiling on the public markets could be one sign of a market top.
Other, more reasonably valued IPOs also are going nowhere fast at this point. Krispy Kreme (DNUT) , which originally was expected to price out between $21 and $24, came to market at $17 on July 1, closed at $21 on opening day and now languishes just below $16. I'd like to own Krispy Kreme again, but I'd like to do so at the right price, and the stock is nowhere close at this point, in my view.
Dole PLC (DOLE) , of pineapple fame, which last went public in 2009 before being taken private in 2013, went public again last Friday. Originally expected to price at between $20 and $23, Dole went public at $16 a share, opened at $15 and closed the first day of trading at $14.50. This one, I admit, may be interesting. Dole is the world's leading produce name, with revenue that is 73% higher than the No. 2 name (Greenyard) and more than double the No. 3 company, Fresh Del Monte FDP.
Last year, Dole did nearly $9 billion in sales and produced net income of $80 million. Dole owns 109,000 acres, or about 170 square miles of land, including 5,000 acres (about eight square miles) of what it calls "actively marketed surplus land" in Oahu, Hawaii. Pro forma total debt was just over $1.3 billion as of March 31, 2021.
So, there you have it: Three distinctly different recent IPOs, all of which did not have great debuts. One, Robinhood, may be dramatically overpriced and I have no interest in owning. Another, Krispy Kreme, is one I may want to own the right (read: much lower) price. And a third, Dole, that just might be attractive here.
