Sonos surges 8% in IPO trading debut

Sonos’ priced its IPO
below the expected range.
Sonos

• Sonos opened for trading at $16 on Thursday, gaining
  more than 8%. 
• It had priced its initial public offering at $15, below
  the expected range of $17 to $19. 
• Sonos’ IPO comes as the California-based company
  seeks to build market share in the voice
  assistant-enabled smart speaker market.

Sonos shares opened for trading at $16 apiece on Thursday,
gaining more than 8% during the trading debut. 

The smart-speaker company had priced its initial public offering
at $15 a share on Thursday, below the expected range of $17 to
$19. This gave the company a valuation of about $1.5
billion. 

In its
regulatory filing to go public, Sonos said its speakers were
registered in 7 million homes, and its customers listened to 70
hours of content per month.

Sonos’ IPO came as the California-based company sought to
build market share in the voice
assistant-enabled smart speaker market. Sonos in the
past year released two voice assistant-enabled speakers, the
Sonos One and Sonos Beam, which support Amazon’s Alexa.

Jenny
Cheng/Business Insider

Sonos said it intends to use the proceeds of its IPO to invest in
marketing and development.  

The IPO came roughly four months 

after the direct listing of
Spotify

. The streaming service has recently
filed dozens of patents for hardware devices and music-discovery
software, setting it up as a potential competitor to
Sonos.

Sonos lost $14.22 million — or $0.50 per share — on revenue
of $992.53 million in the most recent fiscal year ending
September 30, 2017, a filing showed. The
firm
 qualifies as an “emerging growth company”
because its revenue was less than $1.07 billion, meaning that
the 
Securities and Exchange Commission
permitted it to make narrower
disclosures about its finances.

The company had $39.7 million in debt as of March
31.

Sonos is listed on the Nasdaq with the ticker SONO. Morgan
Stanley, Goldman Sachs, and Allen & Company were the lead
underwriters of the IPO. 

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