“The COVID-19 pandemic has impacted us in a number of ways, including an adverse impact on our e-commerce operations,” Vroom said in its prospectus.īetween March 11 and March 31, as most U.S. Coronavirus impactĭespite the focus on online sales, Vroom was not immune to pandemic-related declines in business. Vroom is led by Paul Hennessy, who previously was chief executive and chief marketing officer of, both owned by Booking Holdings Inc. The underwriters have a 30-day over-allotment option to buy up to 3.2 million additional Vroom shares. Underwriters include Goldman Sachs, BofA Securities, and Allen & Co. The company is offering about 21.25 million shares, for a market capitalization of around $2.48 billion. Vroom’s IPO price of at $22 a share was upped from a previous range of $18-$20. IPO terms suggest valuation of nearly $2.5 billion Here are five things to know about Vroom. returned to public markets on Wednesday after nine years as a private company, raising $1.93 billion.Īccording to Renaissance, 35 IPOs have priced in 2020, a 42% drop so far from last year. The IPO market has shown more activity in recent weeks, with the biggest deal of the year pricing at the higher end of its price range. “That alone could drive interest in Vroom,” he said. Shares of Carvana, Vroom’s main competitor, are trading more than 600% above the company’s 2017 IPO price. went under shelter-in-place, public-health orders to slow the spread of the virus. Shares, which have rebounded since March, when most of the U.S. Kennedy points to the success of Carvana Co. Consumers are increasingly interested in shopping online for cars, and the COVID-19 outbreak (has) accelerated that trend.” “However, tech-focused used car platforms like Vroom proved more resilient. “Vroom falls into that category.”Ĭar dealerships are under pressure as consumers both delay big-ticket purchases and limit non-essential travel, if the dealerships are open at all, Kennedy said. “The market is placing a high value on next-generation companies that can thrive in a post-COVID economy,' said Matthew Kennedy, a senior IPO market strategist with Renaissance Capital, which manages IPO-focused ETFs. Vroom already has had to cut prices and its profit margins have shrunk. With the economic uncertainty and turmoil in the car industry, however, its business model could become more challenging. Vroom could benefit from the broader shift to online shopping accelerated by the pandemic.

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