Slow Week for Direct IPOs is Overshadowed by Dell’s Indirect Approach

​While no US-based companies officially debuted shares this week through initial public offerings, a few companies made news in the IPO arena. Dell has returned to public markets through an unordinary $22 billion deal after going private in 2013. Wireless speaker maker Sonos filed for an IPO Friday with the Securities Exchange Commission. Also, doubts have begun to grow around Saudi Aramco’s initial public offering.

• After a five-year hiatus from public markets, Dell will make an indirect return to the New York Stock Exchange (NYSE). Dell founder and CEO Michael Dell previously took the company private in 2013 in a $25-billion transaction, with help from Silver Lake Partners, to focus on growth without having to answer to Wall Street. While private, Dell acquired EMC Corporation for $67 billion, creating Dell Technologies. VMWare, a company that was majority-owned by EMC when EMC was acquired by Dell, is now a majority-owned company of Dell’s that trades publicly on the NYSE. Now, Dell is planning on a reverse merger that will convert its Class V shares - shares that track a portion of its stake in VMWare - into Class C common stock. Class V shareholders also have the option to take cash instead of the Class C common stock. The new Class C common stock will trade under Dell Technologies, Inc. (NYSE: DVMT).
• Wireless speaker manufacturer Sonos filed for its initial public offering Friday through the Securities Exchange Commission. The IPO plans were registered as wireless speaker systems have grown in popularity around the world. Sonos’s speakers are highly popular among music junkies, largely because of the company’s partnerships with nearly 100 music streaming providers. The company even produces a high-quality speaker lineup with Amazon Alexa capabilities. The company hopes to raise $100 million and trade under the ticker ‘SONO’ on the NASDAQ.
  
• Progress has stalled for the IPO hopes of Saudi Aramco. Saudi Arabia’s state-run oil company has been slowly pursuing an initial public offering since 2013, when oil prices were under $30 a barrel. Now that oil prices have rebounded, and the Kingdom’s budget has shored up, the pressure to list is no longer there. When Saudi Arabia first floated the idea, the hope was that publicly listing even a small portion of the company’s ownership could raise enough cash to bolster the government’s coffers. Saudi Aramco is widely considered one of the most valuable companies in the world. The government had hoped to use any capital inflows from an IPO to invest in more modern, non-oil sectors and diversify the Kingdom’s economy. However, with oil near $70 a barrel, the country has become hesitant to give up ownership because it can now boost oil production to raise cash.