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Stars Align For Line

Editor’s Morning Note: Line hopes to make a splash with its IPO tomorrow. Early indicators show strong demand for the equity as markets set new highs.

Screen Shot 2016-07-13 at 10.20.12 AM

It’s nearly time for Line, which will commence trading tomorrow on these shores. The company’s long-awaited flotation was priced above early expectations, despite the market turmoil caused by Brexit that threw a shadow over the IPO.

Investors do not seem deterred. As these pages noted on Monday, the public markets are setting new highs ahead of the public offering. That fact has stayed true to so far. The Nasdaq is over 5,000, the Dow is over 18,000, and the S&P 500 is over 2,000. That’s about as fair a wind as you could hope for.

Perhaps unsurprisingly then, Line seems to be attracting strong demand. Here’s Bloomberg on the matter:

Screen Shot 2016-07-13 at 10.03.59 AM

Putting that $36 figure into context, Line initially decided to price its shares between  $26.50 and $31.50, before settling on the high end of the range. The difference between $36 and $31.50 is 14.29 percent1. Not a bad first-day bump if it persists.

This is the last time that you and I will discuss the LIne IPO in advance, and one of the last times we’ll likely look at the company. Like watching your kid go off to college, when a company goes public we mostly hand it off here on the Mattermark editorial team.

The PC Market Shrinks

Briefly, before you get back to Outlook and grinding your teeth, let’s take stock of the proto-smartphone market. The fastest gun on PC shipments is always VentureBeat’s Emil Protalinski, so we’ll trust him on the matter:

Screen Shot 2016-07-13 at 10.15.47 AM

A few things matter here: The PC bear market is now approaching the two year mark; 64.3 million PCs puts the market notably under the 300 million annual unit mark; that’s not great for Windows 10, which will depend on normal PC refresh cycles to reach its 1 billion unit goal; PC sales rose in North America.

The last element is the most notable, I expect. It surprised me at least. If North America can post gains for the first time in more than a year, I don’t see why other markets can’t do the same when macro conditions improve. The PC market is large enough in terms of units and dollars and global reach that it is impacted by such things2.

If you look as far into the future as you can, you can almost make out Dell going public again. Almost.

  1. I agree, this is a perfect moment to discuss unit fractions. Why is it fun that the ∆ from 31.50 to 36 is 14.29 percent? Simple: It’s 4.5 from 31.50 to 36. The unit fraction 1/7 is 0.142857. Thus, given the percentage result from our initial Wolfram calculation, we can infer that the ratio of gain to principle is 1 to 7. To be fair, I saw the percentage, noticed it was a unit fraction, and then like an idiot fact checked the ratio by multiplying 4.5 by 7. But, I’m not smart, so what can you do. Back to work.
  2. Unlike, say, your startup.

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