Vizio Begins Life as Public Company, Says It’s Entering ‘Next Chapter’

Vizio took the fast lane toward going public Thursday when it priced its 12.25-million-share initial public offering at $21 each, valuing the company at close to $4 billion. But shares plunged nearly 17% to $17.50 when they began trading just before 1 p.m. EDT on the New York Stock Exchange under ticker symbol VZIO. There were fewer than four weeks between the March 1 filing of Vizio’s S-1 registration statement and the first shares changing hands. The SEC declared the registration and IPO effective Wednesday. The stock spent its entire first day in negative territory, closing 9.1% lower Thursday at $19.10.

The $21 IPO price was at the low end of the range Vizio proposed in its March 16 amended registration statement (see 2103160029). Vizio’s holding company is offering 7.56 million shares to the public, and “certain selling stockholders” are offering 4.69 million, nearly 40% fewer than proposed March 16. Chairman-CEO William Wang will control a majority of the public company’s shares and about 92% of its voting power. Contract manufacturers AmTran and Foxconn and LCD panel maker Innolux are among Vizio’s top outside shareholders.

The competitive implications of Vizio going public are numerous. The consumer tech industry will be watching to see if Vizio makes it a practice to host regular quarterly earnings calls and, if it does, whether the usually reclusive Wang participates. With Vizio’s Q1 ending March 31, it would be expected to report first quarterly results as a public company around late April.

The S-1 opened Vizio’s books to a public curious about the workings of a prominent TV vendor that for two decades has played its operations close to the vest. The filing depicted Vizio in a very positive light (see 2103010043). It said Vizio shipped 7.1 million smart TVs last year, up 20.3% from 2019 and 61.4% from 2018.

Vizio converted 65% of its 2020 smart TV shipments into active accounts for its SmartCast streaming platform, nurturing and expanding its future SmartCast advertising business, said the filing. SmartCast viewing hours last year increased 173% from 2019, with a 54% increase year over year in hours viewed per active account, it said.

“Consumers are more and more moving to the connected TV space," Vizio Chief Financial Officer Adam Townsend told Yahoo Finance Thursday. "They expect to have the apps that they want, their subscription services, as well as free streaming content available all in one place, and we’re delivering against that.” The IPO will bring Vizio “into the next chapter of its evolution,” he said.

Vizio sees itself as “completely transitioning away from its legacy of being a device company,” said Townsend. “Consumers are cutting the cord more and more and going onto these platforms. For advertisers, it’s becoming increasingly harder to get to those viewers.” Vizio is bringing consumers “into an environment where we can partner with those advertisers and allow them to access those viewers that are now disappearing from some of the linear, traditional world,” he said.

The company has been able “to sustain inventory and supply” throughout the global semiconductor and components shortages, said Townsend. “We partner with the largest manufacturers in Asia, and they supply us panels and finished goods,” he said. “All the largest retailers” carry Vizio products, he said. “We have great shelf share with all of those partners, and that helps us assure that we have products available to consumers.”