Despite being on the riskier side of the deal, initial public offerings or IPOs often give investors good returns in a relatively short time. On average, they can bring investors 40% in the first 3 months. IPOs can be a great way for companies to reach the next level by making their shares available on the open market. You may have heard about Compass if you’re familiar with the US real estate market. Maybe you’ve even asked, “is Compass publicly traded?” Read on to find out about Compass stock IPO and all the important information about Compass IPO date and price.
Compass is an American real estate broker that operates as an Internet platform for selling real estate. It was founded in Manhattan in 2012 and was the first company to build their own mobile app for real estate agents, simplifying the process for buyers as well as agents who are constantly on the move.
The company’s specialization is on luxury homes known for their high margins. Compass employs over 25 thousand agents who get their percentage on sales, giving a percentage of that to the company.
The company was started by Robert Reffkin, a former Goldman Sachs executive and Ori Allon, a former director of engineering at Twitter and founder of two startups, Julpan and Orion, which were acquired by Twitter and Google respectively. Reffkin’s idea was to create a platform that would attract the best agents from the around the US. To achieve this, he wanted to build the best tools that would simplify scheduling, including for virtual home tours, appointment management, as well as marketing tools for creating ads and campaigns.
The technology was an important part of the company’s approach, Allon’s experience in tech pushed the company to develop machine learning algorithms to constantly improve the platform and give users what they need.
The company took a blow in the Covid pandemic in 2020. They had to cut their staff by 15%. But the bull market soon followed, which reversed the company’s positions — the number of transactions grew by 66% and their revenue increased 56%, reaching $3.7 billion.
Even though the company didn’t attain its goal of 20% market share, Compass’ strengthening position prompted the question, “when is Compass going public?”
At the beginning of 2021 the company decided to start the IPO process, filing the paperwork on March 1. The main underwriters for the IPO were Goldman Sachs, Morgan Stanley and Barclays.
Read on to find out about Compass IPO 2021 and other key info.
Compass Public Listing Key Data and IPO Date
Compass IPO Date: March 31, 2021
IPO stock price: $18
Valuation at IPO: $7 billion
Market cap (1/9/22): $1.17 billion
CEO: Robert Reffkin
Category: EDP stocks
Compass launched its IPO on the NYSE on March 31, 2021 under the stock symbol COMP. The company offered 25 million Class A shares, the Compass IPO price was set at $18, valuing the company at $7 billion. Compass raised $480 million in the process.
Trading opened at $21.25, 22% above the initial price. However, that was just about the only success of the company’s performance on the market. Since then the stock price has been falling consistently, the stock now trades at around $3, almost 90% down from the IPO price.
The current market cap of $1.17 billion is nowhere near the company’s valuation of $7 billion before the IPO. But that’s what happens when you go public.
CEO Robert Reffkin, who owns 6.6% of the company, reached a net worth of $500 million on the day of the launch. However, since the stock plummeted 70% since their IPO date, so has Reffkin’s net worth.
So What About Investing Now?
While it’s hard to call the Compass IPO a success, the overall market downturn hit many recent IPOs and tech companies. One of the main questions investors have is, is Compass really a tech company? Does it really offer an innovative edge or are they just a real estate broker with an app? Time passed and many of the tools that Compass offers are already standard.
Although the company’s revenue has been constantly growing, they fail to generate a profit. The stock recently fell by 22.7% after the announcement of the company’s decision to lay off 10% of their employees. Even though the company is current market cap of just over $1 billion is nowhere near its previous valuation, even this may be expensive.
If Compass is to succeed, they have a lot of work to do to fight against competition and the right economic conditions. In general, investments like IPOs are speculative and risky. While it’s fun to try, don’t rely on IPOs to bring you money, timing the market is hard.
What’s better is to build a balanced portfolio of stocks in an industry you know or believe in. Download Gainy to check out TTF stock collections to invest in themes you like or investment strategies you’d like to try. Check out our IPO section to look at other scheduled IPOs. If you want to find companies that match your interests, investment goals and portfolio, try Gainy for some great IPO investment ideas, as well as established blue-chip companies and a variety of other assets.
Is Compass a public company?
Yes, the Compass stock IPO date was May 19, 2021. The real estate company was listed on the NYSE with the stock symbol COMP. When a company launches an IPO (or initial public offering) this means they become a public company whose shares are traded on the stock exchange.
Is Compass a SPAC?
Compass decided to go for a direct listing instead of a traditional IPO or merging with a special purpose acquisition company (SPAC). These are black-check companies incorporated solely for the purpose of merging with a promising startup. Interestingly, there is another company called Compass Digital Acquisition Corp. that went public in 2021, but it is not related to Compass Inc.