TV Maker Vizio Falls in Debut After Downsized IPO

(Bloomberg) -- Smart-TV maker Vizio Holding Corp., backed by affiliates of Taiwan-based Foxconn Technology Group, fell 9% after its downsized initial public offering.

Vizio’s shares opened trading Thursday at $17.50 after selling for $21 in the IPO. The company and some of its investors sold 12.25 million shares Wednesday to raise $257 million, after marketing 15 million shares for $21 to $23.

The shares closed at $19.10 in New York trading, giving the company a market value of about $3.5 billion.

“We’re here to provide long-term shareholder value,” Vizio founder and Chief Executive Officer William Wang said in an interview. “Today the market is choppy. The market is what it is.”

Vizio filed to go public in 2015 but withdrew that plan the following year after reaching an agreement to sell the company for $2 billion. Vizio terminated that deal with an affiliate of China-based Leshi Internet Information & Technology Corp. in 2017.

The Irvine, California-based company said it shipped 7.1 million smart TVs in 2020, a 20% increase over the previous year. Its devices are sold online, including at Amazon.com, and in stores such as Best Buy, Costco, Sam’s Club, Target and Walmart.

Entertainment Platform

While those sales still account for the overwhelming majority of Vizio’s revenue, its entertainment platform is growing quickly.

Vizio’s Platform+ service is comprised of its SmartCast operating system and Inscape, which powers its data intelligence and services. It supports streaming apps and home smart speakers.

The company had net income of $102 million on revenue of more than $2 billion last year, compared with $23 million in income on revenue of about $1.8 billion in 2019, according to its filings. Only $147 million of the 2020 revenue came from its entertainment platform, with the rest from device sales, the company said. Still, that compared with $63 million in platform revenue in 2019.

Wang said he expects lifestyle changes during the past year to persist after the coronavirus pandemic subsides, with Americans focused on home entertainment, including streaming platforms such as Vizio’s.

Connected Homes

An enthusiastic viewer who polished off “The Queen’s Gambit” TV series in a few days, Wang said televisions will play ever larger roles as a central device in increasingly connected homes. That includes smart speakers and appliances such as, for example, smart doorbells.

“I’m a couch potato,” he said. “If someone rings my doorbell. I don’t want to get up.”

After the IPO, Wang will continue to control the company, according to Vizio’s filings. More than 25% of Vizio’s Class A shares are held by Foxconn affiliates, according to the filings.

The offering is being led by JPMorgan Chase & Co. and Bank of America Corp. Vizio‘s shares are expected to begin trading Thursday on the New York Stock Exchange under the symbol VZIO.

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