Market RoundUp: Fiverr Takes The Market By Storm

in Market RoundUp by

Today’s Headlines:

  • Fiverr Soars 90% On First Day
  • Shipping Rates For Oil Rise After Tanker Attacks
  • Everything To Know About The Slack Direct Listing
  • Facebook’s New Cryptocurrency Has Big Customers

June 13th, 2019 Market Close

2,891.64 +0.41%
26,106.77 +0.39%
7,837.13 +0.57%
39.90 +90.0%
177.47 +1.12%
141.97 +0.37%

Fiverr Soars 90% On First Day

What to know:

Fiverr (FVRR) soared over 90% from its IPO price of $21 in trading today, settling at $39.90 for market close. The IPO offered $5.3 million shares and ended up raising $111 million. Fiverr is looking to use the capital to expand in international markets as 70% of its revenue comes from English-speaking countries.

The company was founded with the belief that “people should be able to buy and sell digital services in the same fashion as physical goods on an e-commerce platform.” In fact, Fiverr got its name partly because many of the services it originally listed were $5 and because it aims to let customers find freelance work in under 5 minutes.

Why it matters:

Fiverr is not the first “gig economy” startup that has had its IPO recently; it follows companies like Upwork, Uber, and Lyft. As of late, public markets have yet to accept gig economy startups, with fellow freelance platform Upwork still trading around its IPO price. However, proponents of the company believe that the transparency that Fiverr offers through fixed fees for projects instead of hourly rates will help it perform well in the future.

Since its creation, the freelance platform has had over 50 million transactions with over 5.5 million buyers and 830,000 sellers using the company’s services. Fiverr’s revenue was $75.5 million last year, growing from the $52 million reported from the year before. However, the company’s losses have been growing as well, increasing to $36.1 million from the $19.3 million announced before. Although Fiverr made a splash today, investors are still wary as to whether Fiverr will meet a similar fate as its gig economy companions.  

Read more:

Shipping Rates For Oil Rise After Tanker Attacks

What to know:

Near the Strait of Hormutz in the Middle East, two oil tankers came under attack this morning. Although the U.S. intelligence accusation of Iranian responsibility has yet to be confirmed, shipping stocks have been on the rise throughout today. One of Frontline’s (FRO) ships was involved in the attack and its stock has surged over 10%.

Why it matters:

Chief analyst at shipping trade organization BIMCO stated today that the attacks “likely cause shipowners and operators to ask for a premium on freight rates for trading in the area, as risk is now clear and present.” Substantial increases in crude oil freight rates are anticipated as reflected already in the surging prices of shipping stocks today. This incident follows the May attacks to Saudi tankers that caused insurance premiums to increase 5%-15% according to shipowners.

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Everything To Know About The Slack Direct Listing

Slack, the workplace communication tool, is set to list its shares publicly next week, with valuation expectations between $16 and $17 billion, over double the value the company obtained in its last private funding round in August. However, the valuation is not unwarranted as Slack said Monday that it expects to generate over $590 million in revenue in its 2020 fiscal year, setting a growth rate of close to 50%. This is still a reasonable figure as Slack’s annual revenue growth rate was 110% and 82% in 2018 and 2019 respectively. Also, the company posted an annual revenue of over $400 million this last year fiscal year, with less than 1% of customers contributing towards 40% of the revenue. Slack has also announced multiple partnerships with other software companies, including Dropbox last Tuesday.

A direct listing means that Slack will not create new shares to fund itself, instead allowing investors to sell existing shares.

Facebook’s New Cryptocurrency Has Big Customers

What to know:

Facebook will unveil its new cryptocurrency, Libra, next week and plans to launch it next year. Already, Facebook has had more than a dozen large customers sign up to back it, including Visa, MasterCard, PayPal, and Uber. Each of the client corporations will invest approximately $10 million in an organization that will manage the currency. Libra will be backed by a number of government-issued currencies in order to sidestep the wild fluctuations that have plagued other cryptocurrencies.

Why it matters:

Although bitcoin has been around for over a decade, the majority of consumers have yet to adopt it to pay for everyday items. Facebook hopes that it can change this by offering a cryptocurrency that is based upon its massive social network. This project has been kept secretive, with some members of the consortium having yet to know how the coin will work, but Facebook will be releasing a white paper next week that should publicize the inner workings of Libra. Although Facebook plans to keep the cryptocurrency network separated from its social platform, many speculate it will still be able to have considerable influence over it.

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Word of The Day:

blockchain: The public ledger that keeps track of all Bitcoin transactions, eliminating the need for third party payment processing. Each block is like a banking statement with users verifying transactions between two people.

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