On Feb 22, 2021 Oatly – the Sweden-based maker of vegan food and drink products, which counts Oprah Winfrey and rapper Jay-Z among its prominent backers, has submitted plans for its Nasdaq initial public offering (IPO) to regulators.
UPD: The company went public on May 19, 2021 and is available for trading from May 20 through Freedom24.
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What is an IPO and how it works
IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.
To go public, a company must have a track record of growth and other favorable results and hire an investment bank (Morgan Stanley, JPMorgan and Credit Suisse in Oatly's case) to come in and underwrite the IPO. The underwriters also performed due diligence and verified financial information and business model.
Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company with underwriters' help sets an initial price and date for the stock to begin trading on a stock exchange.
Company Profile and Financial Indicators before Oatly IPO
Oatly, a Sweden based manufacturer of oat milk, yoghurt, and ice cream, is getting ready for an IPO in the NASDAQ.
In July 2020, the company total value was assessed at $2B; at that time, Oatly raised $200M in investments by selling a 10% share to Blackstone, an investment company, Oprah Winfrey, a famous US host, and Natalie Portman, a renowned actress, as well as to Howard Schulz, formerly the board chairmain at Starbucks, and Roc Nation, a company owned by the rapper Jay-Z.
Founded back in 1994 by Rickard and Björn Öste, Oatly is currently marketing its products in 20 countries through large retail chains, such as Target and Tesco, as well as through small shops, premium natural product stores, and online retail stores, such as Tmall by Alibaba. Oatly is also a partner of both local and world-renowned coffee shops, such as Starbucks. As of late 2020, Oatly products were sold in 60,000 stores and 32,000 coffee shops.
Oatly has a 53% share in the grain milk market in Sweden, Nielsen reports. The company also posts growth in its key distribution market, namely in the UK, the US, and Germany. In 2020 alone, the sales went up by 99% in the UK, by 182% in the US, and by 199%in Germany, compared to 2019.
The overall sales amounted to $421.40M in 2020, which is 106.50% more compared to 2019. The gross profit was at $129.20M in 2020, while the losses are still at $60.40M because of further investment into the company development, which includes expansion to new markets, manufacturing, and brand awareness.
How to Buy Oatly Stocks Before the IPO (Offering Price)
In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.
Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Oatly IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Oatly shares when the company goes public via a commission-free trading app like eToro or Freedom24.
🚨 Detailed Instructions How to Participate in the Oatly IPO before public trading:
Below we share the instruction how to participate in the approaching Oatly IPO using Freedom Finance (Freedom24 platform). This marketplace is chosen as an example because almost all high-profile IPOs are traded via this platform.
* Freedom Finance services are NOT available to US citizens and residents.
- Apply for a Freedom Finance account — you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
- Deposit your account — to participate in an IPO, your account must have available funds in the amount you send IPO application for.
- 💡 Tip: It's recommended to deposit your account in advance. Often the exact IPO date is undefined until the last day. You may have a short notice for participation and account deposits also takes time for processing. Also, sometimes Freedom sends last-minute IPO offer when you have 2 hours to participate.
- Submit a request to participate in the IPO — when applications are open select Oatly and click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
- Wait for allocation — The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
- Start of trading — With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start — a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
- Closing your trade — At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion — leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the ‘Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Is investing in IPOs profitable?
Not always. The average return at the end of the lock-up period is 72%, past IPOs data.
When is the Oatly IPO date?
May 19, 2021
What is Oatly IPO price range?
$15 and $17 per share
How to Invest in Oatly after the IPO date (opening price)?
After the IPO you can buy Oatly stocks via Freedom24 on the first trading day. Also you can use a commission-free trading app like eToro.
In what currency Oatly IPO and post-IPO shares will be traded?
The Oatly IPO and stock trading currency will be USD.
If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Wise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. Wise never hides fees in the exchange rate.
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What is the Oatly (stock symbol)
OTLY
Oatly Registration Statement on Form S-1
Oatly Registration Statement on Form S-1 —
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Sources used: CNBC, Financial Times
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