Vizio breaks in on market debut and begins buying and selling at $ 17.50

Traders work on the trading floor of the New York Stock Exchange.

NYSE

Vizio, one of the top sellers of high definition televisions in the US, made its debut on the New York Stock Exchange on Thursday as the company attracted investors for its battle against Roku, Amazon and Google in the fast-growing streaming market.

Vizio’s shares plunged 9% in trading, trading at $ 19.10 per share. The company’s stock opened at a price of $ 17.50 each. Vizio has valued 12.25 million shares at $ 21 each. That was the lower end of its range, valued the company at around $ 3.9 billion.

Founded in 2002 by Taiwanese immigrant William Wang in Southern California, Vizio emerged as the leader in the highly competitive US flat screen television market five years later, selling its sets for hundreds of dollars less than its competitors and signing deals with large corporations. Box dealers like Costco and Best Buy. Through 2010, Vizio was making nearly $ 3 billion annually in TV sales.

The TV business is smaller now than it was a decade ago because falling prices offset increased shipments. Rather than just making money from the devices themselves, Vizio has turned to its streaming system called SmartCast, which offers subscriptions to Netflix, Amazon Prime Video, and Disney Plus and helps advertisers connect with relevant consumers.

While device sales rose by just 7% to USD 1.9 billion in 2020, Vizio’s streaming business or the so-called “Platform +” recorded a growth of 133% to USD 147.2 million last year. Streaming accounted for only 7.2% of total revenue, but accounted for 38% of gross profit due to software margins and enabled the company to quadruple its net income to $ 102.5 million.

“Home entertainment is more important than ever,” Wang said on CNBC’s Squawk Alley Thursday morning before the shares went public.

The number of SmartCast accounts rose 61% last year to 12.2 million. Within the operating system, Vizio makes money through advertisements on the home screen and in some free content, as well as cutting subscription sales to Netflix and other services when users log into their SmartCast TVs.

William Wang, CEO of VIZIO, at LeEco and the VIZIO press conference in Hollywood where it was announced that LeEco had acquired VIZIO for $ 2 billion in Los Angeles on Tuesday, July 26, 2016.

Jeff Lewis | AP

Vizio faces a major challenge as it grapples with deeply pocketed tech companies. Not only does it have to keep competing with Samsung and LG to sell TVs directly to consumers, but it also has to convince users to stick with its streaming software instead of plugging in a product like a Roku stick or a device from Amazon or Google .

Wang said investors asked more questions about competition with the streaming companies than TV makers on the virtual roadshow. The selling point for consumers is that Vizio’s television and operating system are integrated so that the company can ensure that the picture quality is top notch and that all navigation tools are easy to use.

“We are very unique because we focus on hardware and software,” Wang said in an interview after ringing the doorbell on the NYSE. “In my opinion, someone has to put it all together.”

This is Vizio’s second attempt at going public. The first was in 2015. Vizio pulled its IPO in 2016 after China’s LeEco offered to buy it for $ 2 billion. That deal fell apart the following year due to regulatory complexity and in 2018 Vizio sold shares to Taiwanese manufacturing partners Foxconn and Innolux.

– CNBC’s Jessica Bursztynsky contributed to this report.

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