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Equity value of rent after the ipo

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Reference no: EM133110068

As before, answer and/or evaluate their statement: "I'm trying to figure out this whole IPO valuation thing. As an example, suppose that RENT was worth $940 billion pre-IPO. Their current market cap is about $740mm, but the stock has dropped lately due to Omicron, so that seems like a reasonable estimate. From Sources of Capital on Factset, it looks like they raised $357mm in their IPO, so lets assume that this was their target net-of-fees proceeds. From reading the S-1, it looks like there were about 43 million shares outstanding pre-IPO. I think that we could have charged them 3% as our underwriting spread. I need to know the following:"

1) What would have been their target gross proceeds raised before our fees?

2) What is our estimate for the equity value of RENT after the IPO?

3) What percentage of the firm is now owned by new investors?

4) How many shares should they have issued?

5) And, at what price?

Reference no: EM133110068

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