Will pending IPO establish Redfin as a billion-dollar real estate company?

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Online real estate brokerage Redfin filled in a few blanks originally left empty on its recent initial public offering request with the U.S. Securities and Exchange Commission, revealing the company thinks it is worth around a billion dollars.

The original S-1 form filed with the SEC back in June left out exactly how many shares Redfin plans to sell, along with its target price range.

Now, in its amended S-1 form, Redfin disclosed it plans to sell 9,231,000 shares of common stock, which in turn provided additional insight into how much the company thinks it’s worth.

In the situation that the stock offering does extremely well and sells out, Redfin said the underwriters, in this case investment banks, will also have the option to purchase up to an additional 1,384,650 shares at the initial public offering price. Those banks then have the option to sell the shares to other investors.

While the set price of each share is not yet final, it is estimated that the initial public offering price per share will be between $12.00 and $14.00.

In the best-case scenario, where the company sells its shares for $14 a share, along with the extra shares, the company would raise $149 million. At the lower estimate, where the shares sell for $12 and sell none of the extra shares, the company would raise $111 million.  

But this stock offering is still less than 10% of the company’s overall value. Outside of the slated shares for the IPO, Redfin said there are 70,305,768 shares of common stock outstanding.

This means that if the company sells all of its shares (not including the extra ones), it would approximately establish the company as a billion-dollar company.  For added perspective, Zillow’s market cap currently sits at $8.56 billion.  

Redfin said it intends to use the net proceeds that its receives from the offering for “working capital and other general corporate purposes, including technology and development and marketing activities, general and administrative matters, and capital expenditures.”

It added that it would use a portion of the net proceeds to invest in or acquire third-party businesses, products, services, technologies, or other assets.

However, it cautioned that it currently has no specific plans for the use of the net proceeds that its receives from this offering. For more detail on the original offering, check here

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