Hi there warriors of the wave. No introduction needed anymore. It's time for your next IPO article. June so far has been an INCREDIBLE month for so many traders, and my objective with this is to just introduce you to an upcoming IPO that you may (or may not) want to make some plays with! It's up to you; and either way there are so many moves happening in the markets at any given time that you have no traders remorse! This IPO is a company that I truly love, and use quite often! That company is Chewy!
Chewy, while sounding like it could be a StarsWars fan club, is a solely online retailer of pet food and other assorted pet products. Fun fact: Chewy is actually owned by PetSmart (PETM) and was acquired in May of 2017 for a whopping $3.35 billion! It was founded in 2011 by Ryan Cohen and Michael Day and has grown significantly in just 8 years. They currently have around 8,000 employees and are headquartered in Dania Beach, Florida (wow, finally a company that is not headquartered in California)!
Chewy's business model is similar to Amazon. Becoming the online retailing expert, just for pet products. They sell everything from the obvious pet food to toys and healthcare. Chewy was one fo the first pet retailers to implement the "Autoship" feature which when opted in, will automatically ship your pets food to you on a schedule for a small discount. Shortly after they started this program other pet stores with online presences followed. Chewy has not done too shabby since it's inception. In March 2012, the company estimated a total yearly revenue of $26 million, despite losing money in its first half year. By 2017, that yearly revenue has grown to over $2.1 billion and Chewy alone accounts for more than 51% of pet food/litter sales in the US. Last year that number grew by 67.9% to $3.5 billion in 2018, showing that Chewy is full steaming ahead. While Chewy is not profitable yet, I see bright things ahead for them. Similar to Amazon, Bezos sold books at a STEEP discount and took losses for years as a way to propel itself forward. Chewy seems ripe to follow in similar footsteps.
As far as competitors go, you have a few to note. Most obviously there are the other Pet Store companies like Pet Supermarket, PetSmart (kind of) but you also have to take into account Amazon. Chewy however has poised itself as not only a pet retailer but also an expert in the field. They continue to set themselves apart from others. One thing in particular is that if you go to the website, there are all sorts of Chewy exclusive videos educating you on all topics such as the food brands, techniques on feeding medicine to your dog; the categories are endless! Almost every single product has a fun video to explain how it works! Even further, what I think sets Chewy apart is it's renowned customer service. They have been known to send custom pet portraits, free toys, and all sorts of other fun swag to it's buyers! In fact, 2 years ago, after using Chewy for about a year, they wrote a legitimately handwritten Christmas note labeled to me and my dog Highland thanking us for our business! It's little things like this that will get you a customer for life!
Chewy just IPO'd on Thursday at $22 a share, so we will be waiting to watch how it moves for the next few days before I go into any analysis! Stay tunes on Jerremy's thoughts on this IPO as well in his stock reviews and in the trading rooms. I am confident the RLT gang will be watching this one for some quick trades. Long term, it's a very interesting perspective. This could be a mix of ETSY, AMZN, WMT and PETS. I think it's going to do well (and it will be a surprise to many).
If you have a fur baby, you might simply want to keep your eyes on this one. Remember ~ the recent IPO's I loved and was bullish on were BYND and ZM. Just saying....
Thanks for reading! I hope you found this article enriching and fun to read! If you have any questions just let me know. Or if you just want to send me an email with a picture of your pet, that's awesome too ;)