Vroom.com IPO Prospectus analysis — A company driving through the COVID-19 pandemic

Source: https://fred.stlouisfed.org/series/UNRATE/
Source: https://www.bloomberg.com/news/articles/2020-02-21/the-world-s-biggest-economies-get-a-jolt-of-government-spending

“there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option”

Dara Khosrowshahi: https://apnews.com/d9544a3d6f4cdc0f55197ec4b9fccc03

Source: https://www.apple.com/covid19/mobility
Source: https://www.renaissancecapital.com/IPO-Center/Stats/Pricings
Source: Edmunds
Source: S-1

“More than 80% of the cars for sale on Vroom are less than three-years old. The remainder are vehicles that we’ve thoroughly checked out and are supremely confident will run and run for years to come.”

In the S-1 prospectus, the company updated the information disclosing that the average year of its inventory is five years and the majority of the inventory is priced at above $20,000.

Source: S-1
Source: Vroom.com S-1

“We are grateful to Allon, a visionary CEO who has transformed Vroom into the most compelling online car store in the world, generating more than $1 billion dollars in annual revenue. As the business continues to scale (…)”

At face value this seems like a regularly issued letter from investors congratulating a founder who grew an idea to a billion-dollar revenue business. However, the $1 billion revenue is essentially flat compared to the 2019 numbers, and while Vroom.com has not provided financial statements back to 2016 in this version of the prospectus, I’ll update this article if and when the company reissues it, but I assume that they hit reverse for about three years before posting the same billion dollar revenue.

Source: S-1
Source: S-1 Prospectus
Source: S-1
Source: S-1
Source: S-1 and Morningstar
Source: S-1 and Morningstar
Source: S-1 and Morningstar

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