Online residential real estate brokerage Redfin has filed with the Security and Exchange Commission plans for an IPO expected to go live on Friday. Shares of Redfin are expected to snare in between $12 to $14 for the company’s effort to raise $120 million. According to speculators, the company underwritten by the likes of Goldman Sachs, Allen, Merrill Lynch, RBC Capital Markets, Oppenheimer and Stifel has an implied market cap of more than $1 billion.
Redfin will be traded under the Nasdaq ticker symbol RDFN, according to Seeking Alpha and other media. Since its launch way back in 2004, Redfin has grown to be the #1 visited brokerage site in the US.
For those unfamiliar, Redfin has the stated mission of becoming a real estate brokerage for “reinventing the way people buy and sell homes”. The company's key differentiator is its high-tech software that allows potential buyers to minutely filter and search potential properties. On the selling end, Redfin allows homeowners to list their homes, find an estimate of its value, and learn what similar homes in the area are selling for, and etc. Redfin CEO Glenn Kelman, told CNBC in May that the company's sales were being limited by historically low inventories of homes:
"We're going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch."
The IPO comes with positive recommendations by experts in the know, as the company has shown strong year-over-year revenue growth for the past several years. The various market analysts also point out that Redfin has plenty of room to grown grow through continued market expansion and new services. Here’s what Investing.com’s David Trainer had to say about investing in Redfin:
“As the Redfin (NASDAQ:RDFN) IPO approaches, investors must decide whether the firm is a traditional real estate brokerage or a technological innovator likely to disrupt the traditional real estate brokerage market. RDFN currently looks like a traditional brokerage and generates roughly 90% of its revenue from traditional commissions.”
Trainer makes the valid point that additional capital from the IPO might certainly power-up the innovation and reach of the “agent killing” platform. However, the author also cites some major risks for throwing in with Redfin. The most substantial of Trainer’s cautions being competition from both brokerages and tech firms. Despite this, eagerness and the tangibles of potential seem certain to win the IPO day for Redfin. I see no reason for share estimates to be anything less than amazing.