Resideo IPOs, Then Plunges

By: Dan Gelinas, Published on Oct 31, 2018

ADI and Honeywell Homes management have been touting their spinout and IPO for months, including appearing on Wall Street as they widely shared on social media:

And:

However, the stock is down 29% from the start of when-issued trading, as shown below:

[Update: it fell again on day 3, falling as far as $19.40 but finishing the day down just another 3.79% at $21.08.

What is happening? What is the outlook for the newly independent company?

In this note we look at:

  • Strong Optimism from Resideo
  • Resideo's IPO
  • Steady Decline Over First Two Days
  • Valuation
  • Bull and Bear Case from Financial Experts

Strong ******** **** *******

*** ******* ******* *** announced ** ******* **** and **** *** ********* year, *** ******* ******** for *** ************ ******** ********** **** in *** **** **** on ******* **, ****, **** ***** *** Joe ***** ********** ********** that *** ******* ***** launch, **** *** *** create ***** *** ************:

***** ***, **'** ******* to *** *** **** executed ****. ****'* ********* number *. ***** ***, it's ***** ******* *** of *** ***** *** being ******. **** ** not * ***** ** company ****'* ****** ** figure *** *** ** get *** ******** **** he ***********. ** **** a ****** ******* ***** and **** **** ****. We **** **** **** top *** ****** *****. I’m ********* **** *** team **’** *** ********. We’re ****-********** ** ***** shareholder ****** **** *** future.

** *** ******** ****, Resideo ****** ******* ** company ***** ******* *** opening **** ** *** New **** ***** ******** on ******* ****, ********** with *** ***:

Resideo's ***

*** ***** ***** "****-****** *******" ** ******* ** at $** *** ** fell *** *** **** 2 ***** ** **** officially **** ******* ******* at ~$**, * **** of ***** **%:

Steady ******* **** ***** *** ****

*******'* ***** *** * steady ******* **** *** first *** **** ** trading *** ******** ********* under $**:

*********

*** *******'* ****** ********* is *** ~$*.* ******* USD (*** ******* ****** x ~$** *** *****) compared ** ******* ** ~$4.5 *******. ** ** low ******** ** *****.

***** **** ************ / **** distributor ******* ***** ********* but **** **** ****, it ** *** ***.

************ **** ** *** significantly ***** ********** ******** to ***** ***** ***** those businesses ******** ***** ****** relative ** ***** **** manufacturers. *** *******, ******* does ****** ~$ * billion ** ******* *** only *** * ****** market ************** ** ~$* billion. ** * ******* ratio, *** *** **** of *******'* ******** ***** ***** at ~$*** *******.

*** ********* **** **** of *** ******** ** significantly **** ********** **** the *** ****, **** though ***** *** ******** less *******. *************, **** with ****** ****** ***** like ********* ***** **** to ***** ** ** revenue ** ******.

********, **** ***** ************** put ******* ** * $3.2 ******* *********.

Analyst *****

** ******* ** ************.*** had **** *********** ****** to *** ***** *** Resideo *** [**** ** longer *********] *** *** it ********* ** ** did, claiming **** *** **** can ** ********** *** factors. *****, **** ***** investors *** ***** ******** to ****:

****-**** *** *********** ** investors (*** **** **** in ** ***) *** so ***** ** **** little ********* ********* *** new *******. *********, ** or *** ******** ***** the ***** *** ** it ** *** ******** to ************* *********. *******, the ****-*** ** ******* much ******* **** *** parent *******, *** **********, institutional ********* *** ********** **** ****** shares ** *** ****-***. Let ** *******. ** a ***** *** ****** fund ******* **** * large *** ******* ***** distributes * ***** *** spin-off, **** ****** **** manager’s ********** ******* ******** the ******* **** ******* the ****-***. *** ***** reasons, **** ********* **** their ****** ** *** spin-off ********** ** ***** or ********** *****.

******, **** ********** ******* a *** ******** ***** price:

*** ********** **** ** the *** ****-*** *** very ****** ********* ** promote *** ******* *********. In ****, *** ********** team ** ************ ** *** ******* the *****. ***? ******* management ***** ******* *** usually ****** ***** ** the ***** ****** ***** of *******. *** ***** the ***** ****** *********, the ******* ***** ********* the ******* ****.

********

******,* **-**** ********************* & **. ***** *** **** **** *** stock ***** **** **** **** 12-18 ****** ** $** (or ** ********* ********* of $*.* *******):

*** ****** ******** *** forecast, ******** **** * shift ****** ****** ****** products *** *** **** win *** ***:

**** ****** ****** *** categories, *** * ******** mix ***** ****** ******-****** Products ******** *** ********* revenues, ** ***** **** is ** *********** ********** opportunity. *** ** ** spun *** **** ****** Honeywell, ******* ** ******* on *** ************ ******* and ****** ******* ****** shares ** ********, ******* & **** *** ************. Its ***** *** *** line ****** *** ********* from *** ***** ****** “connected” *******, *** ******** could ***** ************. *** spin-off ** *** *** October **. ** ******** coverage **** ** ********** and $** ***** ******.

Bear ****

*************.*** ******* ***** *** **** ****, *********** that ******* *** ** pay ********* ** ** $140 ******* ******** *** the **** ** *****:

******* **** **** ******** to ********* ***** ******** indemnification *** ************* ********** that ******* ****** *********'* related ****** ********* ********, including *** ****** ******** liability **** ****** **** the ********** ** *** legacy ************** ******* ********... Given **** ***** ** no ***** ********* ****** and *** **** **** the ******* ** ** the **** *** *** next ** *****, ***** that ***** ** ******* visibility ********* *** ********* future **** ******, ****** it **** **** ********* to ********* ** ***** intrinsic *****. ***** *** maximum ********* **** *** company *** *** ** any ***** **** ** $140 *******, ** ** unclear ** **** *** magnitude ** ***** ******** will **.

**** ******** **** ***** $1.2 ******* **** *** risk **** ******** ******** could **** ** * recession:

********, ***** **** *** company ******* **** ** will ***** **** * limited ****** ** **** and *** ***** *** $1.2 ******* ******* ** loans ** **** *** financing *****, ** ***** that **** ******* ******** is *********. ** * prospective ********, *** ****** that ******* ************ ***** face ****** *********** ** over $*** ******* **** its ****** *********** *** interest ******** ******** ***** me ******* **** *** company ***** **** ** face ******* ******* ** there ** **** * sharp ******** ********. **** risk ******* ************ ********* when *** ******* **** the ******** ******** **** the ******* ****** **** is ******* *************.

Challenges ** ***** ******

***** ****** ***** ** magnify **** *** *** cycles *** *********, ********* to **** ******* **** Honovich:

***** ******* ** * small **** ** * publicly ****** ******* (** Resideo ********** ***) *** the ********* ** ******** information ***** * *******’* performance *** ********. **** things *** ***** ****, employees *** ***** *** brag ***, *** **** side ** **** **** do ***, ******** *** find ***. ********, *.*., lived ******* **** ***** of ****. ******* ** very ******* ****** *** good *** *** ** this.

******,*********'* *** **** ******* * ****** **** picked ***** ******** ** Canon **** ***** ******, noting:

[*****] ******, *** ********** would ** ****** ************, and **’* ********** ** under ******** ** ***********. To ** ******* ******, it ****’* ********* * was ******* ******* **.

******* ** *** ******* is ******* ******* ** this, **** *** ****. And *** **** **** is **** **** **** low ***** *****, **** do **** *** ********* to ****.

Poll / ****

Comments (20)

***, **** ****.

***, ***, **'* **** again *****, *** ***** $21:

$**, ** * *** a ***** ** ***********, or * ***** ** Resideo? ***** ****. *'** probably **** *** * few ***** ***** **** my *****, ****** ** yield * ****** ***, depending ** **** *** free **** *** ** the ***** **** **** week.

****** ****. * ****. It's **** ** * slide. ** **** ** interesting ** *** ** they *** ******** ********** ******** ******** *********** ** the ************ *****. 

***** *** *** *** their *** ***** ** one ** ***** ***** sales...

**** ******* ***. ****’* why *** ***** ***** going ****. 😂😂

**** ** **** *****!!!  Funny, *** *****.

*******'* ******** **** * have **** ** ***** Home ** ********* ****. As **** ********* ***** the **** *******, ********** is ******** ****** ***********. How ** ************* ** the ********** ***** **** about ****? *** **** to *** ******** ****, the *************' ** ********** systems *** *** ** seeing *** "****" *** of ***. *** *** Expo's **** *** ** miss **** **** **** more ******* ** ** a ****.  *** **** WhiteBox ***** ** ****** as * ********** ** other *************' ** *******, monitors, ***. ***'* ********* now ** ***** ************? I **** ***** ********** is ** ****** ** ADI.  * **** ********* don't *** **** *********** but **** *** ** be ********* ** **** sales. ** ** *** growing ** ***** ***** that ** ***** ** for **** ***** ** video, ******, ***. ** there *** * ******** Confidence ***** ** *************' Confidence ***** *** ***, what ***** ** **** like?

* ******* **** ************* on *** ******** ******, is **** ** **** where *** *** "**** VC *****" ****. ******* will **** *** *** of *****-********** ********* *** a **** ****.

* *** *** **** Nest ********** ** ******* coming *****, **** ****** software, ******** *********, *** the ******* ** **** to * ******* ****** at *****-**** ******* ** a ****, ********** ****** their ***** ** *** residential ****.

**********: *** ****** **** be **** *** ** a ****.

*** **** *** **** is * ********. ***** all **'* *** *** Honeywell. *** **** ******* I ***** *** ** worse **** ***** *** is *******.

**** ****** ** ******** in *** ***** ***** as **** ** **** in ********:

** ******* ** ************.****** **** *********** ****** to *** ***** *** Resideo ****** *** ** ********* as ** ***, ******** **** the **** *** ** attributed *** *******. *****, that ***** ********* *** being ******** ** ****:

****-**** *** *********** ** investors (*** **** **** in ** ***) *** so ***** ** **** little ********* ********* *** new *******. *********, ** or *** ******** ***** the ***** *** ** it ** *** ******** to ************* *********. *******, the ****-*** ** ******* much ******* **** *** parent *******, *** **********, institutional ********* *** ********** **** ****** shares ** *** ****-***. Let ** *******. ** a ***** *** ****** fund ******* **** * large *** ******* ***** distributes * ***** *** spin-off, **** ****** **** manager’s ********** ******* ******** the ******* **** ******* the ****-***. *** ***** reasons, **** ********* **** their ****** ** *** spin-off ********** ** ***** or ********** *****.

******, **** ********** ******* a *** ******** ***** price:

*** ********** **** ** the *** ****-*** *** very ****** ********* ** promote *** ******* *********. In ****, *** ********** team ** ************ ** *** ******* the *****. ***? ******* management ***** ******* *** usually ****** ***** ** the ***** ****** ***** of *******. *** ***** the ***** ****** *********, the ******* ***** ********* the ******* ****.

******* ***** ***** ****, a ***** *****, *** despite * **** ** the ***** **** ** November, ***** ** ***** $21:

******* **** *% ******* for ***** *** ********* brand, ***** *** ******* annual ******* ** $** million, *** *** *****, CFO, ** ******** ******* investor **********.

******* ** ***** $***??? ($30M ** *% ** $3BN).

*** *********** #*, **** valuation ** **** ** determined ** *** ********* in *** ******** *****:

*********

*** *******'* ****** ********* is *** ~$*.* ******* USD (*** ******* ****** x ~$** *** *****) compared ** ******* ** ~$4.5 *******. ** ** low ******** ** *****.

***** **** ************ / half *********** ******* ***** valuation *** **** **** that, ** ** *** low.

************ **** ** *** significantly ***** ********** ******** to ***** ***** ***** those ********** ******** ***** income ******** ** ***** than *************. *** *******, Anixter **** ****** ~$ 8 ******* ** ******* but **** *** * public ****** ************** ** ~$2 *******. ** * similar *****, *** *** side ** *******'* ******** would ***** ** ~$*** million.

*** ********* **** **** of *** ******** ** significantly **** ********** **** the *** ****, **** though ***** *** ******** less *******. *************, **** with ****** ****** ***** like ********* ***** **** to ***** ** ** revenue ** ******.

********, **** ***** ************** put ******* ** * $3.2 ******* *********.

*****, *** ****'** ****** the *% ** *******, not *********. * *** assuming *** ********* *** a ****** *** ** future-looking ****/***** ** **, but **** **** ****'** basically ****** ** **. Guess * *******'* ** too *********, *** ****** considered.

******* ************** ** ********** *** the ***** **** **%:

***** * ******* *****? Place **** ****!

**** ******* **** *** past * ******:

******: ******* ***** *** plunged **********, **** ~**% to ~$** ***:

*** ******* '*** **********' *******************-********** ************* ***** *********** ********.

********* ** ***** *******, looks **** *** ** fine *** *** ***** business ***** **** ********:

** *** ***** *******, the *** ****** ************ business ********* ** **** as *******. *** ******** & ********* ******* *********** revenue ******* ** ******* product ******** ** *** Comfort ******** *** ** its *********** ******* ********* (RTS) *** ********** ********. We ******* *** *** slowdown *** ****** ** certain ****** ********** ******* and * ******* ******** across ***** *** ********* in *** ******.

***** *** ****** "***", some ****** ***** ** a *** ****** ****.....~$**.** now ***** ** >**%...

Login to read this IPVM report.

Related Reports

ADI Sales Down 21% in April on May 14, 2020
ADI sales were down 21% in April, the company disclosed, as the pandemic hits...
Dahua Revenue Plunges, 3 Execs Resign Q1 2020 on Apr 29, 2020
Dahua's sales dropped by 19.47% in the first quarter of 2020 amid the...
ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
Infinova, March Networks and Swann H1 2020 Financials Examined on Sep 02, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Convergint Outlook Turns Negative on Apr 16, 2020
Convergint's outlook has turned negative, according to bond rater Moody's,...
Pivot3 Mass Layoffs on Mar 27, 2020
Pivot3 has conducted mass layoffs, the culmination of grand hopes, a quarter...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business...
ADI Returns To Growth, Back To 'Pre-COVID Levels' on Aug 05, 2020
While ADI was hit hard in April, with revenue declining 21%, the company's...
Dahua Taunts Australian Government, Continues To Sell Illegal Fever Cameras on Aug 10, 2020
Dahua is effectively taunting the Australian government by continuing to sell...
Fever Camera Sales From Integrators Surveyed on Jun 01, 2020
Fever cameras are the hottest trend in video surveillance currently but how...
Axis Compares Fever Camera Sellers to 9/11 on Sep 18, 2020
Axis Communications, the West's largest surveillance camera manufacturer, has...
Bottom: Integrators Start To Stand Vs Coronavirus on Apr 20, 2020
Good news - IPVM integrator statistics show that while coronavirus has hit...
2020 Mid Year Video Surveillance Industry Guide on Jul 27, 2020
The first half of 2020 has been shocking, for the world generally, and for...
Dahua Profits Surge Due To Fever Camera Sales on Aug 25, 2020
While Dahua's overall revenue is down, driven by challenges within China, the...

Recent Reports

FLIR CEO: Many New Fever Entrants "Making Claims That The Science Just Won't Support" on Sep 22, 2020
FLIR's CEO joins a growing number calling out risks with fever / screening...
China Bems Temperature Measurement Terminal Tested on Sep 22, 2020
Guangzhou Bems (brand Benshi) is the manufacturer behind temperature...
Axis Exports To China Police Criticized By Amnesty International on Sep 21, 2020
Axis Communications and other EU surveillance providers are under fire from...
Milestone XProtect on AWS Tested on Sep 21, 2020
Milestone finally launched multiple cloud solutions in 2020, taking a...
Mobile Access Control Usage Statistics 2020 on Sep 21, 2020
Most smartphones can be used as access control credentials, but how...
Axis Compares Fever Camera Sellers to 9/11 on Sep 18, 2020
Axis Communications, the West's largest surveillance camera manufacturer, has...
Avigilon Elevated Temperature Detection Camera Tested on Sep 17, 2020
Avigilon has entered the temperature screening market with the release of...
Chilean Official Investigated for Motorola And Hikvision Contracts on Sep 17, 2020
A corruption investigation is underway in Chile after a crime prevention...
Huawei HiSilicon Production Shut Down on Sep 17, 2020
Huawei HiSilicon chips are no longer being manufactured or supplied to...
Virtual ISC West and GSX+ Exhibiting Contrasted on Sep 17, 2020
Both ISC West and ASIS GSX are going virtual this year, just weeks apart, but...
X.Labs Sues FLIR on Sep 16, 2020
X.Labs, the maker of Feevr, has sued FLIR, the publicly traded thermal...
Video Surveillance 101 September Course - Last Chance on Sep 16, 2020
Today is the last chance to sign up for the Fall Video Surveillance 101...
No Blackbody Mistake, Half Million Dollar, Hikvision Fever Camera System in Georgia on Sep 16, 2020
A Georgia school district touted buying Hikvision fever screening "about...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
Startup Cawamo Presents Live Alerts With Edge AI and Cloud VMS on Sep 15, 2020
Cawamo, an Israeli edge-to-cloud analytics and VMS startup, presented its...