Resideo IPOs, Then Plunges

Published Oct 31, 2018 13:49 PM

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 ******** **** *******

*** ******* ******* *** ********* ** October **** *** **** *** ********* year, *** ******* ******** *** *** first******* ******** ********** **** ** *** York **** ** ******* **, ****, **** ***** *** *** ***** expressing ********** **** *** ******* ***** launch, **** *** *** ****** ***** for ************:

***** ***, **'** ******* ** *** the **** ******** ****. ****'* ********* number *. ***** ***, **'* ***** getting *** ** *** ***** *** being ******. **** ** *** * start ** ******* ****'* ****** ** figure *** *** ** *** *** products **** ** ***********. ** **** a ****** ******* ***** *** **** cash ****. ** **** **** **** top *** ****** *****. *’* ********* with *** **** **’** *** ********. We’re ****-********** ** ***** *********** ****** into *** ******.

** *** ******** ****, ******* ****** footage ** ******* ***** ******* *** opening **** ** *** *** **** Stock ******** ** ******* ****, ********** with *** ***:

Resideo's ***

*** ***** ***** "****-****** *******" ** ******* ** ** $** and ** **** *** *** **** 2 ***** ** **** ********** **** regular ******* ** ~$**, * **** of ***** **%:

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

*******'* ***** *** * ****** ******* over *** ***** *** **** ** trading *** ******** ********* ***** $**:

*********

*** *******'* ****** ********* ** *** ~$2.7 ******* *** (*** ******* ****** x ~$** *** *****) ******** ** revenue ** ~$*.* *******. ** ** low ******** ** *****.

***** **** ************ / **** *********** ******* their ********* *** **** **** ****, it ** *** ***.

************ **** ** *** ************* ***** valuations ******** ** ***** ***** ***** those businesses ******** ***** ****** ******** ** sales **** *************. *** *******, ******* does ****** ~$ * ******* ** revenue *** **** *** * ****** market ************** ** ~$* *******. ** a ******* *****, *** *** **** of *******'* ******** ***** ***** ** ~$*** million.

*** ********* **** **** ** *** business ** ************* **** ********** **** the *** ****, **** ****** ***** has ******** **** *******. *************, **** with ****** ****** ***** **** ********* Homes **** ** ***** ** ** revenue ** ******.

********, **** ***** ************** *** ******* at * $*.* ******* *********.

Analyst *****

** ******* ** ************.*** *** **** interesting ****** ** *** ***** *** Resideo *** [**** ** ****** *********] and *** ** ********* ** ** did, claiming **** *** **** *** ** attributed *** *******. *****, **** ***** investors *** ***** ******** ** ****:

****-**** *** *********** ** ********* (*** sold **** ** ** ***) *** so ***** ** **** ****** ********* regarding *** *** *******. *********, ** or *** ******** ***** *** ***** and ** ** ** *** ******** to ************* *********. *******, *** ****-*** is ******* **** ******* **** *** parent *******, *** **********, ************* ********* are prohibited from ****** ****** ** *** ****-***. Let ** *******. ** * ***** cap ****** **** ******* **** * large *** ******* ***** *********** * small *** ****-***, **** ****** **** manager’s ********** ******* ******** *** ******* from ******* *** ****-***. *** ***** reasons, **** ********* **** ***** ****** in *** ****-*** ********** ** ***** or ********** *****.

******, **** ********** ******* * *** starting ***** *****:

*** ********** **** ** *** *** spin-off *** **** ****** ********* ** promote *** ******* *********. ** ****, the ********** **** ** ************ ** *** ******* the *****. ***? ******* ********** ***** options *** ******* ****** ***** ** the ***** ****** ***** ** *******. The ***** *** ***** ****** *********, the ******* ***** ********* *** ******* have.

********

******,* **-**** ********************* & **. ***** *** **** **** *** ***** ***** will **** **** **-** ****** ** $** (or ** ********* ********* ** $*.* billion):

*** ****** ******** *** ********, ******** that * ***** ****** ****** ****** products *** *** **** *** *** day:

**** ****** ****** *** **********, *** a ******** *** ***** ****** ******-****** Products ******** *** ********* ********, ** think **** ** ** *********** ********** opportunity. *** ** ** **** *** from ****** *********, ******* ** ******* on *** ************ ******* *** ****** leading ****** ****** ** ********, ******* & **** *** ************. *** ***** MSD *** **** ****** *** ********* from *** ***** ****** “*********” *******, and ******** ***** ***** ************. *** spin-off ** *** *** ******* **. We ******** ******** **** ** ********** and $** ***** ******.

Bear ****

*************.*** ******* ***** *** **** ****, *********** **** ******* has ** *** ********* ** ** $140 ******* ******** *** *** **** 25 *****:

******* **** **** ******** ** ********* under ******** *************** *** ************* ********** that ******* ****** *********'* ******* ****** liability ********, ********* *** ****** ******** liability **** ****** **** *** ********** of *** ****** ************** ******* ********... Given **** ***** ** ** ***** liability ****** *** *** **** **** the ******* ** ** *** **** for *** **** ** *****, ***** that ***** ** ******* ********** ********* the ********* ****** **** ******, ****** it **** **** ********* ** ********* an ***** ********* *****. ***** *** maximum ********* **** *** ******* *** pay ** *** ***** **** ** $140 *******, ** ** ******* ** what *** ********* ** ***** ******** will **.

**** ******** **** ***** $*.* ******* debt *** **** **** ******** ******** could **** ** * *********:

********, ***** **** *** ******* ******* like ** **** ***** **** * limited ****** ** **** *** *** taken *** $*.* ******* ******* ** loans ** **** *** ********* *****, it ***** **** **** ******* ******** is *********. ** * *********** ********, the ****** **** ******* ************ ***** face ****** *********** ** **** $*** million **** *** ****** *********** *** interest ******** ******** ***** ** ******* that *** ******* ***** **** ** face ******* ******* ** ***** ** ever * ***** ******** ********. **** risk ******* ************ ********* **** *** analyze **** *** ******** ******** **** the ******* ****** **** ** ******* discretionary.

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

***** ****** ***** ** ******* **** and *** ****** *** *********, ********* to **** ******* **** ********:

***** ******* ** * ***** **** of * ******** ****** ******* (** Resideo ********** ***) *** *** ********* of ******** *********** ***** * *******’* performance *** ********. **** ****** *** going ****, ********* *** ***** *** brag ***, *** **** **** ** when **** ** ***, ******** *** find ***. ********, *.*., ***** ******* both ***** ** ****. ******* ** very ******* ****** *** **** *** bad ** ****.

******,*********'* *** **** ******* * ****** **** ****** ***** acquired ** ***** **** ***** ******, noting:

[*****] ******, *** ********** ***** ** raised ************, *** **’* ********** ** under ******** ** ***********. ** ** totally ******, ** ****’* ********* * was ******* ******* **.

******* ** *** ******* ** ******* forward ** ****, **** *** ****. And *** **** **** ** **** with **** *** ***** *****, **** do **** *** ********* ** ****.

Poll / ****

Comments (20)
JH
John Honovich
Oct 31, 2018
IPVM

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

***, ***, **'* **** ***** *****, now ***** $**:

(1)
U
Undisclosed #1
Oct 31, 2018

$**, ** * *** * ***** of ***********, ** * ***** ** Resideo? ***** ****. *'** ******** **** get * *** ***** ***** **** my *****, ****** ** ***** * better ***, ********* ** **** *** free **** *** ** *** ***** Meal **** ****.

(9)
Avatar
Dan Gelinas
Oct 31, 2018
IPVM

****** ****. * ****. **'* **** on * *****. ** **** ** interesting ** *** ** **** *** overcome ********** ******** ******** *********** ** *** ************ story. 

JH
John Honovich
Oct 31, 2018
IPVM

***** *** *** *** ***** *** stock ** *** ** ***** ***** sales...

(2)
(14)
Avatar
John Bazyk
Oct 31, 2018
Command Corporation • IPVMU Certified

**** ******* ***. ****’* *** *** price ***** ***** ****. 😂😂

(8)
Avatar
Ross Vander Klok
Oct 31, 2018
IPVMU Certified

**** ** **** *****!!!  *****, *** cruel.

(1)
U
Undisclosed #2
Oct 31, 2018

*******'* ******** **** * **** **** is ***** **** ** ********* ****. As **** ********* ***** *** **** Resideo, ********** ** ******** ****** ***********. How ** ************* ** *** ********** space **** ***** ****? *** **** to *** ******** ****, *** *************' of ********** ******* *** *** ** seeing *** "****" *** ** ***. The *** ****'* **** *** ** miss **** **** **** **** ******* to ** * ****.  *** **** WhiteBox ***** ** ****** ** * competitor ** ***** *************' ** *******, monitors, ***. ***'* ********* *** ** other ************? * **** ***** ********** is ** ****** ** ***.  * know ********* ***'* *** **** *********** but **** *** ** ** ********* in **** *****. ** ** *** growing ** ***** ***** **** ** makes ** *** **** ***** ** video, ******, ***. ** ***** *** a ******** ********** ***** ** *************' Confidence ***** *** ***, **** ***** it **** ****?

(1)
UM
Undisclosed Manufacturer #3
Nov 01, 2018

* ******* **** ************* ** *** consumer ******, ** **** ** **** where *** *** "**** ** *****" goes. ******* **** **** *** *** of *****-********** ********* *** * **** time.

* *** *** **** **** ********** or ******* ****** *****, **** ****** software, ******** *********, *** *** ******* to **** ** * ******* ****** at *****-**** ******* ** * ****, completely ****** ***** ***** ** *** residential ****.

**********: *** ****** **** ** **** off ** * ****.

UI
Undisclosed Integrator #4
Nov 01, 2018

*** **** *** **** ** * surprise. ***** *** **'* *** *** Honeywell. *** **** ******* * ***** say ** ***** **** ***** *** is *******.

Avatar
Dan Gelinas
Nov 01, 2018
IPVM

**** ****** ** ******** ** *** story ***** ** **** ** **** in ********:

** ******* ** ************.****** **** *********** ****** ** *** about *** ******* ****** *** ** ********* ** ** did, claiming **** *** **** *** ** attributed *** *******. *****, **** ***** investors *** ***** ******** ** ****:

****-**** *** *********** ** ********* (*** sold **** ** ** ***) *** so ***** ** **** ****** ********* regarding *** *** *******. *********, ** or *** ******** ***** *** ***** and ** ** ** *** ******** to ************* *********. *******, *** ****-*** is ******* **** ******* **** *** parent *******, *** **********, ************* ********* are prohibited from ****** ****** ** *** ****-***. Let ** *******. ** * ***** cap ****** **** ******* **** * large *** ******* ***** *********** * small *** ****-***, **** ****** **** manager’s ********** ******* ******** *** ******* from ******* *** ****-***. *** ***** reasons, **** ********* **** ***** ****** in *** ****-*** ********** ** ***** or ********** *****.

******, **** ********** ******* * *** starting ***** *****:

*** ********** **** ** *** *** spin-off *** **** ****** ********* ** promote *** ******* *********. ** ****, the ********** **** ** ************ ** *** ******* the *****. ***? ******* ********** ***** options *** ******* ****** ***** ** the ***** ****** ***** ** *******. The ***** *** ***** ****** *********, the ******* ***** ********* *** ******* have.

JH
John Honovich
Nov 30, 2018
IPVM

******* ***** ***** ****, * ***** later, *** ******* * **** ** the ***** **** ** ********, ***** is ***** $**:

JH
John Honovich
Dec 12, 2018
IPVM

******* **** *% ******* *** ***** the ********* *****, ***** *** ******* annual ******* ** $** *******, *** Joe *****, ***, ** ******** ******* investor **********.

U
Undisclosed #1
Dec 12, 2018

******* ** ***** $***??? ($*** ** 1% ** $***).

Avatar
Dan Gelinas
Dec 12, 2018
IPVM

*** *********** #*, **** ********* ** what ** ********** ** *** ********* in *** ******** *****:

*********

*** *******'* ****** ********* ** *** ~$2.7 ******* *** (*** ******* ****** x ~$** *** *****) ******** ** revenue ** ~$*.* *******. ** ** low ******** ** *****.

***** **** ************ / **** *********** impacts ***** ********* *** **** **** that, ** ** *** ***.

************ **** ** *** ************* ***** valuations ******** ** ***** ***** ***** those ********** ******** ***** ****** ******** to ***** **** *************. *** *******, Anixter **** ****** ~$ * ******* in ******* *** **** *** * public ****** ************** ** ~$* *******. At * ******* *****, *** *** side ** *******'* ******** ***** ***** at ~$*** *******.

*** ********* **** **** ** *** business ** ************* **** ********** **** the *** ****, **** ****** ***** has ******** **** *******. *************, **** with ****** ****** ***** **** ********* Homes **** ** ***** ** ** revenue ** ******.

********, **** ***** ************** *** ******* at * $*.* ******* *********.

U
Undisclosed #1
Dec 12, 2018

*****, *** ****'** ****** *** *% on *******, *** *********. * *** assuming *** ********* *** * ****** bit ** ******-******* ****/***** ** **, but **** **** ****'** ********* ****** at **. ***** * *******'* ** too *********, *** ****** **********.

JH
John Honovich
Mar 07, 2019
IPVM

******* ************** ** ********** *** *** ***** drop **%:

UM
Undisclosed Manufacturer #5
Mar 07, 2019

***** * ******* *****? ***** **** bets!

JH
John Honovich
Sep 21, 2019
IPVM

**** ******* **** *** **** * months:

JH
John Honovich
Oct 22, 2019
IPVM

******: ******* ***** *** ******* **********, down ~**% ** ~$** ***:

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

********* ** ***** *******, ***** **** ADI ** **** *** *** ***** business ***** **** ********:

** *** ***** *******, *** *** Global ************ ******** ********* ** **** as *******. *** ******** & ********* segment *********** ******* ******* ** ******* product ******** ** *** ******* ******** and ** *** *********** ******* ********* (RTS) *** ********** ********. ** ******* the *** ******** *** ****** ** certain ****** ********** ******* *** * general ******** ****** ***** *** ********* in *** ******.

(1)
UM
Undisclosed Manufacturer #6
Dec 30, 2019

***** *** ****** "***", **** ****** gains ** * *** ****** ****.....~$**.** now ***** ** >**%...