iPic Goes Public with $40 Million IPO
iPic Entertainment Inc. is now public as NASDAQ: IPIC. The company began trading stocks today at $18.50 for a hopeful $40 million market capitalization.
Founder and CEO Hamid Hashemi, who will ring the big bell today, said it was a stressful road to becoming public. And while some of that stress abated when the shares went live at 10:30 a.m. ET, in many ways, it’s the start of a new race for the restaurant and theater concept built around entertainment.
“I can’t tell you how exhausting the process of going public is,” said Hashemi. “You think you get to ring the bell and it’s done, but that’s not the end, you just qualified for the marathon in the Olympics. Now you’re in the real race and you’re in the market with 5,000 public companies and it’s a different arena.”
The iPic IPO marks the second restaurant company to go public under the new Regulation A+ (Reg A) rules after FAT Brands went public back in October. Both had help from BANQ. Read up on BANQ and the new path to being public here, but the new rules allowed Hashemi to lean on his fervent fan base alongside institutional investors.
“The process of doing an IPO under Reg A is very new, we chose this direction again because we wanted to be able to reach out to our membership. They frequently asked how they could invest in it,” said Hashemi. “There are institutional investors here too, as is our existing ownership base: Village Roadshow, PVR, and Regal Cinemas.”
Regal Cinema bought $2.5 million of shares through a private placement, and all other shareholders bought $15.1 million worth of shares before the shares went public.
He said being public radically changes the company. Obviously, there’s the newfound capital, which Hashemi says will go toward new locations and renovations. But it also brings some necessary validation to a company that doesn’t really fit well in the restaurant bucket or the movie theater bucket, and with the addition of live events in 2017, it has another bucket that doesn’t quite fit.
“Our goal has always been to give you the best four-hour night you can imagine—in the theater for traditional pictures or a live event or dining or going to the bar to hang out,” said Hashemi, noting that the 1.8 million members across just 16 locations make up 45% of iPic sales.
That varied offering was hard to categorize and put a number on prior to becoming a public company, and it empowers the brand when it comes to future capital activities.
“When you have a public company, you know the value on any given day whether you're doing a follow-on or a secondary offering or raising debt, people can look and see what the company is worth. When you’re private you just put a number on the table and they put one on the table,” said Hashemi. “It’s like going shopping and knowing how much money you have in your pocket. Now we know what we have.”
There are, of course, public pressures. Hashemi projects it will cost $500,000 to $1 million in expenses to keep up with all the reporting, staffing and fees to be a public entity. But he said working ahead of the transaction to build out a “best of breed” management team was key. The team includes including newly minted COO Sherry Yard and longtime Stifel analyst Paul Westra, who joined on as CFO last March.
Both will help Hashemi stay focused on the company, especially now that the IPO roadshow is complete.
“Personally, I just don’t want it to distract from operations. For me, I’m really focused on the operation and I know it’s going to take a lot of time dealing with all the reporting and all the meetings and all. But my goal is to not let that distract me from managing the company,” said Hashemi.
The company has four locations under construction and another 16 in the pipeline across the country.