A strong IPO setup, but not without some issues
CART aims to secure $594.0 million by offering 22 million shares, with 36% being secondary shares, priced between $26 and $28 each. Cornerstone investors are set to buy shares worth $400 million in this offering, which constitutes 67% of the deal. Gross proceeds to the company are estimated to be $380.7 million and $351.7 (after fees and overallotment). Additionally, PepsiCo has committed to acquiring $175 million in redeemable convertible preferred stock through a simultaneous private transaction. If priced at the midpoint of the proposed range, Instacart's total market value, when fully diluted, would be approximately $8.9 billion, and a pot deal fully diluted EV of $6.3 billion. This implies that the company is valued at Hedgeye estimates of 1.9x 2024 sales and 10.9x 2024 EV/EBITDA. The company anticipates that up to 1% of the shares sold during the IPO will be available to retail investors via platforms like SoFi and Robinhood. There's a strong possibility that the deal size could significantly increase, but the company does not need the cash because it is FCF positive.
VENT DETAILS:
|
As we continue to work dive into the CART IPO, we remind clients that we don't have the opportunity to talk with the underwriters or the company.
Domino’s Updates Its Loyalty Program
Domino’s Pizza is revamping its loyalty program, enabling customers to accumulate points faster and utilize them sooner.
The new system allows:
-
Earning Points: Customers can earn 10 points for every order worth $5 or more, an improvement from the previous 10 points for $10 or more.
-
Early Redemptions: After accumulating 20 points, customers can redeem them for items like parmesan bread bites, a 20-ounce drink, or a dipping cup.
-
Exclusive Offers: Loyalty members will gain access to special deals and additional opportunities to earn bonus points.
This change by Domino’s comes as several fast-food brands are rethinking their loyalty programs, seeing them as essential marketing strategies. Such programs have gained prominence, especially with the increasing shift towards mobile app orders. Members of these programs tend to frequent these restaurants more and spend higher amounts. Other brands like McDonald’s have also integrated their marketing with loyalty programs. Starbucks is forming partnerships with other industries to benefit its loyalty members. Domino’s has maintained its "Piece of the Pie" rewards program for years, and this is the first significant modification since 2017.
Dave George's Legacy, Starboard's Activism, and the Need for Change at Bloomin
Starboard Value, has recently hired Dave George, former COO of Darden Restaurants, to assist in their endeavor to reshape BLMN.
SUMMARY:
- Dave George's Tenure at Darden: Dave George had a 17-year tenure at Darden, serving as president for Olive Garden and LongHorn Steakhouse, and later as COO. He retired in 2020 and is known for his "simplicity" approach at DRI.
- Starboard's Activism: Dave was present at Darden during Starboard's activist movement in 2014, which resulted in a complete board overhaul. Starboard now holds nearly 10% of Bloomin' and is pushing for significant changes at BLMN.
- Performance Concerns: Starboard believes BLMN's performance is not on par with major competitors in the casual dining sector. Although BLMN's stock has underperformed compared to BLMN and TXRH, its EBIT margin recovery has surpassed both DRI and TXRH since the pandemic.
- Major Changes are Needed: The market has not recognized BLMN's operational improvements, indicating the only real hope for BLMN are major changes in executive leadership team.
