After 90% jump, Fiverr slips below IPO price

Micha Kaufman

The 180-day vesting period for shares in Fiverr ends today.

The 180-day vesting period for shares in Israel technology company Fiverr International Ltd. (NYSE: FVRR) ends today, and it appears that the market is afraid that owners of those shares will sell them. The company, cofounded and managed by CEO Micha Kaufman, held its IPO on the New York Stock Exchange last June at $21 per share, higher than price range that the company was aiming at. On the first day of trading in the share, Fiverr's share price soared 90% to $39.90, its highest price to date. The share price has since receded, and is at $20.20 today, is slightly lower than the price in Fiverr's IPO, after having lost ground in the past few days. Fiverr's market cap is $643 million.

Fiverr has developed an ecommerce platform that enables freelancers to offer their services to potential customers. In line with the usual practice, the prospectus issued for Fiverr's offering contained a clause in which the company's principal shareholders and managers undertook to refrain from selling shares for 180 days, a period that ends today. Fiverr's largest shareholders are Jonathan Kolber, Bessemer Venture Partners, Accel London, SquarePeg Group, and others, while Kaufman holds 7.5% of the company's shares. Another shareholder is Shai Wininger, who founded the company with Kaufman in 2010 and left it in 2014 to found insurance startup Lemonade.

The fall in the share price ostensibly makes it less likely that shareholders will seek to sell their holdings now. Keep in mind, however, that the investors in question invested in the company before the IPO at values lower than the current share price, so that selling now will still give them a positive return on their investment.

Fiverr's revenue in the first nine months of 2019 was 41.5% more than in the corresponding period last year. The company's net loss attributable to shareholders was down 11.4% to $26.7 million in this period. Excluding various accounting items, including stock-based compensation for employees, costs related to the IPO, and write-downs on intangible assets, Fiverr's non-GAAP net loss in January-September 2019 totaled $14.1 million, down from $16.7 million in the first nine months of 2018. Fiverr's take rate, which expresses the fee that Fiverr gets on every transaction between a freelancer and a buyer (its total net revenue from fees) was 26.6% in the year ending in September, compared with 25.2% in the preceding year.

Following the publication of Fiverr's results, Oppenheimer wrote that it was "very bullish" about the share in the long term, and retained its "Buy" recommendation for it with a $32 target price, 58% above the market price.

Published by Globes, Israel business news - en.globes.co.il - on December 10, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Micha Kaufman
Micha Kaufman
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