Sonos Founder Looking To Pocket Millions Despite Lying Over Revenues
Sonos founder John McFarlane who quite the Company claiming that he had “missed” the move to voice activated speakers is hoping to pocket in excess of A$36 million from the float of the US speaker Company despite fututure proofing Sonos and lying about revenues in the past.
Facing an uphill battle up against Apple, Google and Amazon Echo speakers the US Company is hoping to raise $366 million in an IPO money that will be used to pay out early investors including their largest investor KKR & Co., which owned an almost 26 percent stake as of June 30, according to a recent filing. Its next largest holders are Index Ventures, which owns about 13 percent, and Sonos co-founder John MacFarlane, who owns about 10 percent.
Currently the Company is trying to convince consumers that their new Beam sound bar, despite the small size is the latest in TV attach sound technology despite it not being able to play 24-bit audio found on 4K ultra High Definition movie content.
Specialist dealers have told ChannelNews that the Sonos brand brings customers in with many using the brand to upsell to either a more expensive or superior sound system.
Will Stevenson at Camberwell Sight & Sound Gallery in Melbourne said that he had recently sold a Devialet speaker to “a couple who came in looking for a Sonos sound system”.
Sonos is trying to sell 13.9 million shares at a price of $17 to $19 a share, it said in a regulatory filing overnight in the USA. The underwriters have been given the right to buy an additional 2.08 million shares to cover any over-allotment.
The total market valuation of Sonos at $19 a share would be $1.87 billion, or $2.2 billion on a fully diluted basis. Sonos was targeting a valuation of $2.5 billion to $3 billion in the IPO, people familiar with the matter said in April.
The company and has been led by Patrick Spence for the past 18 months since McFarlane who also failed to futureproof the Sonos Sound system to play 24-bit audio quit. He is also the executive who lied about the revenues of the Company. In 2015 he claimed that the Company had revenues of $1Billion US when in reality the revenues were significantly lower.
Sonos who recently laid off 96 staff has also failed to deliver a profit for the past 12 years despite having the networked sound market to themselves.
Now they are facing stiff competition.
Sonos introduced its first home-audio system in 2005. In fiscal 2017, the company posted a net loss of $14.2 million on revenue of $992.5 million, down from a net loss of $38.2 million on $901.3 million of revenue in the previous financial year, according to a filing.
Sonos posted revenues of $655.7 million in the six months ended March 31, 2018. The company also swung to a profit, with net income for the same period reached just $13.1 million which some say was savings from laying off staff worldwide.
Now the Company is having to compete up against Amazon Echo, Apple and Google Assist in the voice-activated speaker market.
Bloomberg said that despite competing with Amazon, Sonos relies heavily on its technology. In its IPO document, Sonos flagged that both these products use Amazon’s Alexa system, and that its current agreement allows the e-commerce giant to disable its digital assistant’s integration with limited notice.
Sonos also uses Amazon Web Services, or AWS, to connect its mobile app to servers and other streaming platforms.
Sonos said it’s working to strike deals with other companies that have developed voice-control technology. Its products now support Apple’s AirPlay 2 wireless music-streaming system, and Google’s Assistant.