Funko's Dive: Funko Watch: Days 1-2
Yesterday, November 2, 2017, was the day that the company, Funko, went public. Today was the first day of active trading. As expected, approximately 9.7 million hands traded shares as Funko sold an astonishing 10.4 million shares, totaling about $125 million, short of the 13.3 million shares necessary for their goal to pay off the debt of $339 million.
While I feel hopeful that the company will rebound. If you have not invested in the company's stock as of now, use caution. Just yesterday, as soon as Funko’s stock went public at a high of $14.91, the company’s stock in less than 24 hours declined approximately 40% to a selling price of $7.07. Friday was a little worse as prices slid to a $7.00 even close.
Now what does this mean?
For the Funko Buyer/Collectors:
As a Funko collector, I would be a little concerned. Remember, as stated before, the company has amassed a lot of debt and has to find ways to pay it off. This payoff was based on the company going public to the consumers, meaning you. In summation, they didn’t meet their goal. This is similar to the average person getting their refund check from their end of year taxes to pay off an enormous credit card bill only to find out they didn’t have enough. Where are they going to get the money now?
Some solutions to the problem are to cut costs. This can be done in a few ways:
- Fire staff to save money.
- Raise the prices of the products they sell.
- Cut certain lines that aren’t doing well.
- Sell some of its division lines to offset the debt
How does this affect the consumer (Collector/Buyer)? We know what some of the lines Funko sells suck. For newbie to veteran collectors, I would recommend to slow down on the collecting. Don’t give it up just yet though. So far, the stock hasn’t risen to the expectations that everyone has expected and that is okay. Even though this is Day 2, some things you must realize are this:
- The stock has yet to show us what it is truly made off. Two days is nothing in the long scheme of things.
- Other companies have also fallen and came back from near death experiences. For example, Priceline.com
- Other companies have risen only to disappear into the abyss.
In summation, as a collector though, I would strongly recommend that you be careful. If the company nosedives, your "Funkos" are worthless. Your Chase, that you stood in line for, for 2 days will be worthless.
For the Funko Buyer/Seller/Trader
If you’re part of the underground market of buying and selling Funko items, start tallying up your Chases in your inventory, find your biggest and most needed Funko items and sell them ASAP!!! Find out what is considered to be the biggest most needed items and sell them now!!! Discount it if you have too. For the items that aren’t selling, sell them at a very, very, VERY reasonable price and get them off your books now!!!
If you are not going to do that, then wait till the market opens on Monday, November 6th, 2017. If the price doesn’t increase by at least $1.10 and/or if it decreases by at least $0.50, I recommend you sell your shyt!!!
The Future of Funko
Funko wanted to go public so that it could raise cash to pay off their debt. Their one shot to pay off this debt was to go public by having the public support them. They failed to meet their mark. The company now owes $339 million dollars, but only raised $125 million.
They still need to get more money to pay off their debt. Perhaps when they get their tax return at the end of the year, it can help.