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Thursday, Mar 30, 2023

Wang Looks to Take Vizio Public Again

William Wang and his TV maker Vizio Holding Corp. want investors tuned in, as he looks to take one of Orange County’s best-known companies public amid an ambitious plan to make the full leap from consumer electronics to media lifestyle firm.

The Irvine-based company last week filed plans for an initial public offering to trade on the New York Stock Exchange under the ticker VZIO. Details on the number of shares to be offered and at what price range were not disclosed outside of a placeholder $100 million figure.

The move would make Vizio’s IPO one of the largest for an OC media firm in recent years. Wang, Vizio’s founder, chairman and CEO, would hold more than 50% voting power in the public company, regulatory filings indicate.

This is Vizio’s second attempt at an IPO, following its first in 2015, planned just before it accepted a $2 billion sale of the company to China-based electronics and software conglomerate LeEco. That deal was thrown out in 2017 due to what were cited as “regulatory headwinds.”

2020 Sales Up 11%

It took Wang surviving a plane crash on his way home to Los Angeles from Taiwan to spur the idea for the company and another roughly two decades to get Vizio to this point, crafting a TV screen and speaker brand at value pricing to “democratize the home entertainment experience.”

Last year, the company brought in over $2 billion in revenue. That’s up 11% from the prior year, with 2020 net income totaling $102.5 million, up from $23.1 million in the year prior.

Wang told the Business Journal last year that the company’s sales saw a huge boost after the initial round of stimulus checks mailed out during the pandemic.

“My dream was to make the home everyone’s favorite place,” Wang said in the company’s prospectus filed last week.

“I kicked off this dream by creating Vizio to make home entertainment accessible to everyone. For the next 18 years, working closely with channel partners and suppliers, my team and I have built Vizio into one of the leading entertainment brands in America.”

The company, through CFO Adam Townsend, declined to comment further on the IPO plans, citing the quiet period.

IPOs in Overdrive

Vizio would join a number of companies that have made the leap to go public this year.

Others include Irvine-based digital advertising software maker Viant Technology Inc. (Nasdaq: DSP), which made its debut last month priced at $25 a share with a recent market cap of $2.8 billion.

There’s also the IPO of Foothill Ranch-based mortgage lender loanDepot Inc. (NYSE: LDI), which went to market at $14 a share and has a market cap of $6.5 billion.

Irvine electric automaker Rivian Automotive is rumored to be up for an IPO as early as the fall at a reported $50 billion valuation.

Solid Growth

Vizio, like some companies, ended up thriving last year under the shelter-in-place orders, which brought new meaning to the company’s belief “The TV can be so much more.”

It was in 2020 that consumers turned to streaming services to bide their time, while others sought out larger screens to take Zoom meetings with colleagues.

Vizio, as of Dec. 1, had sold roughly 82.2 million TVs over its history. Sound bars sold since the company’s inception totaled 11.8 million as of Dec. 1.

The device side of the business, which includes TVs and speakers, currently pull in the most revenue for Vizio with distribution at retailers such as Amazon, Best Buy, Target and Walmart. Net revenue for the devices segment totaled $1.9 billion last year, up 6.9% from 2019.

However, the greatest growth opportunity is in the emerging division the company calls its Platform+. 

This would be its SmartCast operating system that allows for streaming of services such as Amazon Prime Video and Apple TV+, and Inscape, which helps advertisers with targeted advertising.

In other words, Vizio not only wants to generate revenue selling TVs, but also make money off the ads consumers see on those screens, as part of what Wang and company see as the next step in TV’s evolution to link viewers across households.

“The TV industry has not been focused on this connection,” Wang wrote in his company’s prospectus for the IPO.

“We want Vizio to be that connection, to be the portal connecting the home to the outside world. We envision the Vizio Smart TV as the center of the connected home—where families all play games together, where friends watch movies together, where work and learning happen and where all things in between take place.”

The Future

Platform+ net revenue spiked 304.4% from 2018 to 2020 to total $147.2 million. Last year alone saw Platform+ net revenue increase 132.9%, driven by growth of SmartCast accounts, which totaled 12.2 million at the end of 2020.

“The TV industry is evolving,” Wang noted.
“When we started, we were simply focused on building the best possible hardware. Now, with the combination of our Smart TVs and our evolving software platform, we have a path to integrate the Vizio experience into a lifestyle.”

To that end, the longer term would spell multiple uses for the company’s TVs, including online shopping, communication via social networks or messaging services, fitness sessions and attending virtual concerts or games, according to Vizio’s regulatory filing.

This is why Wang and Vizio started in 2018 the consortium Project OAR (Open Addressable Ready), a group focused on smarter TV ad spend for networks by providing more data for marketers to better personalize their ads.  

That same year, the company also rolled out free channels on its TVs and its advertising business furthering its goal of monetizing Platform+.

“As a marketer myself, I would love to market towards people who potentially will buy a TV versus somebody who has no interest whatsoever,” Wang told the Business Journal in an interview last summer.

“I don’t want to spend money like a shotgun [approach] anymore. The internet gives you the ability to do that.”

That stance will help as TV ad spend grows. Research firm eMarketer is projecting marketing spend on connected TVs to jump to $11.4 billion this year, up 40% from the prior year. The firm expects that figure to reach $18.3 billion by 2024.

The largest cohort watching those TVs would be millennials, at 56.5 million last year, followed by Generation X (48.5 million) and Gen Z (45.7 million).
It’s plenty of runway as Vizio sees it for the next step in the company’s history.

Wrote Wang last week: “The evolution of TVs is calling for a revolution and Vizio is here to answer it.” 

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