As end-user-focused digitalized solutions deliver a more tailored experience to consumers, retailers benefit from potential opportunities to bolster the bottom line. By the same token, expectations on the opposite side of the aisle have also increased exponentially since the end of the analog era and the beginning of the digital age.
A consequence of the mass integration of customer-related innovations is that it’s no longer enough to merely offer a digital platform. For instance, e-commerce as a percentage of total retail sales hit 13.3% in Q2 of this year. By magnitude, this change marks a 17% lift from Q1 2020’s metric of 11.4%. Both the pandemic and organic growth of online transactions have only whetted the appetite for consumer-centric experiences.
Sensing a lucrative prospect to advantage, Silicon Valley startup Enjoy Technology — a specialist in the burgeoning personalized commerce industry — is on the cusp of its initial public offering (IPO). Thanks to its innovative mobile service that brings the retail experience to customers’ homes, Enjoy Technology may literally live up to its brand identity.
When is the Enjoy Technology IPO Date?
Technically speaking, Enjoy Technology will ink its debut on the IPO calendar on Oct. 18, 2021. The company’s shares will trade on the Nasdaq exchange under the ticker symbol ENJY. However, prospective buyers should be aware that the personal commerce platform will enter the public arena via a reverse merger with a special purpose acquisition company (SPAC), in this case, Marquee Raine Acquisition (NASDAQ: MRAC).
As you know, SPACs have generated significant buzz over the trailing year-and-a-half period, with several heavily hyped private enterprises — such as sports betting firm DraftKings Inc. (NASDAQ: DKNG) — going public via business combinations. While DKNG is a success story, many other post-merger SPACs have fared poorly. On a year-to-date basis, enterprises that accessed the capital market through this approach have underperformed benchmark indices.
A major risk factor for ENJY stock and any SPAC-based IPO is the impact of dilution. According to information from Harvard Law School, during the time that the underlying blank-check firm has to find a merger candidate (typically around 2 years), “SPACs give shares, warrants and rights to parties that do not contribute cash to the eventual merger.”
However, it would be unfair to state that ENJY stock is strictly treacherous because it’s entering the public arena via a reverse merger. Many businesses choose to launch an IPO through a combination with a shell company because it provides faster execution than the traditional counterpart. Per KPMG Advisory, a “SPAC merger usually occurs in 3–6 months on average, while an IPO usually takes 12–18 months.”
For the retail investor, the above circumstance translates to a wider breadth of tradable opportunities. In fact, before SPACs earned a poor reputation, a 2018 article from The New York Times stated that an increasing number of small-to-mid-sized companies eschewed going public, in part because they were “enticed to stay private by the sharp rise in venture capital money.”
Importantly, the Times stated that the decline of publicly available firms sapped the U.S. economy of its vitality. Therefore, it’s important to consider both sides of the SPAC debate before you make a decision on ENJY stock.
Enjoy Technology Financial History
While e-commerce solutions had been growing in popularity before the COVID-19 pandemic, the global health crisis helped accelerate its integration, particularly among millennials. According to a June 2021 report by PYMNTS.com, 94% of consumers made online purchases in the past year. Notably, 27% of those who were already purchasing groceries online reported an increase in such acquisitions.
On balance, the narrative is clear: financially stable customers expect a little more from their retailers and are willing to pay extra for top-notch experiences and conveniences. Therefore, the financial backdrop for ENJY stock is exceptionally compelling as the underlying company brings the consumer-tech retail experience to prospective customers’ homes, allowing them to avoid the stress and hassles of brick-and-mortar shops while still being able to interact with a human being.
Because of the upside potential in ENJY stock, Enjoy Technology accrued a total private funding amount of $230.5 million. Further, the mobile retail platform partners with telecommunications giants AT&T Inc. (NYSE: T), BT Group (OTCMKTS: BTGOF) and Rogers Communications Inc. (NYSE: RCI) for free hand-delivery and setup services.
Regarding Enjoy’s SPAC partner Marquee Raine, it closed its IPO of nearly 37.4 million units priced at $10 per unit on Dec. 17, 2020. Credit Suisse Group (NYSE: CS) provided the bookrunning services for the offering. On April 28 of this year, Marquee announced its merger with Enjoy Technology.
According to the personal commerce platform’s Q2 earnings report, Enjoy disclosed encouraging growth statistics, with revenue in the period amounting to $20.87 million, up 64.9% from the year-ago comparison. Also, in the half-year period ended June 30, Enjoy generated $40.2 million, up 55.7% against the same frame in 2020.
As well, the company has been expansive, adding 204 daily mobile stores during the first half of this year, representing year-over-year growth of 53.7%. This tally broke down to 150 stores in North America and 54 stores in Europe.
Still, prospective investors of ENJY stock should note the expanding red ink on the bottom line. Net income for Q2 2021 was a loss of nearly $56 million, which represented a decline of 131.6% against Q2 of last year.
Enjoy Technology Potential
According to Gladly’s 2020 Customer Expectations Report, its data revealed that “79% of survey respondents say personalized service is more important to them than personalized marketing.” More significantly, “84% go out of their way to spend more money with brands that deliver personalized customer service experiences.”
The latter point is really the heart and soul of ENJY stock. By delivering the retail experience directly to the consumer but without the problems associated with commercial transactions — fighting for parking spots or getting your package stolen — Enjoy Technology is incredibly relevant to the upwardly mobile client whose time commands a hefty premium.
In fact, in the final trading session of Marquee before the SPAC assumes the identity of Enjoy Technology, its equity unit achieved an 11% premium against its initial offering price ($10). However, that enthusiasm has to be balanced with the shell company raising less money than initially forecasted.
Per the Silicon Valley Business Journal, Marquee raised only $250 million in gross proceeds instead of a projected $454 million. SPAC investors have the option of requesting a refund on their investment at the IPO price if they don’t like the proposed business combination. That so many people decided to punch out should be a clear warning.
Nevertheless, evidence indicates that personalized experiences can help even formerly struggling physical retailers like Best Buy Co. (NYSE: BBY) regain their footing. With the retail market likely to be incredibly competitive in the post-pandemic era, ENJY stock is worth investigating.
How to Buy Enjoy Technology IPO (ENJY) Stock
SPAC stocks trade like any other equity unit. Therefore, if you believe in Enjoy Technology’s potential, you can jump right in, particularly if you know how to buy stocks. If not, follow the steps below.
Step 1: Pick a brokerage.
Modern brokerages feature similar financial incentives (like commission-free trading) so you’re not missing out on cost structures. Instead, your search for best brokers should be limited to platforms that provide access to opportunities beyond buy-and-hold mechanisms.
Step 2: Decide how many shares you want.
Every IPO carries significant risk due to a lack of track record. Therefore, it’s best to trade with a balanced share count to avoid putting all your eggs in one basket.
Step 3: Choose your order type.
Before placing your order, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers. Tighter spreads imply higher volume and therefore lower risk. The opposite is true for broader spreads.
- Limit order: Buy or sell requests at a specific price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only exit positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
ENJY Restrictions for Retail Investors
Before you jump on an IPO, consult the Financial Industry Regulatory Authority (FINRA) guidelines on restricted persons to avoid conflicts of interest.
ENJY Pre-IPO
In prior generations, only institutional investors had access to pre-IPO opportunities or the ability to buy new issues at their initial offering price. However, companies like ClickIPO are democratizing this rarefied process by distributing pre-IPO shares for select enterprises.
Delivering the Product and the Shop
As the pandemic ebbs and flows, Americans not only have shifted their attitudes regarding work, they also have adapted a fresh outlook on the consumer experience. With Enjoy Technology’s ability to deliver products and associated services to the home, ENJY stock may be a viable long-term opportunity.
Disclosure: The author held a long position in AT&T stock.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.