While the U.S. retail base has a reputation for ravenous consumption, it’s important to realize that this narrative cuts both ways. True, Americans eat plenty of junk products. According to the Centers for Disease Control and Prevention, on any given day, roughly 37% of people here eat fast food. But it’s also true that Americans consume a hefty volume of dietary supplements, per the Council for Responsible Nutrition.
In fact, the advocacy group reported record high supplement use prior to the COVID-19 pandemic. Therefore, you couldn’t ask for a better backdrop for The Better Being Co. initial public offering (IPO).
When is The Better Being Co. IPO Date?
On July 26, The Better Being Co. announced that it launched its roadshow — essentially a marketing campaign to gin up interest in an upcoming public market debut and to ensure that enough investor demand exists. Currently, Better Being has withdrawn its IPO, but it could refile for a new IPO at any time.
According to its original prospectus filed with the Securities and Exchange Commission, Better Being was to offer 12.5 million shares of its common stock. Management expected the IPO to price between $15 and $17 per each. At the midpoint of this range, the company would raise $200 million, affording the soon-to-be-public entity a market value of $843 million.
Goldman Sachs (NYSE: GS), Credit Suisse (NYSE: CS), Jefferies Financial (NYSE: JEF), Deutsche Bank (NYSE: DB), Piper Sandler (NYSE: PIPR) and privately-held Guggenheim Partners were the joint bookrunners for the IPO.
From its public announcement of its roadshow, Better Being declared that it intended to “partially repay outstanding borrowings under its credit facilities,” along with fees and expenses from the IPO. The remainder of the proceeds would have gone toward general corporate purposes.
Interestingly, Better Being rival The Bountiful Company filed for a U.S. IPO in April of 2021. However, its management team later announced that food and beverages giant Nestle (OTCMKTS: NSRGY) acquired its core brands for $5.75 billion. Though no guarantees are available, the buyout speaks to the incredible potential of the health and wellness space.
The Better Being Co. Financial History
One of the most important factors for an organization seeking to go public is to have a strong addressable market. Otherwise, convincing investors to believe in rising growth projections will be incredibly difficult. Fortunately for The Better Being Co., the dietary supplement market size in the U.S. is robust, with pre-pandemic estimates forecasting an industry value of $41.4 billion. Moreover, by 2024, the market could reach a $56.7 billion valuation.
But again, these projections incorporate a pre-pandemic reality. Moving forward, it’s very likely that the public health crisis forced a serious rethink regarding personal wellness. Pointedly, an APA Stress in America survey conducted in late February of this year revealed that 42% of American adults reported unwanted weight gain since the initial COVID-19 disruption. Further, survey respondents reported an average weight gain of 29 pounds.
For context, a male Iceland Sheepdog weighs about 30 pounds, a stark reminder that consumers will be seeking dietary supplements — and for good reason. As you might expect, Better Being corralled this incredible demand profile into meaningful growth. For the year ended Sept. 30, 2020, the company generated $319.3 million in net sales, up 15% from the prior year.
Additionally, Better Being carried positive momentum into this year, generating $178.6 million in the 6 months ended March 31, 2021. This sales haul was up nearly 16% from the prior-year comparison.
To be fair, not everything about Better Being’s financials is encouraging. Most notably, loss from operations in its fiscal year 2020 amounted to $3.5 million, contrasting poorly to FY 2019’s positive operational income of $20.7 million. Nevertheless, when the ramp-up of expenses associated with the COVID-19 impact diminishes, the company will likely be on higher ground.
The Better Being Co. Potential
As noted earlier, the domestic addressable market for dietary supplements is massive. Not only that, The Better Being Co. demonstrated robust (and increasing) growth throughout the coronavirus pandemic. This sales bump suggests that the company’s naturally sourced products — which include brands like Solaray, KAL, Zhou Nutrition, Nu U and Life Flo — resonated deeply with consumers seeking holistic wellness solutions.
Moreover, Better Being enjoyed approximately a year’s worth of free organic marketing. With state and federal government authorities cracking down on nonessential activities, consumers didn’t have much to do. Suddenly, the grocery store became an arena for experimentation while online transactions in the retail sector skyrocketed. Combined, these and general health factors will contribute to growing awareness, engagement and repeat purchases of Better Being products.
Beyond the societal and behavioral paradigm shift of COVID-19, the upcoming IPO can also bank on an across-the-board interest in the underlying business. According to a 2017 report from the Council for Responsible Nutrition, every adult demographic saw an increase in their supplement use against the prior year’s results:
- Ages 18 to 34: 74% in this demo reported supplement use, up from 70% in 2016
- Ages 35 to 54: 75% reported supplement use, up from 70%
- Ages 55 and over: 80% used supplements, up from 74%
Moving forward, it’s almost a certainty that most Americans will at least consider changing bad habits. For instance, a Pew Research Center survey found that respondents took the lessons from COVID and reevaluated what’s truly important. Therefore, it’s no stretch to assume these lessons also apply to nutritional responsibility.
How to Buy The Better Being Co. IPO (BBCO) Stock
When most people talk about stocks, they’re usually referring to secondary market transactions; that is, the trading of already-issued shares on major exchanges like the NYSE or Nasdaq. Obviously, though, for such trading to occur, a public company must first create those shares. The concept of primary market transactions, with the IPO being a prime example.
As the name implies, primary transactions give you better profitability potential as hot debuts tend to rise in value. Unfortunately for prospective retail buyers, IPO underwriters ignore the masses and instead offer institutional investors like mutual funds first crack at new issues at their initial offering price.
Baring certain exceptions, retail investors will need to buy IPOs at the open, which carries a price disadvantage. However, the process is a straightforward one. If you know how to buy stocks, you can jump right in. If not, follow the steps below.
Step 1: Pick a brokerage.
During the advent of online brokerages, many clients focused on cost. Nowadays, brokers have standardized key incentives, such as commission-free trading. Therefore, you should aim for functionality and access when deciding among the best brokers to do business with. For instance, some brokers open pre-IPO access to regular individuals for select market debuts.
Step 2: Decide how many shares you want.
Investing in stocks is risky and IPOs even riskier. To mitigate downside potential, investors should practice smart money management. And there’s no better example than deciding upon a balanced share count that won’t keep you up at night.
Step 3: Choose your order type.
Before placing your bet, review the below market concepts.
- Bid: The maximum price a buyer will offer, the bid is always lower than the ask.
- Ask: The minimum price a seller will accept, the ask is always higher than the bid.
- Spread: The bid-ask price difference, the spread also shows market liquidity and risk. Firmer spreads imply strong negotiations between bulls and bears, resulting in higher liquidity and lower risk. The opposite is true for broader spreads.
- Limit order: A transaction request to be fulfilled only at a specified price, limit orders give you maximum control but no execution guarantees.
- Market order: In contrast, market orders guarantee fulfillment but at the prevailing rate, which constantly fluctuates during session hours.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower than the requested price.
- Stop-limit order: To eliminate ambiguities in your exit pricing, stop-limit orders only fulfill at a predetermined rate. However, such orders carry the same non-fulfillment risk as limit orders.
Step 4: Execute your trade.
To execute a market order, follow these steps:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
The same sequence applies for limit orders but remember to include your desired execution price.
BBCO Restrictions for Retail Investors
If you have some association with an IPO, review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating. In short, regulators take the issue of taking advantage of privileged information very seriously.
BBCO Pre-IPO
In recent years, companies like ClickIPO began delivering pre-IPO shares to regular retail buyers. Essentially playing the role of institutional investor for the masses, ClickIPO buys blocks of select pre-IPO securities for later distribution to its members.
Wellness for Both Self and Profits
Years before the coronavirus upturned our world, Americans across all ages increasingly purchased dietary supplements to bolster health and nutritional sustenance. Thus, an IPO for The Better Being Co. would already be intriguing without this cynical catalyst. But add the resultant health concerns associated with the long quarantine and BBCO stock could very well deliver the goods.
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.