Why has Toronto tech company Q4 delayed its IPO launch?
Toronto software provider, Q4, who has worked with the likes of Netflix, Shopify, and Spotify has put its expansion plans on ice. Despite suggesting they would go public with an IPO in May 2021 the firm has decided to pause these $150 million plans for the time being. But what does this mean – and why would a company in the position of Q4 halt their plans for going public?
The company is an investor relations firm that facilitates investor calls, webcasts, and best practices for investors of some of the biggest companies in the world. They had initially set the price range for their company’s stock at between $10.50 and $13 a share. The company’s management announced a delay in going public but didn’t give any further information.
Toronto software provider Q4 pauses plans for $150-million IPO /via @globeandmail https://t.co/j2lryPVEQY
— SeanSilcoff (@SeanSilcoff) June 21, 2021
Speculation took off, of course, with some suggesting that Q4 couldn’t attract investor attention itself or that the company couldn’t close on their terms. Perhaps the slew of other Canadian companies who have had to price themselves down so far in 2021 gave the company cold feet. Or perhaps they are waiting for a better time for the market and company. Times have been difficult for Canadian IPOs, but there is evidence that Q4 is in an enviable position.
Its major hitters – Netflix and Spotify – provide streaming content for eager subscribers. Not only have they reshaped traditional industries, but they have changed the landscape of tech for the future. So, Q4 would be in a strong position going forwards with its client base.
Indeed, we can see elsewhere that this kind of streaming technology and method of engaging with entertainment is growing in popularity and maintaining it. For instance, as www.superseven.com shows us with its range of live casino options, many traditional casino players are enjoying the live streamed version of some very longstanding games. The popularity of this one niche element of entertainment shows just how intrinsic this form of engaging with content is. The online casino industry itself has gone from strength to strength, with the market continuing to expand in value.
Elsewhere, gaming has also expanded to be a subscriber-based platform rather than a hardware-based one. Sony has drawn up plans for going post-console with its focus on subscribers, while mobile gaming has long captured players through app downloads and built loyalty there with an ad model.
So, there are no concerns about Q4’s core clients losing investment or failing to achieve their targets for profit. This is often a reason that companies delay their IPO launch or pull it all together. The move by Q4 is hopefully a temporary one as the company would reflect well on Toronto and the tech development in the city.
The future of Toronto’s stock market is as volatile as any major market is. With a range of companies not doing as well as expected, Q4 could have decided to hold off on its initial public offering launch for this reason. Or the company could simply have internal kinks to work out which would mean when it does launch as an IPO it is in the best possible position to do so. Either way, its core clientele is going nowhere.
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