BARK executives ring the opening bell on Wednesday, June 2, 2021, on the company's first day of trading on the NYSE.
NYSEThe Original BARK Company made its New York Stock Exchange debut on Wednesday, having completed a merger with a blank-check company, Northern Star Acquisition, on Tuesday.
The eight-year-old company offers monthly subscription boxes full of dog toys, food, dental chews, and other goodies for America’s four-legged companions. Its business has boomed during the Covid-19 pandemic as people adopted pets and turned to ecommerce for more of their shopping needs and desires.
BARK stock (ticker: BARK) jumped about 7.5% on Wednesday, to trade at around $12 in the afternoon. That gives the company a market value of close to $2.4 billion.
“It’s hard to put into words what you feel on a morning like this, being at the stock exchange in person and ringing the bell,” says Matt Meeker, BARK’s co-founder and executive chairman. “It’s a bit of a surreal experience.”
BARK had about 1.8 million subscribers across its flagship BarkBox service and upstart food and health-focused services at the end of its most recent quarter. Some 90% of the company’s $379 million in revenue, up 69%, in its latest fiscal year came from recurring revenue subscriptions. Its net loss was about $31 million in the year, which ended in March.
The company’s guidance for its current fiscal year calls for revenue of $516 million and a net loss of $41 million. Its market price on Wednesday values the company at about 4.7 times management’s estimate of this year’s revenue. Pet ecommerce company Chewy (CHWY) trades for 4.2 times Wall Street’s estimate of its forward revenues.
BARK’s deal with Northern Star was approved by the special purpose acquisition company’s, or SPAC’s, shareholders last week. The transaction provides BARK with more than $400 million to beef up its new product lines and distribution infrastructure, plus fund a marketing push. BARK’s private shareholders continue to own about three-quarters of the now-public company. The SPAC’s stock completed its initial public offering at $10 per unit, which included one share and one-third of a warrant exercisable at $11.50 per share.
Northern Star’s CEO Joanna Coles — the former chief content officer of Hearst Magazines and a current board member at Snap (SNAP) and Sonos (SONO) — and COO Jon Ledecky —chairman of Ironbound Partners and a co-owner of the National Hockey League’s New York Islanders—will join BarkBox’s board of directors.
BARK’s original BarkBox service includes customizable monthly boxes of dog squeaky toys, treats, and chewable goodies. The company is also ramping up a dog food delivery service, which is currently available in 22 states and includes customization for individual dog sizes, age, and health. It also has subscription boxes containing dog dental-care chews.
Up-selling and cross-selling customers on more subscriptions or to add more items to their boxes is an avenue for future growth, says BARK CEO Manish Joneja, who joined the company in October after several years at Amazon.com (AMZN) and eBay (EBAY). An international BarkBox service is also an option down the road.
“People in other countries love their dogs as much as Americans do,” Joneja says. “We are building playbooks for that, but right now our focus is in the U.S. There are 63 million households in the U.S. and we are in 1.8 million.”
SPACs have exploded onto the scene in the past year, bringing dozens of high-profile companies public. Sixty-four SPAC mergers closed in 2020, followed by another 37 so far in 2021. There are more than 400 SPACs on the market searching for merger targets, according to SPAC Insider.
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