Redfin Corporation (RDFN)

The company I will be talking about today is Redfin corporation. Redfin is a real estate
brokerage firm that is Seattle-based. Real estate is the buying and selling of building and
landing. A real estate broker is a person who is an agent, but also passed a broker license exam,
so they are capable of hiring agents to work for the firm. Redfin isn’t your average real estate
company because they are a technology-based company. They put all customers through a
listings-search website and mobile application. The company went public in August of 2017. The
company is publicly traded through NASDAQ and has a current stock price of $15.59.

Redfin originally started filing documents to become public on July 17,2017 with the S1.
The lead underwriters when the S1 was filed were B of A Merill Lynch, Goldman Sachs & Co.
LLC, RBC Capital Market, Oppenheimer & Co., Allen & Company LLC, and Stifel. Redfin was
looking for most attractive financing options, including asset-backed financing. Redfin felt that
they were a growing company and wanted to take advantage of the market. Redfin picked to go
public on the NASDAQ stock market with those underwriters and the shares they purchased.

When looking at the completed 424 they had the same underwriters as the S1 except
Stifel was no longer on the list. The original public offering price was $23.50 making a total of
$98,829,485. The underwriters had a $1.175 discount per share and was $4,941,474 total. The
total proceeds that went to the company were $22.325 per share and was $93,888,011 total.
Redfin was planning to reinvest the proceeds back into the company. They planned on
reinvesting into things like working capital, technology development, marketing act, expenses,
and capital expenditures. This wasn’t a definite plan, they had to get approval from the
underwriters and see what the company would need in the future.

Goldman Sachs & Co. LLC was the biggest investors by buying 1.766.314 shares. There
1,766,314 shares out of the 4,205,510 total shares made them have 41.99% of shares. B of A
Merill Lynch was the second biggest investor with 767,506 shares and that came out to be
18.25% of the total shares. The next biggest investor was RBC Capital Markets. RBC Capital
Markets bought 714,937 shares. RBC Capital Market’s 714,937 shares got them 17.00% of the
total shares. The fourth biggest investor was Allen & Company LLC. Allen & Company LLC had
15.00% of the shares which turned out to be 630,827 shares. The last underwriter was
Oppenheimer & Co. Oppenheimer & Co. had 325,926 of the shares which turned out to be
7.75% of the total shares.

Redfin began selling stock on the NASDAQ market on July 28,2017. The opening price
for the stock was $19.56. $19.56 was slightly lower than the company anticipated because the
public offering price was $23.50 in the S1 document. The stock closed higher than it opened at
and ended at $21.70. 9,493,100 shares were traded on the first day the market was open. The
underwriters originally paid $22.23 per share of stock. Since the stock is worth $21.70 at the
end of the day the underwriters would have lost $0.53 per share. Goldman Sachs & Co. LLC
would have lost a total of $936,146.42 if they sold their shares. If B of A Merill Lynch sold their
shares they would have lost $406,778.18. RBC Capital Markets had 714,937 shares and if they
sold all of them, they would have lost $378,916.61. Allen & Company LLC would have lost
334,338.31 if they sold all of their shares. Oppenheimer & Co would have lost the least if they
sold all of their shares. They would have lost $172,740.78 The underwriters would have lost a
lot of money if they sold their shares on the first day, but it would be very irregular if they sold
them on the first day.

If you look at more recent data, the stock for Redfin has changed. On September 30,
2019 the stock closed at $16.84 compared to $19.56 when it opened on July 28 ,2017. That
means if a person invested in it when it originally opened and sold it on September 30, 2019
they would have lost $2.72 per share. This would have been a poor IPO choice for an investor if
they purchased Redfin stock. The stock lost a lot of money and if you look at the volume the
stock is being traded is a lot less on September 30, 2019 than on July 28, 2017.

Looking at the history of Redfin stock and the current condition I would not invest in
Redfin today. I would need to see improvement in the company for me to invest. The company
is a lot lower than the public offering price and is at a low since January of 2019. The company
has been at a steady decrease since it has gone public. Redfin has good ideas to innovate the
market and has showed it can do well. The company has been inconsistent, so I would not take
a chance at this moment and invest in Redfin.

Public Offering Price $23.50 per share $98,829,485 total

Underwriting Discount $1.175 per share $4,941,474 total

Proceeds to the Company $22.325 per share $93,888,011 total

Goldman Sachs & Co. LLC 1.766.314 shares 41.99% of shares

B of A Merill Lynch 767,506 shares 18.25% of shares
RBC Capital Markets 714,937 shares 17.00% of shares
Allen & Company LLC 630,827 shares 15.00% of shares
Oppenheimer & Co. 325,926 shares 7.75% of shares