Oura Postpones IPO Amid Investor Concerns Over Valuation, Share Structure

Smart health ring maker Oura Inc. has postponed its initial public offering, according to a Bloomberg report. The decision follows concerns from potential investors over the company's valuation and the structure of the deal, compounded by broader market uncertainty.

Investor Pushback on Deal Structure

Oura and its backers, including Forerunner Ventures and Lifeline Ventures, had planned to raise up to $2.2 billion by offering 50 million shares. At the top of the proposed price range, this would have given the company a market capitalization of $14.1 billion, or approximately $15 billion on a fully diluted basis, according to its SEC filing.

A key point of contention for investors was the high proportion of shares being sold by existing shareholders. Of the 50 million shares in the offering, only 13.5 million were new shares being issued by Oura. The majority, 36.5 million shares, were to be sold by early investors. This structure raised concerns that the IPO was primarily an opportunity for early backers to cash out rather than to raise new capital for the company's growth, potentially signaling a lack of confidence in its future prospects.

Ad

Market Precedent and Company Response

Investor sentiment was also reportedly influenced by the poor stock performance of other publicly traded health device companies. Potential buyers cited the examples of Fitbit Inc., which traded below its IPO price before being acquired by Google, and Peloton Interactive Inc., which also saw its stock fall significantly after an initial surge during the pandemic.

Despite the concerns, a separate Bloomberg report on Friday indicated that the IPO had been heavily oversubscribed, with orders for about four times the number of shares available. In a statement, Oura CEO Tom Hale addressed the delay, saying, "We are committed to a great IPO for our employees and investors, and we are in a position to choose the optimal time. In the meantime, we’ll continue to execute on the opportunity in front of us."