In light of recent S-1 confessions and warnings about DOMO’s precarious situation, my condolences go out to DOMO’s customers, staff and investors. If DOMO does not pull off a successful IPO, many fiscally responsible analytics vendors can help them move forward. I do know at least one of my clients that frequently competes with DOMO wants DOMO’s IPO to be a success. They feel a failure might hurt them and other vendors that are not yet public. I doubt it – no one else I know behaves this badly. DOMO’s CEO publicly bragged about lying to everyone…including his own staff and investors. See “We’ve been lying to people so we could surprise them with our master plan“.
“We’ve been lying to people so we could surprise them with our master plan”.
– DOMO CEO
In June 2014, I wrote a rare expose on DOMO. Inspired by DOMO’s over the top obnoxious marketing and secretive demo tactics, I decided enough was enough. I did my homework and revealed them to the naive public. Just as I questioned back then, I still question now… what was the big “sell” story investors were buying? Business intelligence and analytics is a crowded, intensely competitive market. The competition includes big tech vendors – Microsoft, Amazon and I sense even Google is cooking up something much better from seeing who they are hiring.
There was nothing disruptive about DOMO that I could find in 2014. What appears to be unique now is the shameless, reckless spending habits of a CEO who was given way too much control. From reviewing financial expert analysis, it looks like that same CEO will remain in control after an IPO with two classes of stock. Class A common stock is entitled to 40 votes per share. Class B common stock is entitled to one vote per share. After the IPO, DOMO’s CEO will own all Class A shares. DOMO’s current CEO will control 86% percent of the votes.
From the revised S-1 filing: We have two classes of common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to 40 votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share. Following this offering, all shares of Class A common stock will be held by an entity affiliated with Joshua G. James, our founder, chief executive officer and chairman, who will have voting control over 100% of our Class A common stock, representing 86% of the voting power of our outstanding capital stock. See “Description of Capital Stock.”
I cautioned my readers about DOMO a long time ago. I felt DOMO was “top secret” with regards to demos and content because they wanted to get as many trusting people on board as quickly possible before word got out. Thus, I am warning you again that good vendors do not behave this way.
I cautioned my readers a long time ago. Good vendors do not behave this way.
Keep in mind that DOMO could get enough money this week from the IPO. Anything can happen. If they do make it through this summer, the CEO will need to change his ways or sell DOMO for DOMO to survive. Update 7/2/2018: DOMO did go public.
What Financial Experts and Other Sources See
This time I am NOT all alone in warning the public about DOMO. The world has finally seen the reality in DOMO’s S-1 revelations and warnings. Here are perspectives on DOMO’s IPO filing from many other sources. Just perform a simple Google search and you can find more…
- DOMO went Public …but Watchdog Warns ‘Stay Away from this IPO’
- Bloomberg: Here’s the Poster Child for Silicon Valley Excess
- The DOMO S-1: Does the Emperor Have Clothes?
- MarketWatch: Much-hyped Cloud Startup DOMO looks like a Tech IPO to Avoid
- Seeking Alpha: This May Be The Scariest IPO Filing You’ve Ever Seen
- Seeking Alpha: DOMO Adds A Scary Provision To Its Revised IPO Filing
- Forbes: Why DOMO’s IPO Valuation Is Down Over 75%
- Desert News: Utah-based DOMO files IPO Lifeline in Midst of Fiscal Strife
- LA Times: Hype and Plunder: This High-Tech Company may be Setting a New Low for Self-Indulgent IPOs
- Business Insider: DOMO for Dummies The Startup’s Bizarro IPO Filing is a Sign that Companies are Chasing Dumb Money and that Hard Times are Coming
- Diginomica: Can We Believe Anything about DOMO?
- Crunchbase: Unpacking DOMO’s IPO Filing