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This year, the market will witness some of the most awaited initial public offerings, including Stripe and SpaceX, if all goes to plan. After disappointing IPO activity in 2022, with few successful listings, expectations are high this time around. MGO Global, Inc, which manages soccer superstar Lionel Messi’s clothing and lifestyle brand, is all set to debut on the stock market.
The Messi factor
MGO Global provides branding and marketing services that help businesses increase their visibility. It mainly manages the design, marketing, and distribution of footwear, apparel, and accessories. The timing of the IPO suggests that the company may be looking to capitalize on Argentina’s World Cup triumph, captained by Messi.. Under the license agreement, which is valid until the end of 2024, MGO Global can develop and market Messi-branded clothing and accessories during the contract.
The Florida-based company plans to offer about 1.5 million common shares in an initial public offering – the date of the offering will be announced later. Assuming the company’s announced $5.0 per share offering price, the IPO will generate total proceeds of approximately $7.5 million. It will value the company at $66 million.
Nasdaq Listing
Boustead Securities and Sutter Securities are the underwriters in the offering. Management has applied to list the shares on the Nasdaq Capital Market under the symbol MGOL. Funds raised through the offering will be used for general corporate purposes, primarily as working capital. If the listing happens this week, as scheduled, it will be one of the earliest IPOs of 2023.
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In the nine months ended September 30, 2022, MGO posted a net loss of $2.1 million, which was greater than the $0.4 million loss reported in the corresponding period a year earlier. The weak underlying performance can be attributed to a 40% decline in net sales to $0.34 million and an increase in operating expenses.
Company
MGO Global was founded together with Ginny Hilger and Maximiliano Ojeda in 2018. Being a loss-making business, the main risk facing the company – from an investment perspective – is not having a proper road map to profitability. In addition, excessive dependence on one client will be a risk to long-term growth. The company operates in a highly competitive industry where it faces competition from leading sportswear brands.
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