Wireless speaker company Sonos went public on Thursday with a successful debut.
Sonos started trading on Thursday at $16 a share. As of midday, Sonos shares jumped by about 25% to $18.71. The shares closed at $19.91, up 33% on the day.
The wireless speaker company initially priced its initial offering at $15 per share, below the expected range of $17 to $19. At $15, Sonos was valued at $1.5 billion. The IPO will likely prove to deliver an important cash infusion for Sonos as it prepares to take on some of the biggest names in the smart speaker market.
Sonos started as a speaker company with hopes of changing how we connect speakers in the living room. As time went on, the company’s premium speakers have become more popular. Sonos’ secret ingredient is a wireless mesh network that allows you to play different songs and audio tracks in different rooms. You can also choose to sync audio between the speakers. It’s a proprietary feature that has separated Sonos from other speaker makers.
Now, though, Sonos needs to compete against Apple, Amazon, and Google, which are all eyeing the home speaker market with smart devices. Amazon’s Echo, for instance, has proven exceedingly popular. Although it doesn’t deliver the same high-quality audio you’d get in a Sonos speaker, its voice-based convenience factor has been widely celebrated.
Realizing that it needs to compete with those companies, Sonos made the smart move not to create its own virtual assistant. Instead, it’s outfitted some of its speakers with smart virtual assistants. So, if you’re an Alexa user, you can tell the Sonos to turn on the lights and play music.
There are some concerns. Sonos is still losing money. In its most recent fiscal year, ended September 30, Sonos lost more than $14 million on revenue of $992 million. However, Sonos has reported having devices registered in 7 million homes. And it claims its users listen to 70 hours of audio per month through its speakers.