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Elevate Suspends its Initial Public Offering

Adam Rust's picture

Posted February 3, 2016

Citing the current volatility in US equity markets, non-bank consumer lender Elevate has decided to withdraw its proposed initial public offering of common shares. 

Elevate is the company behind Rise, Sunny, and Elastic. I recently wrote about Elastic, the line of credit product that Elevate markets in tandem with Republic Bank of Kentucky and a variety of subsidiaries owned by Victory Park Capital. 

Ken Rees, CEO of Elevate, told investors that "although the response to the marketing of our planned IPO has been very favorable, we recognize that the current market volatility makes it very difficult to price our offering at present."

Market-wide volatility tends to increase the value that investors place upon safe bets. That produces an equal and opposite effect upon the value of companies that profile as riskier. According to the VIX, expectations of overall volatility are about 50 percent higher than they were back in November 2015. If investors are suddenly paying less for riskier cash flows, then Elevate might have been wise to pull back. According to its November s-1, it did not report operating profit for 2013 or 2014. During the first nine months of 2015, its losses narrowed.