Hims & Hers (NYSE: HIMS), a Telehealth startup, began trading on the NYSE after accomplishing a reverse merger with the blank-check company Oaktree Acquisition Group. Shares fell 5% by the end of day, however co-founder and CEO Andrew Dudum says he is unconcerned about its first-day performance.
“I think most importantly we are excited about the next five and 10 tears of us innovating in the healthcare system,” Dudum said when asked about the muted market reception.
Trading under the ticker symbol ‘HIMS’, the company did not receive the usual eager day one response from investors, as most company’s commencing from a SPAC deal do.
Dudum revealed that though the company was once on track for a traditional IPO, it chose to steer towards the special purpose acquisition company (SPAC) route due to their pricing structure. After speaking with renowned money manager and founder of investment firm Oaktree Capital Management, Howard Marks, Dudum says “We fell in love with the Oaktree team and the capital market experience and deep resources they have.”
The telemedicine company hopes for 30% revenue growth in 2021. In terms of profit, Hims & Hers expects an adjusted EBITDA (earnings before interest, taxes depreciation and amortization) loss of USD29 Million this year, in comparison to its USD20 Million loss in 2020.
“We like to be conservative out of the gate and make sure we can hit and beat expectations we put out. As a young company, I think that’s really important to build credibility and trust with the Street. But when you look at the business, even if you look at last quarter, the business is growing 90% year over year with 76% gross margins and increasingly improved cash efficiency quarter over quarter. And so I think what we have here is a business that inherently robust revenue potential,” Dudum says.