- Triller still has not gone public, despite announcing its listing aspirations more than a year ago.
- The company said it is waiting on the SEC to declare effective its confidential filing to go public.
- Tech and finance experts say the market for new public offerings is unsteady.
Triller is in a holding pattern on its path to becoming a public company. It is waiting for the US Securities and Exchange Commission, also known as the SEC, to declare effective its paperwork to go public, which it previously filed confidentially.
The company told Insider last month that it was targeting late December 2022 or early January 2023 for its public debut. But it has yet to make its registration statement, called an S-1, available to the public.
Now, the earliest Triller could list is late January, per the SEC's requirement that new entrants make S-1s accessible for public viewing at least 15 days ahead of a listing. Triller plans to trade under the ticker "ILLR."
The SEC reviews each company's registration statement to check that it complies with the agency's disclosure requirements.
When asked on January 3 about its timeline, Triller said it could not comment on its filing process beyond stating that it already filed an S-1 with the SEC privately. A spokesperson said that once its registration statement is declared effective, it will make the filing public for the required time ahead of its public listing.
Triller is pushing to go public despite a broader trend of private companies that are either skipping or delaying listings in response to a volatile economic environment.
The long slog toward becoming a public company as lawsuits pile up
Triller has been pursuing a public offering for over a year.
In October 2020, Reuters reported that the company was in discussions for a possible initial public offering via a special purpose acquisition company. In December 2021, Triller announced it instead planned to go public via a reverse merger with the video-tech company Seachange International. By June, it had ditched that plan in favor of a direct listing.
"The current market demands clear and disciplined thinking," the company's CEO Mahi de Silva said in a statement at the time. "After much deliberation, Triller has determined that the best course of action is a direct listing for Triller."
In August, Triller announced that it had raised "substantial pre-public financing in the form of debt and equity" ahead of an "early Q4 public listing." Media news site TheWrap reported the funding amount at $200 million, though none of the three named investors, nor Triller itself, responded to Insider's requests to confirm that number.
As Triller announced its August funding, Sony Music Entertainment filed a legal complaint against Triller, alleging that the company had failed "to pay millions of dollars in contractual licensing fees." A few weeks before Sony's lawsuit, music producers Swizz Beatz and Timbaland had sued Triller, alleging missed payments tied to its 2021 acquisition of their company Verzuz.
In a statement to Insider last month, Triller said it didn't currently have a deal with Sony and that its disagreement is "over $2 million, a dispute which will be decided in the court system." Triller reached a settlement with the Verzuz cofounders in September.
But Triller's disputes with record labels and music-rights holders have continued. In early December, the company removed from its video app the song catalogs of Sony Music Entertainment, Warner Music Group, and Universal Music Group, as well as the indie-licensing company Merlin, Billboard first reported. And on January 5, Universal Music Group sued Triller, alleging it had failed to make payments, Variety reported.
In a statement to Variety, Triller said the lawsuit was "nothing more than a minor contractual dispute with a publisher, not the label, and has no impact whatsoever on Triller or its business."
"This will be decided upon in a proper venue in a few years, and we clearly believe we are in the right and that a court will find in our favor," the statement continued.
The Triller app remains just one piece of the company's overall strategy. After a series of M&A deals over the past few years, it now counts businesses like Verzuz, a fan-engagement platform called Fangage, the combat-sports streamer Fite TV, and other creator and entertainment-focused companies in its portfolio.
In 2021, Triller's app represented a small portion of the company's overall revenue, according to Seachange filings. Of the company's $62.8 million in revenues in 2021, around 97.6% came from its business-to-business companies like Thuzio and Fite TV, versus its consumer-facing businesses like its video app, Seachange reported.
Other private tech companies are avoiding public markets right now
Triller's plans to go public imminently are bucking a broader trend in the tech industry, as interest in public offerings has dropped precipitously among US tech companies.
The number of IPOs from tech companies in the US and Canada fell 68% between 2021 and 2022, according to data from S&P Global Market Intelligence. Experts said that number is unlikely to increase in 2023 as private companies and investors stare down a wobbly economy.
"Barring any radical changes in the macroeconomic picture, 2023 is projected to look a lot like it did in 2022," said Melissa Incera, an analyst at S&P Global Market Intelligence. "There's still a ton of apprehension."
And while IPOs are less common right now, direct listings like Triller is pursuing are even rarer, said David Erickson, a senior fellow and lecturer in the finance department at the University of Pennsylvania's Wharton School and former operating partner at Bessemer Venture Partners.
Companies usually pursue a direct listing for a very specific reason, such as when a non-US company that's already listed on a foreign exchange wants to make existing shares available on a US exchange. In other instances, a company might choose a direct listing if it is already flush with cash and isn't specifically using the public markets for fundraising, he said.
Past high-profile direct listings include Spotify and Slack.
Direct listings also involve less due diligence from Wall Street.
"A direct listing isn't like an IPO because when an investment bank underwrites an IPO, you have to go through a commitment committee process," Erickson said. "The investment bank does diligence on them. They interview customers. They do background checks on management." That process isn't part of a direct listing, he said.
What Triller could gain from going public
It's unclear exactly why Triller is chasing a listing during a tumultuous moment in the public markets.
In its June press release announcing its direct listing plans, Triller said it was responding to "higher than expected demand" for its recent debt offering and a "clear preference to go public via a direct listing from its current and future shareholders."
In September, Triller announced it had arranged a deal with a private investment firm called GEM Global Yield LLC SCS for a share subscription facility after it goes public. The arrangement would allow Triller to draw up to $310 million in cash over a three-year period after Triller went public in exchange for equity grants and warrants.
Triller wrote that funding from GEM would allow it to make additional acquisitions to "strengthen its toolbox for the creator community and reach breakeven or profitability in the short-term." The company also wrote that the deal, if fully utilized, would bring Triller's fundraising tally to "more than $600 million."
While Triller hasn't released to the public the S-1 for its direct listing yet, the company's 2021 financials surfaced last year when it was pursuing a reverse merger with Seachange. Triller wasn't profitable and reported a $769.7 million net loss in 2021, according to a preliminary registration statement Seachange filed on February 22.
About $496 million of that loss was tied to stock compensation expenses, according to the filing. Triller's CEO Mahi De Silva told Insider at the time that the vast majority of those 2021 expenses came from using stock to purchase other companies.
The company's expenses also included $283 million in "cost of revenues," such as the cost to produce its events, music-licensing fees, IT-related expenses, and spending on acquisitions.
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