Any way you slice it or dice it, Ronco’s initial public offering stands out from the crowd.
The kitchen gadget company may be best known for its late-night infomercials hawking the Veg-O-Matic and the Ronco Showtime Rotisserie. Now, it’s taking the spiel to investors, hoping to lure them into buying $30 million worth of stock by dangling incentives such as its grills and rotisseries, as well as discounts and a “commemorative Ronco book.”
Ronco may not be a household name, but many consumers are likely familiar with its famed informercials hawking tools that sliced, diced, and could do much, much more. Started by inventor Ron Popeil, the company became known for its catchphrase “But wait, there’s more!” Ronco said it has sold more than $2 billion in consumer gadgets since its founding.
The initial stock offering’s suggested retail price? $6 per share, with a minimum purchase of 20 shares.
So what will the deal provide for investors? The company is pitching consumers the chance to “benefit from Ronco’s success,” according to a statement from CEO Bill Moore. But whether the deal makes financial sense for investors may depend on one’s tolerance for risk.
The company’s auditors have warned about “substantial doubts” over whether Ronco will be able to continue as a going concern, according to a regulatory filing. Such “going concern” statements are usually viewed as red flags by investors, since they may signal the risk of running into operational or financial difficulties.
Along with the “going concern” warning, investors will receive, absolutely free, a host of other risks, including one posed by President Donald Trump. Ronco’s filing warns that Mr. Trump’s desire to impose import tariffs on products from China and Mexico could negatively impact the company, since Ronco imports most of its products from China.
So how do Ronco’s financial’s hold up under slicing and dicing? The company lost $2.68 million last year on revenue of $3.56 million. It also lost money in 2015 and has $17 million in debt, the filing said.
Still, there’s no doubt that Ronco holds a unique place in American capitalism. Since Popeil founded Ronco in 1964, the Veg-O-Matic and its “But wait, there’s more” tagline have been spoofed in pop culture, including TV shows, video games and movies.
True to its history of throwing in extras for customers, Ronco is giving away discounts and gadgets to investors. Those who buy up to $1,000 will receive a “one-time 10 percent off discount on Ronco.com.” At the top tier, more than $25,000, investors receive 20 percent off a Ronco Rotisserie and Ronco Ready Grill with accessories, as well as a commemorative Ronco book for the first 30 investors.
The offering is managed through Reg A+, which was created as part of President Obama’s JOBS act in 2012. The rule allows small business to raise as much as $50 million from the public. While companies issuing stock through a Reg A+ offering need to receive approval from the U.S. Securities and Exchange Commission, they have fewer disclosure requirements than traditional IPOs.
The company, which is selling shares on its website, says it’s accepting wire transfer and ACH payments, as well as all major credit cards. For those who might want to buy them in just four easy payments, you’re out of luck. The company says payment is due in full when the SEC declares the IPO effective.