By Jon Swartz
MarketWatch photo illustration/MarketWatch, Unity and New York Stock Exchange
SAN FRANCISCO — Unity Software Inc. Chief Executive John Riccitiello was soaked in irony as he prepared for a unique initial public offering.
Unity /zigman2/quotes/221035391/composite U -0.25% , which develops software used to design and monetize videogames, was about to go public during a pandemic that has torn apart plans of all kinds, but it was a simple technology — WiFi — that scattered its carefully laid plans to the winds Thursday night. An ambitious 75-minute live webcast, including the first-ever virtual bell ringing in the 228-year history of the New York Stock Exchange, was in jeopardy because the planned location — a five-star hotel in Sausalito, Calif., with panoramic views of the Golden Gate Bridge — lost its wireless connection.
In the end, it was just another hurdle to manage for Unity’s executive team, which moved the event to Unity’s downtown San Francisco headquarters and still granted MarketWatch exclusive access to its executives for nearly 24 hours as the company went public. The glimpse behind the curtain showed the flexible and exhausting nature of the current IPO process, as the COVID-19 pandemic throws the typical Wall Street takeover out the window.
“I love New York, and I imagined the sloppy drunk excitement [of a traditional IPO], the physical hubbub,” a masked Riccitiello, sitting on a couch on the rooftop of his company’s San Francisco headquarters, said as the sun set Thursday evening.
However, the age of live video, as well as Unity’s bottoms-up culture, played to a virtual event rather than the real thing in lower Manhattan. Pitched by executives as an iconoclastic company whose values are to “be bold” and “in-it together,” Unity’s leaders chose a groundbreaking webcast and unique structure to its IPO.
“What you miss is the pomp and circumstance. I’m not for it anyway,” said Riccitiello, who welcomed his visitor with an elbow bump. Doing things remotely, he added, made the entire process “punctual and tight. Substance was two times better,” he said.
Unity’s successful so-called “UPO” in the throes of a pandemic punctuated a surreal week and year for the IPO market, which has only grown hotter as the pandemic has continued. More than 100 companies went public from June to August in the busiest stretch for IPOs since the dot-com boom ended in 2000, according to Lindsey Bell, chief investment strategist at Ally Invest.
IPO like it’s 1999: Snowflake and other software stocks pop as market nears dot-com-boom levels
The fact that plans changed dramatically wasn’t surprising during a year when nothing has been close to normal and everyone has had to accept disappointment. Some of the setbacks were not pandemic-related, however: Unity’s original request for the U3D ticker symbol was declined because NYSE does not allow numbers.
“I could say I wanted it to be about U, but that would have been a lie,” Riccitiello said. “There is no deep philosophy... though I did want [the ticker symbol] to be clever and suggestive.”
The unusual circumstances presented a “parallel universe” for Riccitiello and his executive team, and may have shown the New York Stock Exchange and other companies a new path for IPOs during the pandemic and beyond. For example, Chief Financial Officer Kim Jabal fervently believes the virtual “roadshow” — which allowed Unity execs to meet hundreds of investors online instead of in-person meetings in multiple cities — is here to stay.
“The roadshow, as we know it, will no longer exist,” Jabal told MarketWatch.
Rather than standing at the bell-ringing platform at the NYSE with a few members of his team, Riccitiello — the former CEO of Electronic Arts Inc. /zigman2/quotes/206954087/composite EA -0.71% — had to pivot. What a team of 40 employees came up with over the past six weeks was a webcast spotlighted by a virtual bell ringing, and which NYSE officials see as a template for future IPO events.
Unity’s ‘marathon’ day
In the hours leading up to the stock’s debut trades, at least a dozen excited and tired employees — several of them wearing Unity-branded masks — gathered on the sixth floor of company headquarters in what they call a “control center” to produce the 75-minute live webcast. Some arrived as early as 3:30 a.m. A cameraman roams the hallways, filming the proceedings to document the day and provide lighting for remote interviews.
“This feels like marathon training, and we’re at the starting line,” one exec offered around 5:30 a.m.
Read more: Unity Software IPO: 5 things to know about the videogame-engine company
A visibly nervous Clive Downie, who as chief marketing officer had much to do with the webcast, was hoping for the best. (By 3 p.m. , he’s palpably relieved. “I was quite anxious. It’s something that’s never been done before, and it behaved very well,” he said in the afternoon via a Zoom interview.)