A Look at a Confidential JOBS Act IPO Filing from Trulia

Pre IPO companies are taking advantage of the JOBS Act’s invitation to file confidentially with the Securities and Exchange Commission.

Renaissance Capital counts 12 stock issuers that filed initially under the cloak of secrecy and have since made their S-1s public. This includes LifeLock, which earlier this week unveiled its offering documents to investors.

Others are listed in a blog post from last Friday and include foreign issuers Manchester United and Fleetmatics Group, along with LegalZoom and Trulia.

Because of the rising interest in this closed-door procedure, I took a look at a pre-public S-1 and a public S-1 to see how the documents changed. My observations are more anecdotal than scientific since I selected just one filer, the real estate site Trulia. What’s clear is that the process will be worth keeping an eye on as it unfolds.

Trulia is a San Francisco company backed by Sequoia Capital and Accel Partners that is planning a $75 million offering, and it filed three versions of its S-1 confidentially from May to August before disclosing the document publicly on Aug. 17. What caught my eye was how risk factors were strengthened and detailed through the process. Whether this will prove typical of confidential filings – and whether it reveals anything about SEC priorities – is of course impossible to say at present.

Here are several observations from the filings:

  • First, the documents show an increasing maturity as Trulia updated its pitch and business explanations. The company’s public document included the colored graphics that have become common in S-1s, while its earliest submission did not. There also was a dig at competitor Zillow.
  • Perhaps the most glaring difference appears in the listed risk factors. For instance, Trulia’s public document includes on page 21 a detailed discussion of its reliance on large advertisers and notes that its 10 largest advertisers accounted for more than 60% of media revenue in the six months ended in June. Revenue percentages were omitted from the earlier document.

Another example of this strengthening comes on page 15 where the earliest filing neglected to mention that the bankruptcy of a customer led to a decrease in March quarter media revenue.

The public version also included a section on “Opportunities and Challenges” not included in the initial submission.

  • The public document also includes updated financials and user information through June, as might be expected after a new quarter closes. However, some of the March quarter data available in the first confidential S-1 is gone, making it likely worth an investor’s time to go back to the initial document.

Image courtesy of Trulia.

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