According to the S-1:
They are paying out about $400m/yr to preferred shared holders, which will be wiped clean on IPO (preferred shares convert to common), allowing the company to retain these earnings.
Under "Undistributed earnings attributable to preferred stockholders"
Isn't that unusual for normal venture backed companies? I know preferred shares with high dividends as debt-like instruments for financial companies, but ... are there venture investments that expect dividend payments?
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According to the S-1: They are paying out about $400m/yr to preferred shared holders, which will be wiped clean on IPO (preferred shares convert to common), allowing the company to retain these earnings.
Under "Undistributed earnings attributable to preferred stockholders"
Isn't that unusual for normal venture backed companies? I know preferred shares with high dividends as debt-like instruments for financial companies, but ... are there venture investments that expect dividend payments?
New to this stuff, but why are they paying anything to these preferred shareholders?
Likely the investors negotiated the terms in return for funding.