--- title: The Prophet's Perspective December 9, 2024 description: The Prophet's Perspective December 9, 2024 --- [Skip to content](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-december-9-2024#main-content) [![IPO_PROPHET_BLUE logo](https://blog.ipoprophet.com/hs-fs/hubfs/IPO_PROPHET_BLUE%20logo.png?width=2973&height=302&name=IPO_PROPHET_BLUE%20logo.png)](https://www.IPOProphet.com) - [Login](https://app.ipoprophet.com/login) Open main navigation Close main navigation - [Login](https://app.ipoprophet.com/login) [Subscribe to our Newsletter](https://share.hsforms.com/1xXldKrGiQBCbNmtOz6j4Jwq3cu4) [Go Back to Home](http://www.ipoprophet.com/) [Go Back to Blog](http://www.ipoprophet.com/blog) Dec 9, 2024 10:58:12 AM # The Prophet's Perspective December 9, 2024 ![Picture of Scott Shelton](https://app.hubspot.com/settings/avatar/9f39d5740e08012b666d53c25ba6bbc8) [Scott Shelton](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/author/scott-shelton) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-december-9-2024) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-december-9-2024) [Twitter icon](https://twitter.com/intent/tweet?url=https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-december-9-2024) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-december-9-2024) [envelope icon](mailto:?body=https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-december-9-2024) ## Will ServiceTitan Get the Ratchet Hatchet?   As long-time followers of the IPO market, we've seen history rhyme more often than repeat itself. Starting last summer, we've written enthusiastically and consistently about the IPO market's resurgence. Since then, stories in the press—such as Jefferies CEO Richard Handler's notable blog post declaring the IPO window open—have affirmed that the cycle is well underway. Yet, as with any new cycle, this one brings its own unique set of challenges and opportunities.   We see three critical themes emerging in this cycle: (1) valuation reconciliations after prolonged private-market stays, (2) M&A’s dual role as a competitor to public listings and a stabilizer for venture-backed companies, and (3) passive investing's impact on the IPO process. While we’ll explore the latter two in future posts, ServiceTitan’s upcoming IPO highlights the first challenge: bridging the gap between private and public market valuations.   ## The Ratchet Clause and Its Implications   ServiceTitan’s Series H funding round in November 2022 raised $365 million at $84.57 per share, implying a $9.5 billion valuation. To protect Series H investors, the round included a ratchet clause that grants additional shares if the IPO prices below $84.57. This provision preserves the value of Series H investors' stakes but dilutes other shareholders. The clause compounds quarterly at 11% after May 2024, raising the threshold to approximately $90 per share by November 2024. This means the clause will take effect if the offering prices below $84.57—currently well above the proposed range of $52.00 to $57.00.   ## IPO Prophet’s Role in the New Cycle   As the first IPO of this cycle to bring a ratchet clause into focus, ServiceTitan offers a preview of challenges likely to recur. At IPO Prophet, our mission is to help investors navigate these complexities with actionable insights and trading signals. Information about dilution from the ratchet clause, disclosed in the S-1, can be factored into valuation analysis before pricing.   Our trading signals activate once trading begins, capturing dynamics such as demand, the opening price, and the IPO price to issue a Bull signal at the start of trading. We will be closely watching the pricing relative to the range and, of course, the opening print. For emphasis, the absence of a Bull signal is, in our view, a negative indicator for subsequent trading performance.   On a larger scale, it is good that we are seeing deals like this come to market where legacy investors and new public investors can reconcile these issues.    ## Looking Ahead   Resolving these valuation issues is critical for restoring the IPO market’s vitality. Addressing these hang-ups will enable markets to return to their core strengths: fostering innovation, thriving through competition, and rewarding both great companies and their investors with great returns. ![New Calendar-4](https://blog.ipoprophet.com/hs-fs/hubfs/New%20Calendar-4.png?upscale=true&upscale=true&width=1&height=1&name=New%20Calendar-4.png) ![New Calendar-4](https://blog.ipoprophet.com/hs-fs/hubfs/New%20Calendar-4.png?upscale=true&upscale=true&width=683&height=288&name=New%20Calendar-4.png)   ![WeeklyTable-Dec-09-2024-03-52-13-7580-AM](https://blog.ipoprophet.com/hs-fs/hubfs/WeeklyTable-Dec-09-2024-03-52-13-7580-AM.png?upscale=true&upscale=true&width=1120&height=950&name=WeeklyTable-Dec-09-2024-03-52-13-7580-AM.png) **IPO Prophet’s value lies in our proprietary signaling process.** We analyze Initial Public Offerings using a suite of algorithms refined over the past 20 years. The table above highlights all IPOs in 2024 where IPO Prophet has generated a Bull Signal, demonstrating returns based on our signals and subsequent performance since the opening trade. While our indicators can be applied to longer-term positions, the data above reflects only the first day’s performance, as our signals are designed specifically for issuance day, with positions marked to market at the close of the IPO’s first trading day. To learn more about our process, [here.](https://blog.ipoprophet.com/blog/about-ipo-prophets-signals?utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz--m94q8q5wpWbpMmL7FMATMpOPhqIuKibgosYgZVJBOOoOI5NWm8ebjPO7f0OQNaVj7_-00)     ![Weekly Sectors-Oct-26-2024-06-28-15-8913-PM](https://blog.ipoprophet.com/hs-fs/hubfs/Weekly%20Sectors-Oct-26-2024-06-28-15-8913-PM.png?upscale=true&upscale=true&width=1120&height=950&name=Weekly%20Sectors-Oct-26-2024-06-28-15-8913-PM.png) [IPOs](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/tag/ipos), [ServiceTitan](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/tag/servicetitan) ## Related posts ## [The Prophet’s Perspective](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-1) ![Picture of Scott Shelton](https://app.hubspot.com/settings/avatar/9f39d5740e08012b666d53c25ba6bbc8) [Scott Shelton](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/author/scott-shelton) Nov 25, 2024 1:06:10 PM Did This Pony Become a Horse...possibly an Uber Horse? Pony.ai was set to price 15 million ADS at a... [Read more](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-1) ## [The Prophet's Perspective: Week of November 18](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective) ![Picture of Scott Shelton](https://app.hubspot.com/settings/avatar/9f39d5740e08012b666d53c25ba6bbc8) [Scott Shelton](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/author/scott-shelton) Nov 20, 2024 1:10:20 PM After a strong market run leading into the election, the IPO Prophet 2024 cohort felt like a ride... [Read more](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective) ## [The Prophet’s Perspective December 2, 2024](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-1-0) ![Picture of Scott Shelton](https://app.hubspot.com/settings/avatar/9f39d5740e08012b666d53c25ba6bbc8) [Scott Shelton](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/author/scott-shelton) Dec 2, 2024 10:54:51 AM Momentum, Scarcity, and Short Interest in the 2024 IPO Market The team at IPO Prophet hopes... [Read more](https://blog.ipoprophet.com/aslgkuh89gyaep98byanp9t8yaqtp98hyq358yna8pq48y/the-prophets-perspective-1-0) [linkedin-in icon](https://www.linkedin.com/company/ipo-prophet-software/) [X Twitter icon](https://www.x.com/ipoprophet) --- [![IPO_PROPHET_WHITE-2](https://blog.ipoprophet.com/hs-fs/hubfs/IPO_PROPHET_WHITE-2.png?width=800&height=250&name=IPO_PROPHET_WHITE-2.png "IPO_PROPHET_WHITE-2")](http://www.ipoprophet.com) NONE OF THE CONTENT PUBLISHED ON THE WEBSITE OR MOBILE APP CONSTITUTES A RECOMMENDATION, SOLICITATION, ENDORSEMENT, OR OFFER BY IPO PROPHET™ OR ITS AFFILIATES TO BUY OR SELL ANY SECURITIES, FUTURES, OPTIONS, OR OTHER FINANCIAL INSTRUMENTS, OR PROVIDE ANY INVESTMENT ADVICE OR SERVICE. 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