As Wall Street swims in a sea of bubbles and over-valued companies, excess cash almost always looks for the next new fad to invest in despite a company's lack of fundamentals, or the potential risk from their core business. And as the return of the dot com era bubble in IPO's has exploded in 2014, a new IPO featuring a baby product tied to Jessica Alba appears next in line to receiving massive funding, and become an instant billion dollar company.
On Aug. 27, Honest Co., a company started by actress Jessica Alba to manufacture and sell 'non-toxic' diapers, has raised $70 million to date from investment firms wanting to get in on the ground floor. And according to Dow Jones Venture Wire, the valuation for Honest Co. once it becomes public is expected to reach or exceed $1 billion in valuation, even as its current revenues and assets remain far below this estimated bubble price.
In preparation for an IPO, Jessica Alba’s The Honest Co., a maker of eco-friendly baby products, has raised $70 million at a valuation just shy of $1 billion and is beginning partnership talks to expand to China, Dow Jones VentureWire has learned.
Jeremy Liew, a partner with early investor Lightspeed Venture Partners, said Ms. Alba, the actress-turned-entrepreneur who co-founded the company in 2011, has leveraged her star power for the benefit of the startup.
“She is an international star. We’re starting to see a lot of demand from her fans around the world,” he said. “This idea for non-toxic, chemical free products has resonated around the world in developed and developing countries.” - Zerohedge
Unlike more recent IPO's such as Facebook and Twitter, which become billion dollar companies overnight based on enrolled members versus a fundamental business model that showed any current revenues, Honest Co. has a tangible product, and a famous face to help push sales globally. And ironically, nothing works better in the marketplace than products tied to an A-list athlete or celebrity, as seen over time in the empires built by both Michael Jordan and Kathy Ireland.
No one knows how long the Green fad will remain vibrant in both society, and in business models, but for now, use of it in both marketing and production is a lucrative commodity. And when you tie in a popular global icon such as Jessica Alba to a product like diapers which will be sustainable for the distant future, the potential that one over-valued IPO spawned from this new dot com bubble era may actually break from historical trends, and eventually grow to become worthy as a billion dollar global company.