ReportWire

Tag: IPOs

  • Sam Altman should take Niklas Ostberg’s number—what the Delivery Hero founder doesn’t know about taking a company public and handling grumpy shareholders isn’t worth knowing  | Fortune

    [ad_1]

    Niklas Östberg is a rare beast. A founder-CEO who took his company public and survived a shareholder backlash. Sam Altman might like to take his number as he considers floating OpenAI. Reporting on your results every three months is not for the faint-hearted. 

    Östberg is the entrepreneur behind Delivery Hero, the €7.65bn global food delivery business which IPO’d in 2017. It was the largest float of the year on the German stock exchange, and unlike other, rockier food delivery debuts (Deliveroo, Blue Apron), its share price rose strongly. 

    That was then. Roll forward to 2025 and it has been far from a good year on the markets for the owner of Talabat (Gulf, North Africa), Glovo (Europe, Africa) and Foodpanda (South-east Asia). Delivery Hero’s share price fell to a low of €16.05 ($18.94) in November, from a high of €31.39 ($37.05) nine months earlier, a nearly 50% drop. Competition from the Chinese giant, Meituan, and regulatory fines for poor employment practices in the cutthroat world of moped and cycle delivery weighed on share price performance. 

    Delivery Hero Chair, Kristin Skogen Lund, was obliged to write to shareholders announcing a strategy review, a streamlining of costs and continuing exits from underperforming regions. “Despite this significant progress and our relentless focus to always deliver the best possible customer proposition, we acknowledge that the share price performance has been disappointing for all of us,” she said. Östberg was the letter’s co-signatory. 

    We know how this movie is meant to end. ‘Founder-CEO struggles to scale on the public markets, shareholders become impatient for returns, founder-CEO departs.’ 

    Östberg’s story arc is different and provides significant lessons on the value of long-term thinking, management style, and intense knowledge of the business. He has survived a number of storms around the company’s business model and valuations and has survived each of them. Delivery Hero’s share price is up 18% this year. 

    Read more: Oracle billionaire Larry Ellison’s next big bet: Redefining how long–and how well–we live

    “Of course, in a private market, it’s much easier because you have to convince three to five board members and you can show them the exact economics and so on,” he tells me. “On the public market, you cannot give that same level of disclosure, and you have to convince a lot more than just a few so, of course, that’s a challenge.” 

    “The advantage of being a founder is that the business is your baby. You want the best for your baby and you are willing to go through fire and fury and anger to make sure that your baby is going to do well. That’s the difference between a manager and a founder, that we are stubborn and we want the best, sometimes we are wrong, but sometimes we are right.” 

    “I’m fine to look stupid for one or two or three years, as long as I know that in year four, I’ll prove it.”

    Niklas Östberg

    Delivery Hero’s vision is ‘deliver anything’—hot food, groceries, household goods. The quick commerce market is projected to grow from $184.6bn in 2025 to $337.6bn by 2032 according to Fortune Business Insights. But getting there costs money, which is where the pressure starts. 

    “[In the past] every shareholder on the planet hated home delivery. [They said] it’s never going to be profitable. Our largest competitor in America was saying how stupid this is. Everyone was saying ‘this is the dumbest thing ever’ and we took a lot of heat.” 

    “Until they realized maybe two, three, four years later, that the dumbest thing is not to do it.” 

    “Later on, we had a similar challenge when we went multi-vertical, where we deliver from grocery stores. Then we built our own warehouses. We built 1,000 warehouses—micro-fulfilment centers, or Dmarts, as we call them.” 

    “And, of course, that was seen as even dumber than delivery. It was like, ‘you can’t make money on delivering toothpaste and toilet paper.’ We lost a lot of money on it, and so did everyone else.” 

    “And then the capital ended in 2021 [the end of the low interest-rate cycle] and everyone went bankrupt, or close to bankrupt, and started to scale down and we decided, no, we’re still going to do it. Again, everyone said, ‘that’s the dumbest decision’ and we came under more heat for that. But now I’ve also made that business model profitable.” 

    Patient capital is rare on the public markets, and activist investors are increasingly apparent on share registers. Östberg says that the discipline demanded should be seen as a help, not a drag.  

    “It would clearly be less of a painful path, I’m sure, to not do it in the public sphere, especially in these transitions, or when things are a little bit rough, or you take a decision that’s good for five years, but not good for a quarter.” 

    “But we don’t do this because it’s easy or it’s the path of least resistance. We are fine to take the resistance, as long as I know that I’m going to be right over time. I’m fine to look stupid for one or two or three years, as long as I know that in year four, I’ll prove it.” 

    “I think driving efficiency is a good thing, because that means you have a better return on your capital and you can invest in things that really makes a difference for consumers. It has also made the company much stronger and better.” 

    “[In times of change] the public company will have to move the fastest, because they will be so exposed if they’re wrong or if they’re not on the ball, while I think sometimes the private company can be living in a bubble.” 

    ‘Founder-CEO makes it through shareholder temper tantrum.’ Sam Altman, take note. 

    [ad_2]

    Kamal Ahmed

    Source link

  • IPO market’s red-hot year has been cooled by the shutdown and more caution among investors

    [ad_1]

    NEW YORK (AP) — A strong year for initial public offerings on Wall Street has fizzled out due to the government shutdown and a cautious turn by investors.

    Many IPOs targeted for the end of this year will likely be pushed into next year as the Securities and Exchange Commission works to clear a backlog of hundreds of registration statements. Meanwhile, shares of companies that did make their market debuts haven’t fared well lately amid concerns that stocks have gotten too expensive after another double-digit gain for the market this year.

    “A backlogged SEC, the approaching holiday slowdown, and pressure on AI and other tech stocks are all weighing on hopes for a near-term rebound,” wrote Bill Smith, CEO of Renaissance Capital, in a note to investors.

    Despite the backlog, Wall Street is still anticipating several IPOs in November and December that were already in the later stages of the regulatory process.

    Central Bancompany was one of the bigger companies going public following the end of the government shutdown. The bank holding company for The Central Trust Bank raised $373 million from its IPO on Thursday. Still, November is on track to be among the slowest months for IPOs in 2025, according to Renaissance Capital.

    Klarna CEO Sebastian Siemiatkowski, right, rings a ceremonial bell as his company's IPO begins trading on the floor of the New York Stock Exchange, Wednesday, Sept. 10, 2025. NYSE President Lynn Martin applauds at left. (AP Photo/Richard Drew)

    Wall Street anticipates that medical supplies company Medline could go public in December, potentially raising up to $5 billion, while cryptocurrency technology company BitGo remains another potential IPO for next month.

    The more cautious turn for the market has also checked the gains of some more recent IPOs, sending some falling sharply since their debuts.

    Web design software company Figma has essentially lost all its gains since going public in July. It more than tripled on its first day of trading after pricing at $33 per share. It is now trading slightly above the IPO price.

    Klarna, the Swedish buy now, pay later company priced its IPO at $40 per share in September and is currently trading close to $29 per share. Cloud computing company CoreWeave also priced its IPO at $40 per share, in March. It surged in the months following its IPO, but has pulled back significantly to about $72 per share.

    Software company Navan went public at $25 per share in the midst of the government shutdown but failed to gain much ground and is now trading at about $15.

    The benchmark S&P 500 is having a bleak November. It’s down 3.5% for the month, with much of that decline being led by the tech sector, which had been driven higher by enthusiasm over developments in artificial intelligence. Wall Street has grown more concerned about whether the gains have been justified.

    The S&P 500 is still up more than 12% for the year and the tech-heavy Nasdaq is up more than 15%.

    Renaissance Capital’s IPO Index is down about nearly 0.8% so far this year as of Friday and has been falling against the S&P 500 since mid-October.

    “What that shows is that investors very quickly monetized, they didn’t want to take the long-term risk,” said Samuel Kerr, head of global equity capital markets at Mergermarket.

    Still, overall demand for IPOs remains strong. Even with the recent pullback, the broader market remains expensive, especially within the influential technology sector. IPOs have traditionally been another way for investors to get into the market at a less expensive entry point.

    “Increasingly, as a money manager, you have to find other places to make money and typically, IPOs are that place,” said, David Kaufman, partner and co-chair of the corporate & securities practice at Thompson Coburn LLP. “You continue to have all these large mutual funds and money managers with excess cash and no place to put this cash.”

    The broader market’s direction in the new year will determine the costs and types of IPOs. Some of the more anticipated big tech names that could go public in 2026 include AI-focused software company Databricks and graphic design app Canva. Wall Street also considers financial technology Plaid as another possible 2026 IPO.

    Any visible lull in IPO activity through the rest of the year is partially masking a flurry of activity beneath the surface as companies go through the regulatory process.

    “It’s a busy time for lawyers and bankers trying to tee things up for the first and second quarter of next year,” Kaufman said.

    [ad_2]

    Source link

  • IPO market’s red-hot year has been cooled by the shutdown and more caution among investors

    [ad_1]

    NEW YORK — A strong year for initial public offerings on Wall Street has fizzled out due to the government shutdown and a cautious turn by investors.

    Many IPOs targeted for the end of this year will likely be pushed into next year as the Securities and Exchange Commission works to clear a backlog of hundreds of registration statements. Meanwhile, shares of companies that did make their market debuts haven’t fared well lately amid concerns that stocks have gotten too expensive after another double-digit gain for the market this year.

    “A backlogged SEC, the approaching holiday slowdown, and pressure on AI and other tech stocks are all weighing on hopes for a near-term rebound,” wrote Bill Smith, CEO of Renaissance Capital, in a note to investors.

    Despite the backlog, Wall Street is still anticipating several IPOs in November and December that were already in the later stages of the regulatory process.

    Central Bancompany was one of the bigger companies going public following the end of the government shutdown. The bank holding company for The Central Trust Bank raised $373 million from its IPO on Thursday. Still, November is on track to be among the slowest months for IPOs in 2025, according to Renaissance Capital.

    Wall Street anticipates that medical supplies company Medline could go public in December, potentially raising up to $5 billion, while cryptocurrency technology company BitGo remains another potential IPO for next month.

    The more cautious turn for the market has also checked the gains of some more recent IPOs, sending some falling sharply since their debuts.

    Web design software company Figma has essentially lost all its gains since going public in July. It more than tripled on its first day of trading after pricing at $33 per share. It is now trading slightly above the IPO price.

    Klarna, the Swedish buy now, pay later company priced its IPO at $40 per share in September and is currently trading close to $29 per share. Cloud computing company CoreWeave also priced its IPO at $40 per share, in March. It surged in the months following its IPO, but has pulled back significantly to about $72 per share.

    Software company Navan went public at $25 per share in the midst of the government shutdown but failed to gain much ground and is now trading at about $15.

    The benchmark S&P 500 is having a bleak November. It’s down 3.5% for the month, with much of that decline being led by the tech sector, which had been driven higher by enthusiasm over developments in artificial intelligence. Wall Street has grown more concerned about whether the gains have been justified.

    The S&P 500 is still up more than 12% for the year and the tech-heavy Nasdaq is up more than 15%.

    Renaissance Capital’s IPO Index is down about nearly 0.8% so far this year as of Friday and has been falling against the S&P 500 since mid-October.

    “What that shows is that investors very quickly monetized, they didn’t want to take the long-term risk,” said Samuel Kerr, head of global equity capital markets at Mergermarket.

    Still, overall demand for IPOs remains strong. Even with the recent pullback, the broader market remains expensive, especially within the influential technology sector. IPOs have traditionally been another way for investors to get into the market at a less expensive entry point.

    “Increasingly, as a money manager, you have to find other places to make money and typically, IPOs are that place,” said, David Kaufman, partner and co-chair of the corporate & securities practice at Thompson Coburn LLP. “You continue to have all these large mutual funds and money managers with excess cash and no place to put this cash.”

    The broader market’s direction in the new year will determine the costs and types of IPOs. Some of the more anticipated big tech names that could go public in 2026 include AI-focused software company Databricks and graphic design app Canva. Wall Street also considers financial technology Plaid as another possible 2026 IPO.

    Any visible lull in IPO activity through the rest of the year is partially masking a flurry of activity beneath the surface as companies go through the regulatory process.

    “It’s a busy time for lawyers and bankers trying to tee things up for the first and second quarter of next year,” Kaufman said.

    [ad_2]

    Source link

  • Navan plows ahead with IPO during shutdown, aims for $6.45B valuation  | TechCrunch

    [ad_1]

    Corporate travel management company Navan — once known as TripActions — filed updated IPO documents with the U.S. Securities and Exchange Commission on Friday, even though the federal government is currently shut down.  

    Navan is proceeding under new SEC rules that allows wanna-be public companies that are in limbo during the shutdown to file updated information, including share count and pricing, and have their statements automatically okayed in 20 days without staff scrutiny. Once the filings are declared effective, Navan can kick off its roadshow. The rule, however, doesn’t mean that staff can’t ask questions or require amended filings later. 

    Navan declined to comment to TechCrunch about its updated IPO documents.

    The going thought was that the shutdown would cool and possibly freeze an IPO market that had just started to thaw. Even with this rule, many companies would rather get a green light from a staffer than go it alone, sources told, Bloomberg. So the tech world will be watching how Navan’s gambit fairs. 

    Navan’s updated filing shows the company plans to sell 30 million shares, with insiders selling an additional 7 million. It priced its range at $24 to $26. At the high-end, the company would raise more than $960 million and be valued at $6.45 billion. Navan is backed by Lightspeed, Andreessen Horowitz, Zeev Ventures, and Greenoaks.

    Navan generated rolling 12-month revenue of $613 million (up 32%), with losses of $188 million, according to the updated filing.

    Techcrunch event

    San Francisco
    |
    October 27-29, 2025

    [ad_2]

    Julie Bort

    Source link

  • Government shutdown threatens to stall the recovery in the IPO market

    [ad_1]

    NEW YORK — NEW YORK (AP) — The U.S. government shutdown is waving a caution flag at private companies racing to make the move to the public market.

    The market for initial public offerings has been on a years-long recovery after spiking inflation slammed the brakes on activity in 2022. The IPO market is already on track for its best year since 2021 with 163 deals and $31 billion in proceeds raised so far, according to Renaissance Capital.

    Companies rely on the U.S. government, through the Securities and Exchange Commission, to review and approve IPO filings, while monitoring the ongoing process. The SEC is now operating with minimal staff, significantly delaying or halting those reviews and approvals.

    Investors and companies are dealing with more than just technical issues. A prolonged government shutdown could sap confidence in the U.S. markets and economy. IPO activity typically remains strong through October, then slows in the U.S. during the final two months of the year.

    “That’s always an end of the year factor,” said Samuel Kerr, head of global equity capital markets at Mergermarket.

    Investors and companies had been mostly brushing off much of the uncertainty roiling the U.S. government and economy through the year, including an unpredictable trade policy, ongoing worries about inflation, a weakening job market and questions about Federal Reserve policy. Amid all that, the stock market has notched record after record and new companies keep joining the ranks.

    The impasse in Washington, though, has brought a reminder of the challenges facing the market.

    “It (the shutdown) reminds you that we’re not operating in normal times,” Kerr said.

    Investors have been drawn to IPOs because stocks have looked pricey for a while, especially in the technology sector, leaving them looking for other ways to get into the market. IPOs have offered a way to do that. Many of the bigger IPOs in 2025 have been in growing technology fields, including cryptocurrency technology and artificial intelligence.

    Circle Internet Group, the U.S.-based issuer of one of the most popular cryptocurrencies made its public debut in June for about $1.1 billion.

    Circle issues USDC, a stablecoin that can be traded at a 1-to-1 ratio for U.S. dollars, and EURC, which can similarly be traded for euros. It’s shares priced at $31, soared on the first day of trading and currently trade for around $152.

    Cryptocurrency exchange Bullish raised about $1.1 billion in August. Cloud-computing company CoreWeave raised about $1.5 billion when it went public in March.

    Klarna, the Swedish buy now, pay later company, entered the public market in September, raising $1.37 billion. That made it the largest IPO of the year, according to Renaissance Capital. The IPO priced at $40 and shares currently trade around $42.

    Outside of the shutdown, market conditions remain ideal, said Bill Smith, CEO of Renaissance Capital, in a note to investors.

    “The IPO market still has a bit of gas in the tank,” he said.

    [ad_2]

    Source link

  • ‘Shut it down!’ — Bumble founder Wolfe Herd is terrified that there’s a new Hulu biopic about her life and wanted to block it two years ago | Fortune

    [ad_1]

    Bumble founder Whitney Wolfe Herd is facing a situation that few tech executives ever encounter: watching her own life story dramatized on screen — without her involvement.

    Hulu’s new biopic about the 35-year-old entrepreneur premiered on Sept. 8. Swiped stars Lily James as Wolfe Herd and traces her dramatic rise from Tinder cofounder to Bumble CEO and youngest woman to take a company public. But Wolfe Herd herself says the project has left her deeply uneasy.

    In an interview with CNBC’s Julia Boorstin, Wolfe Herd admitted she only learned of the film once it was already “off to the races,” with a script in hand and production underway. Her discomfort ran so deep that she asked her lawyer to intervene.

    “I even was asking my lawyer two years ago, ‘What do I do? I don’t want a movie made about me. Shut it down!’” Herd recalled.

    As she acknowledged, public figures often have little legal recourse to stop projects based on publicly known stories.

    The experience has been unsettling. Wolfe Herd said she finds the idea of a movie about her life “too weird,” confessing she hasn’t been able to watch the trailer all the way through. At the same time, she expressed some appreciation for the casting choice, calling it an “honor” to be portrayed by James. Still, the mix of emotions has left her conflicted.

     “I’m obviously both terrified and maybe slightly flattered,” she said. “But the strangeness and the fear of it outweighs any flattery.”

    The film arrives at a moment when Hollywood has increasingly turned to Silicon Valley for inspiration. Hulu’s The Dropout chronicled Elizabeth Holmes and Theranos, Apple TV+’s WeCrashed dramatized Adam Neumann and WeWork, while older films put the lives of Steve Jobs and Mark Zuckerberg on screen.

    These projects try to infuse the adrenaline of Silicon Valley invention with the staidness of business reality. And Wolfe Herd’s career—with its combination of early success, controversy, and ultimately a billion-dollar IPO—fits neatly into the genre.

    Indeed, Wolfe Herd’s story is, in many ways, cinematic. Born in Salt Lake City, Utah, to a family invested in both philanthropy and property development, she launched her first business before 21, which was a bamboo tote bag project to raise funds for those affected by the BP oil spill of 2010. She was instrumental in Tinder’s meteoric rise but left following a high-profile lawsuit, only to cofound Bumble in 2014—a dating app premised on women making the first move. 

    In 2021, Wolfe Herd became the youngest woman in history to take a company public, ringing the Nasdaq bell with her son on her hip. Today, Bumble boasts millions of users and a reputation for promoting safer, more empowering online interactions.

    But success doesn’t always mean control over your own story. Hulu’s film, directed by Rachel Lee Goldenberg and drawing extensively from public records, lawsuits, and media accounts, bypassed Wolfe Herd’s participation from the start. Some critics have described the movie as entertaining but “thin,” relying on the broader narrative of girlboss ascent while acknowledging the lack of deep input from its subject.

    It currently has a 37% rating on Rotten Tomatoes. 

    For Wolfe Herd, the challenge is less about accuracy than about the loss of agency. As someone who built her career by upending traditional dynamics and giving women more control over their interactions online, having no say in how her own story is told feels dissonant. 

    She admits she may eventually watch the film, but not without hesitation.

     “I guess I gotta get some popcorn and stay tuned,” she said with a wry resignation.

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    [ad_2]

    Eva Roytburg

    Source link

  • Klarna goes public as 3 in 4 Americans rely on buy-now, pay-later. Experts worry it’s snowballing ‘quickly into a serious financial burden’ | Fortune

    [ad_1]

    Swedish fintech firm Klarna just made its highly anticipated debut on the New York Stock Exchange, raising $1.37 billion and locking in a $15 billion valuation. But finance and legal experts are becoming wary of the growing risks associated with the ballooning buy-now, pay later (BNPL) industry. 

    Klarna, known for its short-term, interest-free financing solutions for consumers, has rapidly expanded its user base to more than 100 million globally, partnering with more than 720,000 retailers. The Wednesday IPO is a signal of how large and influential BNPL options have become. According to a survey published Wednesday by LegalShield of more than 2,000 U.S. adults aged 18 to 80, a whopping three-fourths of people rely on BNPL services, which also include products like Affirm, Afterpay, and Sezzle. Even PayPal has a BNPL option.

    Although Klarna and other BNPL services are growing increasingly popular—often replacing credit cards for some younger generations—that doesn’t mean they’re without risks. While the service can allow for consumers to break up large purchases into more digestible payments, if they have too many of these in place, the costs can easily rack up.

    “We’re hearing story after story of people overextending themselves, juggling payments from various loan companies and banks,” Rebecca A. Carter, a LegalShield provider lawyer with Friedman, Framme & Thrush, said in a statement. “What many don’t realize is that if you aren’t disciplined about managing the payment schedules and budgeting, it can snowball quickly into a serious financial burden.”

    Analysts have coined this shift from flexible financing to a “bandage for basics” ahead of the FICO pilot, according to Storyful Intelligence. 

    And what many people—nearly 40% of consumers, according to LegalShield—also don’t realize is that BNPL will soon impact credit scores for people who use it to buy things like clothing, furniture, concert tickets, takeout food, or even an Airbnb stay. Starting this fall, FICO scores will include BNPL data from consumers.

    “Buy Now, Pay Later loans are playing an increasingly important role in consumers’ financial lives,” Julie May, vice president and general manager of B2B Scores at FICO, said in a statement. “We’re enabling lenders to more accurately evaluate credit readiness, especially for consumers whose first credit experience is through BNPL products.”

    Complex financial tool

    LegalShield also warns 45% of BNPL users have faced legal or contractual disputes from using the financing service, with 62% of those reporting billing errors and 60% forced to pay even after returning items. But many of these customers just give up, LegalShield found, and just pay incorrect charges or don’t know they have the legal right to dispute them.

    “BNPL has evolved from a simple payment option into a complex financial tool that, without proper understanding and legal guidance, can gradually become overwhelming for families,” Carter said. 

    To be sure, not all aspects of BNPL services are bad. They’ve given consumers more purchasing power, an interest-free option for paying off major purchases, and instant gratification for customers who would otherwise have to save up for a long time to make a high-ticket purchase. It’s also been positive for merchants in that they can have increased sales volume and expand to new customer demographics. 

    Personal finance experts have also offered advice to consumers for not getting overwhelmed by BNPL payments—chiefly not spending more than you make. 

    “Credit card debt is a terrible place to be. Interest rates are unbelievable, and if you find yourself in that trap, it can be so hard to get out of,” Allyson Kiel, a private wealth advisor at Synovus Bank, previously told Fortune’s Preston Fore. “If it’s a want and not a need, you should wait.”

    Consumers can also expect more BNPL innovations in the future—particularly in light of Klarna’s IPO.

    “This isn’t the finish line. It’s fuel,” Klarna CEO and cofounder Sebastian Siemiatkowski said in a statement about the IPO. “Fuel for us to keep disrupting, keep innovating, and keep making life easier for millions of people out there.

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    [ad_2]

    Sydney Lake

    Source link

  • Klarna prices IPO at $40, valuing company at $15 billion ahead of trading debut

    [ad_1]

    NEW YORK — Klarna priced its long awaited initial public offering at $40 a share late Tuesday, valuing the Swedish buy now, pay later company at more than $15 billion.

    The valuation easily makes Klarna one of the biggest IPOs so far in 2025, which has been one of the busier years for companies going public. The $40 share price came in above market expectations, which called for Klarna to price its shares between $35 and $37 each.

    Founded in 2005 as a payments company, Klarna entered the U.S. buy now, pay market in 2015 in partnership with department store operator Macy’s. Since then, Klarna has expanded to hundreds of thousands of merchants and has embedded itself in internet browsers and digital wallets as an alternative to credit cards. The company recently announced a partnership with Walmart.

    Klarna’s most popular product is what’s known as a “pay-in-4” plan, where a customer can split a purchase into four payments spread over six weeks. The company also offers a longer-term payment plan where it charges interest.

    The business model has caught on globally. The company said 111 million consumers worldwide have used Klarna for a purchase.

    Ahead of going public, Klarna reported in August that it had second-quarter revenues of $823 million and had an adjusted profit of $29 million.

    The company will start trading Wednesday under the symbol “KLAR” on the New York Stock Exchange. While based in Sweden and a popular payment service in Europe, its decision to go public on U.S. markets is a sign that the company executives see American shoppers as its future growth market.

    Klarna will now be the second-largest buy now, pay later company on U.S. public markets, behind Affirm. Shares of Affirm have surged more than 40% so far this year, valuing the company at around $28 billion, helped by a belief among investors that buy now, pay later companies may take away market share from traditional banks and credit cards.

    Klarna was backed by JPMorgan Chase and Goldman Sachs as their investment banks.

    Other popular IPOs so far this year include the design software company Figma and Circle Internet Group, which issues the USDC stablecoin. Investors are also looking forward to the expected market debuts of the ticket exchange StubHub and the cryptocurrency exchange Gemini, which is majority owned by the Winklevoss twins.

    [ad_2]

    Source link

  • 3 reasons why Klarna’s valuation has fallen by nearly 70% from its peak just a few years ago

    [ad_1]

    Klarna went from Europe’s most valuable startup to a lesson in how fast fortunes can change—and now, the long-delayed IPO is finally happening. The Swedish company turned “buy now, pay later,” or BNPL into a global catchphrase and won the hearts of Gen Z along the way. Now it’s preparing to list shares at an estimated $14 billion valuation, but it’s been quite a ride to get there, including a 69% fall from the $45.6 billion perch it once enjoyed.

    Back in 2021, the Swedish BNPL giant was soaring in subsequent fundraises, first becoming Europe’s startup champion and then coming only behind Stripe among fintechs globally. Still, a $14 billion IPO represents a redemption arc for a company that could’ve easily been another cautionary tale—its valuation plunged by as much as 85%, to $6.7 billion by 2022. Klarna has cleaned up its finances, diversified into ads and consumer features, and now looks more like a disciplined fintech platform than a free-spending rocket ship.

    The company, backed by investors including Sequoia Capital and Silver Lake, filed for a U.S. initial public offering that could come by year’s end. It would be among the largest listings of a European technology company in recent years. At its peak in 2021, Klarna was valued higher than some European banks. But rising interest rates, tighter regulation of BNPL services, and investor skepticism toward profitless growth led Klarna to slash operating costs, cut staff, and seek capital at progressively lower valuations.

    In recent quarters, Klarna has reported progress. Losses have narrowed, and management has shifted its focus from expansion to measured growth and profitability. Analysts say its large merchant network and consumer adoption remain competitive advantages, though questions persist about the durability of its installment-payment model in a higher-rate environment. In its regulatory filing, Klarna said it was profitable for its first 14 years before expanding into the U.S. and other markets, and it hasn’t recorded an annual profit since 2018. “In 2023, our operating loss started to decline and we began generating positive transaction margin dollars in the United States,” the company said in its regulatory filing. So why did Klarna’s value collapse after its profits did—and why is it headed toward a seeming rebound on the public markets?

    1) The end of low interest rates

    Tech valuations in general have suffered since 2022, when the Federal Reserve hiked interest rates aggressively to combat rising inflation. Many frothy business models that depended on easy credit—BNPL foremost among them—suffered as capital became costlier. Broader macroeconomic volatility has weighed on many firms similar to Klarna, as geopolitical unrest and trade policy uncertainty have combined to put a cap on investment.

    The S&P 500 has become extraordinarily concentrated, led at times by the “Magnificent Seven,” and lately the Magnificent Six without Tesla. Nvidia has shot to a remarkable $4 trillion-plus market cap and can move markets now by virtue of its tremors. At times, the S&P 500 is more like the S&P 10.

    2) Consumer slowdown

    The American consumer is the engine of the American economy, responsible for two-thirds of GDP most years. And yet something funny has happened in 2025, as the massive surge in data-center construction associated with the AI revolution has contributed more to GDP growth than consumers getting out and shopping. This isn’t to say that data-center construction is two-thirds of GDP, but that it’s growing faster than the average consumer, who is showing signs of fatigue amid a stagnant labor market and a rising inflation backdrop.

    Apollo Global’s chief economist Torsten Slok has warned that inflation may resume its upward climb from the 2021 surge that kneecapped Klarna’s highest valuation, seeing a potential “inflation mountain” looming ahead. On the other hand, consumers who are strapped for cash may be turning more to BNPL services, as LendingTree found 14% of U.S. adults who used the services to buy groceries in 2024 evolving into 25% the next year. Consumers may slow down, but rising inflation and even a recession could push them more into financing purchases with the help of BNPL services.

    3) Regulatory scrutiny

    Klarna came under scrutiny from the Consumer Financial Protection Bureau (CFPB) during the Biden Administration, which certainly favored stronger regulation than the CFPB under either Trump regime. Some Senators and state Attorneys General have urged the CFPB to take a stronger supervisory hand with BNPL firms, voicing concerns that vulnerable, low-income consumers were at risk of being targeted.

    The industry has fought back, with a trade group that included Klarna suing the CFPB at one point over “impossible” disclosure rules. As of 2025, the CFPB has deprioritized federal enforcement in BNPL, indicating a shift toward fragmented oversight, with expectations for more state-led regulatory actions and frameworks.

    Can the unicorn ride again?

    Over the past two years, the company has rebuilt with a focus on cutting losses, expanding into adjacent businesses like advertising, and working toward profitability. The IPO is expected to test investor appetite for fintechs that once commanded dizzying valuations but now face more traditional public-market scrutiny on margins and earnings.

    The listing, expected in New York later this year, will still mark one of the most significant European tech IPOs of the decade. Investors will be watching closely to see whether Klarna’s new chapter proves it can outgrow its BNPL roots — or whether once-hot fintechs will struggle to recapture their private-market shine.

    For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. 

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    [ad_2]

    Nick Lichtenberg

    Source link

  • IPOs are back. Where are the women?

    [ad_1]

    Investors are pouring money into initial public offerings like it’s 2021, with this season alone unleashing several new tickers, including FIG, BLSH, and soon, STUB. For some, the surge is a welcome sign of renewed optimism after tariff-related chaos in the spring threatened a promised IPO revival. 

    But an analysis of recent IPO-related filings shows that women leaders are largely missing from the boards and executive teams at the vast majority of new public companies, despite years of calls for more diversity in corporate leadership. The data may even be an early signal of future losses for executive women, as DEI, already facing a backlash, is abandoned or sidelined, especially in the tech industry. 

    Damion Rallis, cofounder of board data firm Free Float Analytics, combed through information about 61 companies that filed IPO-related documents in the first two weeks of August. He found that nearly 88% of the firms (most of which were in tech) had only one or no women on their board of directors, while 93% had only one or no women in their C-suite. Rallis is now calling this the “Bro-PO market,” and said his findings were “crazy.”

    “We’ve given up our ideals. We’ve just given up,” he said on Free Float’s Business Pants podcast.   

    Only seven of the 61 companies Rallis examined had two or more women on their boards, while only four listed two or more women executives. In total, women represented only 12% of the 349 directors and 11% of 205 executives identified in the filings. Stubhub listed one female executive on its team of five, and one female director on a board of seven. Bullish listed two executive leaders, both men, and one woman on its six-person board. 

    For reference, women represent about 30% of board members at Russell 3000 companies, according to recent studies, and 29% of C-suite roles, according to a 2024 McKinsey survey.  

    In recent years, corporate boards have made gender and racial diversity a central focus of recruitment efforts, especially after Nasdaq issued a rule that said listed companies must disclose their board gender and diversity statistics. That directive was set to expand: Eventually, it would have imposed minimum diversity requirements or asked companies to explain why their boards weren’t diverse. However, that effort was shut down in late 2024 by a federal appeals court that decided Nasdaq had overstepped its statutory authority when it set the policy. 

    In 2020, Goldman Sachs CEO David Solomon declared that “IPOs are a pivotal moment for firms,” as he described his bank’s then-landmark pledge not to take companies public if their boards were entirely male. But the company abandoned that promise this year, citing “legal developments related to board diversity requirements,” my colleague Emma Hinchliffe reported in February. “We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach,” Goldman told Fortune at the time. 

    The Goldman Sachs rollback was one of many widely seen as a response to a long-running war on “woke” corporate policies that’s now backed by President Trump.  

    Despite these policy shifts, most investors have come to expect companies to form diverse boards and C-suites as part of optimizing a leadership team. The bar is lower for “starter boards” of newly IPO’d companies, says Matt Moscardi, cofounder of Free Float Analytics. But he says he was still surprised that today’s fledgling public companies are not even nodding at market norms. Instead, they’re leaving out 50% of humanity. 

    “You’d expect them to look and say, ‘Well, you’re going to IPO, what do other publicly traded companies look like?’” Moscardi told Fortune, “and there is basically no effort to do that.” 

    Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world. Explore this year’s list.

    [ad_2]

    Lila MacLellan

    Source link

  • Why Fast Fashion Giant Shein Is Going Public in London Instead of New York

    Why Fast Fashion Giant Shein Is Going Public in London Instead of New York

    [ad_1]

    Shein is now headquartered in Singapore but still has deep Chinese ties. Xavi Torrent/Getty Images for SHEIN

    Shein, the Chinese-founded fast-fashion retailer once valued at $100 billion, is looking to file with U.K. regulators to list an initial public offering on the London Stock Exchange, the Financial Times reported earlier this month. Six months ago, Shein filed paperwork with the U.S. SEC to go public in New York. Pressured by political pushback and regulatory scrutiny around companies with Chinese ties, the e-commerce giant has decided to list elsewhere.

    While Shein is now headquartered in Singapore, it was originally founded by Chinese billionaire Sky Xu in Nanjing, China in 2008 and is still heavily reliant on Chinese suppliers. Upon news of Shein’s potential New York IPO, U.S. Senator Marco Rubio, a Republican from Florida, reached out to the SEC to urge it to block the listing unless the company was willing to cough up disclosures about forced labor in its supply chain, ties to the Chinese government and other ethics concerns.

    “The amount of disclosure asked for was above and beyond, and would put a lot of pressure on any company, let alone foreign ones,” Christopher Mora, head of capital markets at Centri Business Consulting, told Observer.

    Since then, Shein has hired Rubio’s former chief to lobby on the company’s behalf in a bid to soften its regulatory risks in the U.S. Shein insists it has “zero tolerance” for the use of forced labor in its supply chain and claims it requires all suppliers to source material from pre-approved origins. However, likely sensing a tough road ahead with U.S. regulators, the company now plans to file a confidential prospectus with the Financial Conduct Authority (FCA), the U.K.’s securities exchange regulator.

    A London listing won’t solve Shein’s headaches

    Rubio has already written to the U.K. chancellor, the British title for their finance minister, urging them to look deeper into Shein’s China ties. Many in the British business and regulatory community have expressed similar concerns.

    Shein’s roots in the world’s second-largest economy is not the only reason for its scrutiny. To ship inventory to the U.S. and U.K., Shein takes advantage of a “de minimis” loophole, created to allow people to bring souvenirs or small-value items into the country without paying import tariffs. Unlike other major retailers, Shein (and Temu) notoriously ship clothes in countless small packages, each less than the threshold to which an import tariff would apply. This controversial approach allows it to skip heavy taxes that domestic retailers don’t get to avoid, making it hard for them to compete.

    However, the U.K. may not have the luxury to complain. At a $64 billion valuation currently, Shein’s IPO would be larger than every London Stock Exchange listing since 2018, combined. This is even after Shein’s valuation was cut down from the $90 billion it was targeting when filing to go public in New York. The London Stock Exchange is a lot smaller than its New York counterpart. It has a total size of around $3 trillion, approximately the size of Microsoft, just one of the several trillion-dollar companies listed publicly in the U.S. Amidst ongoing elections, Shein has won the support of the U.K. Labour Party leaders, who are predicted by pollsters to come into power after the election.

    Why Fast Fashion Giant Shein Is Going Public in London Instead of New York

    [ad_2]

    Shreyas Sinha

    Source link

  • As Shein’s IPO approaches, what will it mean for the ultra-cheap online retailer and for London?

    As Shein’s IPO approaches, what will it mean for the ultra-cheap online retailer and for London?

    [ad_1]

    Shein is kind of a big deal.

    In 12 years, the Chinese fast-fashion behemoth has exploded in size and now reaches over 150 countries. Its $5 dresses and accessories have caught the attention of younger shoppers looking to get more for less. 

    As it has grown, Shein has been in the crosshairs of American lawmakers. It initially planned to list its shares in the U.S., but it has since shifted its gaze to London, where it reportedly plans to float in the coming weeks. 

    Although Shein has not officially announced a date, its eventual IPO would be London’s most high-profile in years.

    What do we know about the IPO?

    It is coming very soon and it’s probably going to happen in London.

    Singapore-headquartered Shein is preparing to file a prospectus for its IPO that could value it at around £50 billion ($63.7 billion), Sky News reported Sunday. It could go public as early as this week. 

    Shein was preparing to list in the U.S., but ran into problems over the company’s alleged use of cotton from China’s Xinjiang region, where ethnic minorities, including the Uyghurs, live. The company has argued that it has a zero-tolerance policy for forced labor.    

    Its environmental practices have also been a cause for concern for countries that see them as unsustainable. 

    The online retailer tried to swiftly move on by courting a London listing, but may find these issues continue to make life awkward, AJ Bell’s Russ Mould suggests. 

    “Shein may find the glare of a public market listing uncomfortable given concerns about its governance, supply chain and business practices,” he said in a note Monday. 

    Shoppers queuing up at a Shein pop-up inside Forever 21 in Ontario, California.

    Allen J. Schaben—Los Angeles Times/Getty Images

    Why does it matter?

    Shein’s float has been long coming, and could be one of the most significant ever in the retail sector. It would certainly be among London’s biggest IPOs in recent memory, following commodities company Glencore’s in 2011. 

    In 2022, the company was valued at $100 billion, overtaking the combined size of H&M and Zara parent Inditex. 

    That’s been driven by Gen Z’s strong appetite for low-cost clothing and Shein’s savvy use of social media to appeal to users—whether in the U.S., U.K., or elsewhere.

    “Shein has succeeded in tapping into the rising popularity of online-only fashion retailers among young British women and it is now a key competitor in the world of young fast fashion in the U.K.,” Tamara Sender Ceron, the associate director of fashion and retail at market intelligence firm Mintel said in a 2022 report. 

    What would Shein’s IPO mean for London?

    If Shein lists in London, it could not come at a better time for the U.K. markets. Over recent years, a number of companies have either delisted from the London Stock Exchange or chosen to list elsewhere, in large part over concerns about being undervalued. Arm, the British chip company, is a particularly striking example of a major IPO that could have ideally been London’s, but wasn’t. 

    Keen to avoid this happening again, officials from the U.K.’s opposition Labour Party—widely expected to win the country’s general election next month—recently held talks with Shein’s executive chairman Donald Tang in the hopes of nudging the company to list there, The Times of London reported. 

    Given its size, the company’s IPO would bring London a much-needed vote of confidence, but that doesn’t mean Shein would no longer be scrutinized, with Britain’s lawmakers recently also calling for the company to be probed. 

    Of course, London is calling but Shein isn’t guaranteed to answer. “The question for U.K. traders is will this [Shein filing its prospectus] lift the spirits of the FTSE 100, after the index fell 0.77% last week. If this does happen this week, then it would take London a step closer to being Shein’s IPO destination,” Kathleen Brooks, research director at XTB, said in a note. 

    As for Shein itself, whether you’re a fan of the fast fashion firm or not, there’s no disputing that its listing will be a major event in retail. If its IPO goes smoothly, it could help the company gain more credibility among investors, regulators and buyers, not to mention further growth capital. 

    Whether that will be enough to fend off the bad press and let its low-cost fashion do the talking remains to be seen. 

    [ad_2]

    Prarthana Prakash

    Source link

  • Bill Ackman’s US IPO Plan Solidifies His Shift Away From Traditional Hedge Funds

    Bill Ackman’s US IPO Plan Solidifies His Shift Away From Traditional Hedge Funds

    [ad_1]

    Bill Ackman’s investment style has always been unique by hedge fund standards. Bryan Bedder/Getty Images for The New York Times

    Billionaire investor Bill Ackman’s Pershing Square Capital Management is setting the stage for an initial public offering of its new U.S.-based fund focused on retail investors, the Wall Street Journal reported today (May 31). With around 80 percent of his assets under management already tied up in a publicly traded closed-end fund in Europe, this marks another milestone in Ackman’s breaking from being a traditional hedge fund manager.

    The new fund, called Pershing Square USA (PSUS), was announced in February via Ackman’s X account and a fund prospectus. Ackman’s dipping into U.S. retail investors could be him trying to take advantage of his growing media spotlight—the 58-year-old investor has 1.2 million followers on X and gained significant press for his $2.3 billion victory from betting on a 2020 market crash. The fund prospectus stated that Pershing Square’s “brand-name profile and broad retail following will drive substantial investor interest.”

    Hedge fund IPOs are rare though not unusual; Man Group and Blue Owl are two known alternative asset managers that are publicly traded. Ackman’s PSUS IPO would likely be the largest and most prominent IPO of its kind in many years.

    Ackman founded Pershing Square LP in 2004 as a traditional hedge fund, which took concentrated equity bets and charged close to an industry-standard “2 and 20” fee (2 percent management fee on assets under management and 20 percent on investment returns).

    However, in 2014, Ackman introduced a new investment vehicle called Pershing Square Holdings (PSH), a closed-end fund based in Guernsey (an island in the English channel that has become a popular place of incorporation for high net-worth funds) and publicly traded in Amsterdam and London. Unlike traditional hedge funds, investors cannot simply pull their money out from a closed-end fund and the fund charges “1.6 and 16” rather than the traditional “2 and 20.”

    PSH’s success has been less than ideal, though. This fund, which raised $3 billion in its 2014 IPO, has consistently traded at a discount to its net asset value, currently managing about $14.6 billion with a market value of approximately $9 billion. This means Pershing Square cannot raise more capital efficiently in the fund, as selling or issuing shares at a price lower than the net asset value would dilute shareholders.

    As PSH holds around 80 percent of the assets Ackman manages, this is especially stressful for the company’s future. A 2024 presentation revealed, “In 2023, we thoroughly examined the options for a U.S. listing to increase the number of investors who can own PSH.” Essentially, Pershing Square’s leadership felt that, if U.S. retail investors could buy PSH shares, which they are currently not allowed to do, they would give the company a higher valuation.

    PSUS is a reflection of that sentiment; it’s essentially a U.S. version of PSH. It begs the question of why Ackman sought to introduce PSH in European markets in the first place; Bloomberg’s finance columnist Matt Levine believes the answer is likely that the U.S. has stronger regulations on how publicly traded investment funds are allowed to use hedge fund strategies, such as leverage, derivatives and short-selling.

    All in all, this would be Ackman’s third IPO. He previously launched Pershing Square Tontine Holdings, the largest-ever SPAC that went public in July 2020 with the intention to acquire privately-held businesses. It liquidated and shut down two years later.

    With PSUS, Ackman is further solidifying himself as more of an asset manager, overseeing mostly publicly traded closed-end fund investments, than a typical hedge fund manager. Ackman has always been unique in his style: while traditional hedge funds, like Citadel or Millennium, have become renowned for making dozens of investments, quickly opening and closing out of positions, Ackman prefers to hold long-term activist positions on only a handful of companies.

    Bill Ackman’s US IPO Plan Solidifies His Shift Away From Traditional Hedge Funds

    [ad_2]

    Shreyas Sinha

    Source link

  • Trump’s social media company rises 16% in first day trading gains, but the stock could fall 95%, says an IPO expert

    Trump’s social media company rises 16% in first day trading gains, but the stock could fall 95%, says an IPO expert

    [ad_1]

    Shares of Donald Trump’s social media company rose about 16% in the first day of trading on the Nasdaq, boosting the value of Trump’s large stake in the company as well as the smaller holdings of fans who purchased shares as a show of support for the former president.

    Trump Media & Technology Group Corp. merged Monday with a blank–check company called Digital World Acquisition Corp. Trump Media, which runs the social media platform Truth Social, has now taken Digital World’s place on the Nasdaq stock exchange.

    Shares closed at $57.99, up 16.1%, giving the company a market value of $7.85 billion. At one point the stock was up about 59%. Trump holds a nearly 60% ownership stake in the company, now worth about $4.6 billion.

    Many of those investing in Trump Media are small-time investors either trying to support Trump or aiming to cash in on the mania, instead of big institutional and professional investors. Those shareholders helped the stock of Digital World more than double this year in anticipation of the merger going through.

    Truth Social launched in February 2022, one year after Trump was banned from major social platforms including Facebook and X, formerly Twitter, following the Jan. 6 insurrection at the U.S. Capitol. He’s since been reinstated to both but has stuck with Truth Social.

    On Truth Social Tuesday, users were posting about being shareholders or seeking tips on how to buy shares.

    One user urged conservatives to “get behind the DJT stock and sent it over $100 per share” to “drive the liberals insane!” Another declared: “Get yourself a piece of #DJT stock if your a true MAGA supporter.”

    A day earlier, Trump Media CEO Devin Nunes, a former House Republican, said, “As a public company, we will passionately pursue our vision to build a movement to reclaim the Internet from Big Tech censors.”

    Despite the enthusiasm, investors could experience a bumpy ride. For one, they’re betting on a company with uncertain prospects of turning a profit. Trump Media lost $49 million in the first nine months of last year, when it brought in just $3.4 million in revenue and had to pay $37.7 million in interest expenses.

    In a recent regulatory filing, the company cited the high rate of failure for new social media platforms, as well as its expectation that its operations will lose “for the foreseeable future” as risks for investors.

    Research firm Similarweb estimates that Truth Social had roughly 5 million active mobile and web users in February. That’s far below TikTok’s more than 2 billion and Facebook’s 3 billion — but still higher than other “alt-tech” rivals like Parler.

    However, Trump Media has said it doesn’t keep track of some numbers that rivals use as key measures of their performance, such as average revenue per user or active user accounts. It says it wants to focus on the long-term instead of “short-term decision-making.”

    For that long term, though, skeptics see struggles ahead for a company that’s estimated to have far fewer users than rivals in a business where gaining a critical mass is key.

    “I think there is a possibility of, sooner or later, the stock price falling by 95%,” said Jay Ritter, a professor and expert on initial public offerings of stock at the University of Florida’s Warrington College of Business.

    Brian Dunn, director of the Institute for Compensation Studies at Cornell University, compared the fervor for Trump Media shares to the meme stock craze that boosted shares of companies such as GameStop and AMC Entertainment to exorbitant heights in 2021.

    “Like any meme stock or fad, as long as there’s a greater fool to buy you out for what you paid for it, than you can continue to prosper,” Dunn said, warning that small investors “could end up holding the bag when the music stops.”

    On Monday, Trump told reporters that “Truth Social is doing very well. It’s hot as a pistol and doing great.” On Tuesday, he posted “I LOVE TRUTH SOCIAL, I LOVE THE TRUTH!,” on the platform.

    The company, which is based in Florida, said in a recent regulatory filing that it “is highly dependent on the popularity and presence of President Trump.” Trump Media has acknowledged that there are risks associated with Trump’s outsized influence.

    If the former president were to limit or discontinue his relationship with the company for any reason, including due to his campaign to regain the presidency, the company “would be significantly disadvantaged,” it said in a filing ahead of the merger with Digital World.

    Acknowledging Trump’s involvement in numerous legal proceedings, the company noted that “an adverse outcome in one or more” of the cases could negatively affect Trump Media and Truth Social.

    Another risk, the company said, was that as a controlling stockholder, Trump would be entitled to vote his shares in his own interest, which may not always be in the interests of all the shareholders generally.

    Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free.

    [ad_2]

    The Associated Press

    Source link

  • Reddit is preparing to sell shares to the public. Here’s what you need to know

    Reddit is preparing to sell shares to the public. Here’s what you need to know

    [ad_1]

    SAN FRANCISCO — Reddit, that vast, lively and sometimes chaotic repository of internet discussion, projected Monday a price for its initial public offering stock that values the 18-year-old social media platform at up to $6.4 billion.

    The offering also makes Reddit one of the first online companies to offer shares to its contributors — the “Redditors” who comment on its boards and the moderators who manage them. That’s a break with traditional IPO practice, in which initial shares are typically sold to institutional investors and fund managers who then begin trading the stock on the open market. Adding the company’s users to the mix could make for a much livelier offering, and not necessarily in a good way.

    It could be an interesting ride.

    Reddit plans to list 22 million shares at a price between $31 and $34, according to the latest version of the IPO prospectus it filed Monday with the Securities and Exchange Commission. The company stands to take in between $473.6 million and $519.4 million from the sale of roughly 15.3 million shares.

    Reddit’s existing investors will sell an additional 6.7 million shares in the offering, raising between $208.4 million and $228.6 million for their own portfolios. Reddit itself won’t benefit from those sales.

    Per standard IPO operating procedure, those shares will typically end up with a mix of mutual funds, hedge funds and other major investment groups who will then hawk them to their investor customers.

    Reddit also plans to sell up to 1.76 million shares — roughly 8% of the total offering — to a mix of certain board members and so-called “friends and family members” of certain board members and employees. Plus, of course, the moderators and Redditors who make Reddit what it is.

    The wild card here is that these stock purchasers, who will pay the IPO price for their shares, won’t be bound by “lock-up agreements” that require company officers and employees to hold their shares for a fixed period of time — potentially as long as six months. That means Redditors and moderators will be able to sell their shares immediately if they wish.

    For starters, think share-price volatility.

    While it’s not clear from the perspective just how many of those 1.76 million shares will end up in the hands of Reddit users, the number is likely large enough for those users to exert meaningful pressure on Reddit’s share price. The main concern is that a surge of demand for shares that aren’t locked up could create a sudden run-up in the share price, followed by an equally sharp decline once the initial excitement wears off and short-sellers — investors who effectively place bets that a stock will decline — begin to gather.

    That’s pretty much what happened with Robinhood Markets, which operates a simple-to-use and low cost trading platform aimed at novice investors that also offered IPO shares to its users. The company’s stock opened at $38 on its first day of trading in July 2021, shot up to $85 five days later, then plunged back to roughly $40 after just six weeks. Robinhood closed Monday at $16.86.

    “Mishandling this process could result in (Reddit) alienating their most ardent supporters, potentially turning them into critics,” warned Deiya Pernas, co-founder of Pernas Research.

    But Don Montanaro, president of the trading platform Firstrade, argues that Reddit may not have had much choice but to go this route. “They’ve been running a business where their clients, their users, are their product,” he said. “It’s a case of, ‘What else could we do? This is who we are, how could we not offer this to these people?’”

    If you don’t already have a Reddit account, you’re probably out of luck. The offering is only available to users who had established accounts as of January 1, 2024.

    Beyond that, shares will be distributed to Redditors and moderators via a formula that accounts for their measurable contributions to the discussion boards. Redditors with high “karma” scores — a measure of their contributions to the community, such as posts that other Redditors find useful, amusing or insightful — will be grouped into six priority tiers for access to the stock offering.

    Moderators who have taken significant numbers of “moderator actions” will likewise be sorted into those tiers. Such actions can include anything from designing a new discussion group — aka a “subreddit” in the jargon of the site — to removing spam or duplicate posts, to enforcing subreddit rules. Moderators will also be rated on membership trends in their subreddits.

    None of this guarantees an individual a chance at buying shares if demand exceeds supply, although Reddit emphasizes in the prospectus that anyone who isn’t awarded a shot at purchasing shares can join a waitlist.

    [ad_2]

    Source link

  • Reddit aims to raise up to $748 million in high-profile IPO that other ventures—and members of the subreddit WallStreetBets—will watch closely

    Reddit aims to raise up to $748 million in high-profile IPO that other ventures—and members of the subreddit WallStreetBets—will watch closely

    [ad_1]

    Reddit Inc. and its investors are seeking to raise as much as $748 million in what would be one of the biggest initial public offerings so far this year, according to people familiar with the matter.

    The social media platform and some of its current shareholders plan a sale of 22 million shares for $31 to $34 each, said the people, who asked not to be identified because the information wasn’t public yet. The company was seeking a valuation of as much as $6.5 billion in the listing, Bloomberg News has reported.

    The people said the company is setting aside about 1.76 million shares in the IPO to be bought by users and moderators who created accounts before Jan. 1. Those shares won’t be subject to a lockup period, meaning the owners can sell them on the opening day of trading, according to Reddit’s filing in February with the US Securities and Exchange Commission.

    A representative for Reddit declined to comment.

    Reddit’s Valuation

    Reddit’s more than two-year slog to listing reflects the ups and downs of the market, beginning with its initial confidential filing in 2021, when IPOs on US exchanges set an an all-time record of $339 billion, according to data compiled by Bloomberg. Reddit raised funds that year valuing it at $10 billion, and Bloomberg News reported the following year that it could be valued at as much as $15 billion in an IPO.

    Meanwhile, IPOs in the US tumbled, reaching only $26 billion last year, the data show. In January, Bloomberg News reported that Reddit was weighing feedback from early meetings with potential IPO investors that it should consider a valuation of at least $5 billion.

    The company is a high-profile addition to the year’s roster of newly and soon-to-be public companies. The biggest of those listings was the $1.57 billion offering by Amer Sports Inc. in January. Astera Labs Inc., a software maker focused on artificial intelligence, said in a filing Friday that it would seek up to $534 million in its IPO, which will likely proceed Reddit’s.

    Read More: Intel-Backed Astera Seeks $534 Million in IPO With AI Appeal

    Reddit’s listing will be watched closely by IPO candidates such as Microsoft Corp.-backed data security start up Rubrik Inc. and health-care payments company Waystar Technologies Inc. Their deliberations come after a quartet of US listings led by semiconductor designer Arm Holdings Plc’s $5.23 billion offering in September failed to ignite a lasting rebound in the market.

    Shrinking Losses

    Founded in 2005, Reddit averaged 73.1 million daily active unique visitors in the fourth quarter, according to its February filing. The company reported a net loss of $91 million on revenue of $804 million in 2023, compared with a net loss of about $159 million on revenue of $667 million a year earlier.

    Reddit’s largest shareholder is Advance Magazine Publishers Inc., part of the Newhouse family publishing empire that owns Conde Nast, which bought Reddit in 2006 and spun it out in 2011.

    Reddit said its millions of loyal users and moderators pose risks as well as a benefit for the company. Redditors have a historically combative relationship with the site, launching revolts over everything from racism on the platform to executives’ staffing decisions.

    Meme Stocks

    Thousands of members of the WallStreetBets forum — which boasts around 15 million users and helped popularize meme stocks like GameStop Corp. — voted to boost a forum post about shorting Reddit’s stock when it begins trading. Their reasons varied from the company’s lack of profitability to competitive concerns.

    The IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to Reddit’s filing. The company plans for its shares to trade on the New York Stock Exchange under the symbol RDDT.

    Reddit co-founder and Chief Executive Officer Steven Huffman said in a signed letter included in the filing that the company has many opportunities to grow both the platform and the business.

    “Advertising is our first business, and advertisers of all sizes have discovered that Reddit is a great place to find high-intent customers that they aren’t able to reach elsewhere,” Huffman said. “Advertising on Reddit is rapidly evolving, and we are still in the early phases of growing this business.”

    AI Licensing

    Reddit said it’s in the early stages of allowing third parties to license access to data on the platform, including to train artificial intelligence models. The company said that in January it entered into data licensing arrangements with an aggregate contract value of $203 million and terms ranging from two to three years. It expects a minimum of $66.4 million of revenue from those agreements this year, according to the filing.

    Reddit also has announced a deal with Alphabet Inc.’s Google, allowing Google’s AI products to use Reddit data to improve their technology. Large language models often need vast troves of human-generated content to improve.

    Huffman owns shares giving him 3.5% of the voting power. That includes Class B shares that will have 10 votes each compared with one each for the Class A shares to be sold in the IPO, the filing shows. Huffman also has a voting proxy agreement with Advance.

    Other large shareholders include Chief Operating Officer Jennifer Wong, as well as FMR LLC and entities affiliated with OpenAI Chief Executive Officer Sam Altman, Tencent Holdings Ltd., Vy Capital and Quiet Capital and Tacit Capital, according to the filing.

    Huffman’s fellow co-founder, venture capitalist Alexis Ohanian, isn’t listed among the investors with stakes of 5% or more and isn’t named elsewhere in the filing.

    — With assistance from Priya Anand, Ryan Gould, and Katie Roof

      Subscribe to the Eye on AI newsletter to stay abreast of how AI is shaping the future of business. Sign up for free.

      [ad_2]

      Amy Or, Bloomberg

      Source link

    1. Shein, the fast-fashion giant famous for $2 T-shirts, is exploring a London IPO after New York was too tough, sources say

      Shein, the fast-fashion giant famous for $2 T-shirts, is exploring a London IPO after New York was too tough, sources say

      [ad_1]

      Fast-fashion company Shein is considering the possibility of switching its initial public offering to London from New York because of hurdles to the listing in the US, according to people with knowledge of the matter.

      Shein, which was founded in China but is now headquartered in Singapore, is in the early stages of exploring the London option as it has judged it unlikely that the US Securities and Exchange Commission will approve its IPO, the people said, asking not to be identified discussing confidential information. 

      Shein is still working on its application to list in the US as its preferred location, the people said. It would need to file a new overseas listing application with Chinese regulators if it decided to switch to London or elsewhere, they added. Other venues including Hong Kong or Singapore may also be considered, two of the people said.

      A representative for Shein declined to comment.

      A listing in London would be a potential boon to the beleaguered market, after one of the worst years for IPOs in its modern history. Just about $1 billion was raised in the UK via IPOs last year, the lowest level in decades, according to data compiled by Bloomberg. 

      The UK is also struggling to stem an exodus of firms to the US and elsewhere. Chip designer Arm Holdings Plc spurned London for a New York IPO last year even after the UK government lobbied for a domestic listing by the Cambridge, England-based company. Already-listed companies are migrating abroad, with TUI AG shareholders voting earlier this month to delist from the London Stock Exchange and move trading primarily to Germany.

      Small and Rare

      US IPOs by Chinese companies have mostly been small and rare in the years since Didi Global Inc. was forced off the boards in New York, part of a crackdown that essentially closed the market to first-time share sales by Chinese firms. Amer Sports Inc.’s $1.6 billion offering in February was the biggest China-backed IPO to tap the US market since Didi raised $4.4 billion in 2021, and the first to raise more than $200 million in that time.

      Shein has been subject to scrutiny from the US, with Senator Marco Rubio among those asking the SEC to block its listing, saying the company needs to disclose more about its operations in China. Last year, a member of the US Congress asked for a probe into Shein’s cotton supply from Xinjiang. US-China trade tensions have also been simmering for years.

      A pioneer of ultra-fast fashion with items such as shirts and swimsuits for as little as $2, Shein filed last year for a US IPO aiming for a valuation of $80 billion to $90 billion, people familiar with the matter said at the time. Private trades in late 2023 valued the company much lower, at about $50 billion. 

      Subscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up for free.

      [ad_2]

      Pei Li, Dong Cao, Vinicy Chan, Bloomberg

      Source link

    2. Birkenstock stumbles in its stock market debut as Wall Street trades in its wingtips for sandals

      Birkenstock stumbles in its stock market debut as Wall Street trades in its wingtips for sandals

      [ad_1]

      Birkenstock shares are tumbling as the stock makes its debut on the New York Stock Exchange as Wall Street trades in its wingtips for sandals for a day

      ByMICHELLE CHAPMAN AP business writer

      October 11, 2023, 9:13 AM

      Birkenstock CEO Oliver Reichert visits the New York Stock Exchange trading floor prior to his company’s IPO, Wednesday, Oct. 11, 2023. (AP Photo/Richard Drew)

      The Associated Press

      NEW YORK — Birkenstock shares are stumbling in their debut on the stock market as Wall Street trades in its wingtips for sandals for a day.

      The 249-year-old German maker of upmarket sandals set a price of $46 per share for its initial public offering of stock, valuing the company at $8.64 billion. The stock opened for trade at $41, which was below the range of $44 to $49 it had been expected to price just a week ago.

      Birkenstock is listed on the New York Stock Exchange under the “BIRK” ticker symbol. Birkenstock Holding Ltd. sold about 10.8 million shares in the offering, raising about $495 million. Its shareholders sold an additional 21.5 million shares.

      The company’s footwear was first cobbled together by Johann Adam Birkenstock in Germany in 1774. The sandals have long been derided as the antithesis of high fashion but have a cult following and this year got a plug in the blockbuster film “Barbie.”

      “Through the strong reputation and universal appeal of our brand — enabling extensive word-of-mouth exposure and outsized earned media value — we have efficiently built a growing global fanbase of millions of consumers that uniquely transcends geography, gender, age and income,” Birkenstock said in a recent regulatory filing with the Securities and Exchange Commission.

      Birkenstock’s formula for success began with a view that humans are intended to walk barefoot. The company said in its filing that its footbed, which was developed in 1902, “represents the best alternative to walking barefoot, encouraging proper foot health by evenly distributing weight and reducing pressure points and friction.”

      Birkenstock makes all of its footbeds in Germany and assembles more than 95% of its products there. The remaining products are made elsewhere in the European Union.

      The company’s revenue has increased from 727.9 million euros ($771.7 million) in fiscal 2020 to 1.24 billion euros ($1.32 billion) in fiscal 2022.

      Birkenstock’s IPO will be the fourth to launch in the U.S. in the past month, following Arm Holdings, Klaviyo and Instacart. There were just 71 IPOs in the U.S. last year, the lowest number since 2009, according to Renaissance Capital.

      [ad_2]

      Source link

    3. Birkenstock set for stock market debut as Wall Street trades in wingtips for sandals

      Birkenstock set for stock market debut as Wall Street trades in wingtips for sandals

      [ad_1]

      Birkenstock is making its debut on the stock market as Wall Street trades in its wingtips for sandals for a day

      ByThe Associated Press

      October 11, 2023, 9:13 AM

      Birkenstock CEO Oliver Reichert visits the New York Stock Exchange trading floor prior to his company’s IPO, Wednesday, Oct. 11, 2023. (AP Photo/Richard Drew)

      The Associated Press

      NEW YORK — Birkenstock is making its debut on the stock market as Wall Street trades in its wingtips for sandals for a day.

      The 249-year-old German maker of upmarket sandals set a price of $46 per share for its initial public offering of stock, valuing the company at $8.64 billion.

      Birkenstock is due to start trading Wednesday on the New York Stock Exchange under the “BIRK” ticker symbol. Birkenstock Holding Ltd. sold about 10.8 million shares in the offering, raising about $495 million. Its shareholders sold an additional 21.5 million shares.

      The company’s footwear was first cobbled together by Johann Adam Birkenstock in Germany in 1774. The sandals have long been derided as the antithesis of high fashion but have a cult following and this year got a plug in the blockbuster film “Barbie.”

      Birkenstock’s IPO will be the fourth to launch in the U.S. in the past month, following Arm Holdings, Klaviyo and Instacart. There were just 71 IPOs in the U.S. last year, the lowest number since 2009, according to Renaissance Capital.

      [ad_2]

      Source link

    4. Arm Stock Rises Again

      Arm Stock Rises Again

      [ad_1]

      Arm Stock Is Rising Again. The Shares Are More Popular Than Tesla or Apple.

      [ad_2]

      Source link