Jim Cramer weighs in on the Endeavor IPO that never was, Wells Fargo's new CEO and Micron's earnings.
Like its fellow European online travel agency lastminute.com, eDreams Odigeo has been trying to diversify its revenue stream away from a reliance on flight-only sales. After all it’s a low-margin business and there’s only so far that can take you in today’s sophisticated consumer environment. EDreams’ big plan is its subscription service, called — somewhat […]
The UK’s Competition and Markets Authority back in February managed to get a handful of brands owned by Expedia Group and Booking Holdings to change how they displayed information to consumers searching for accommodation online. Essentially it was concerned about hate-selling through techniques such as hidden charges, and ordered them to sort it out. The […]
Jim Cramer weighs in on why Endeavor pulled its debut on the public markets.
Britain's Ben Ainslie and his new crew dominated the first event of SailGP's second season in Sydney, winning four out of five fleet races and then beating titleholders Australia in Saturday's high-speed head-to-head finale. Ainslie beat local hero Tom Slingsby and his Australian crew, who incurred a penalty at the start of their match race, which the event's organisers said was watched by thousands of spectators gathered around Sydney Harbour. This followed a series of five races between the seven teams competing in state-of-the-art F50 catamarans, which 'fly' above the water on hydrofoils, with Ainslie's crew clear leaders on points ahead of Slingsby's.
Tackling the twin peaks of the America's Cup and the high-octane SailGP racing circuit is part of Ben Ainslie's grand plan to create the world's leading sailing outfit. "It's a busy, intense schedule ... (but) ultimately we want to be the best sailing team in the world," INEOS-backed Ainslie told Reuters by telephone this week after practice racing. The catamarans, which "fly" above the water on hydrofoils, are an updated version of those used in the America's Cup in 2017 and have hit speeds of 50 knots (93 kms per hour).
Jim Cramer weighs in on why Endeavor pulled its debut on the public markets.
(Bloomberg) -- Wall Street saw 2019 as a harvest year, finally bringing the long-awaited public debuts of many of the hottest startups -- and the healthy fees and deal prestige that came with them.It hasn’t gone as planned.Fitness startup Peloton Interactive Inc. on Thursday became the latest major initial public offering to fall on its face, dropping 11% on its first day of trading. Hours later, Endeavor Group Holdings Inc. pulled its U.S. IPO after downsizing the listing.That trend -- most notable in the declines of ride-sharing giants Uber and Lyft, which have tumbled about 30% and 42%, respectively -- has accelerated in recent weeks. SmileDirectClub posted the worst opening trade for a big IPO in more than a decade and WeWork was forced to delay its listing because of tepid demand.The market flops underscore a common disconnect between valuations in public and private markets -- a reality check for banks that have long touted lofty appraisals to company founders in the hopes of being hired for their IPOs.Their incentive is clear: Public offerings of unicorns offer some of the fattest fees in banking, along with a chance to reward top clients and drum up trading activity. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among banks that are expected to split about $60 million in fees from helping Peloton raise $1.16 billion.But the high-profile misfires threaten to upset banks’ investor clients and stifle repeat business. They’ve also convinced some venture capital firms to plan more deals as direct listings, which don’t raise fresh capital and carry lower fees for the banks.“Underwriters do misprice stocks,” said Howard Mason, a bank analyst at Renaissance Macro Research. “The risk is when you get valuations bid up to a point that is unworkable for the public markets.”Uber, LyftThe price slumps may say less about the bankers’ skill than investors’ appetite for startups that have prioritized growth over profitability. Whatever the culprit, top IPO banks including Goldman Sachs, Morgan Stanley and JPMorgan have all stumbled on big-name deals.Uber Technologies Inc., Lyft Inc. and SmileDirectClub Inc. are all down more than 29% from their offer price. WeWork’s parent, We Co., was aiming for the second-biggest listing of the year at $3.5 billion. Instead, co-founder Adam Neumann has resigned as chief executive officer and the company will probably put off an IPO until at least next year, people familiar with the matter have said.As a group, this year’s IPOs have been lagging behind the market, climbing 6.5% from their offering prices on average, while the S&P 500 has gained about 19%.Fees from equity underwriting at 12 of the biggest global investment banks dropped 12% in the first half of 2019, driven by the IPO business, according to data from Coalition Development Ltd. That was a steeper drop than from debt underwriting or merger advisory, which also posted declines.Stock underwriting was never going to single-handedly reverse Wall Street’s fortunes, because it’s the smallest piece of the investment-banking business, which itself brings in less than equity or fixed-income trading. But the slump is adding to pain caused by lower trading activity and a dip in mergers and acquisitions.“We’re getting to the point where the industry is already consolidated, so now the big guys will have to think about a different business model,” Mason said.And it’s not the only area where the banks are having trouble pulling off transactions that make all sides happy. At least four junk-debt deals have been pulled this month, and several others had to ratchet up interest rates or dangle sweeteners to drum up investor demand.While misfires by brand names like Uber or Peloton steal headlines, smaller or lesser-known deals have been resilient, such as Datadog Inc. Most of the U.S. IPOs that have priced since the start of August have risen above their offering prices in the opening trade of their debut session, according to data compiled by Bloomberg.“It’s still a very profitable business for banks and will continue to contribute to results,” said Jason Goldberg, an analyst at Barclays Ltd.(Updates with Uber and Lyft declines in fourth paragraph.)\--With assistance from Drew Singer, Liana Baker, Crystal Tse and Peter Eichenbaum.To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Australian skipper Tom Slingsby has been stunned by the performance of SailGP newcomers Spain in practice ahead of his crew's title defence, which starts in Sydney Harbour on Friday. Spain joined the challengers for SailGP's second series when China dropped out late last year, taking on their futuristic F50 foiling catamaran in a race for a $1 million prize in the 2020 edition of sailing's equivalent of Formula One. "If you'd asked me before if the Spanish would be a contender I'd have said: 'no way'," Slingsby told Reuters by telephone after the first practice races for the craft, which 'fly' above the water on hydrofoils and are powered by 24 metre high 'wing' sails.
SailGP said on Thursday it had sold a minority stake to sports and entertainment group Endeavor in a deal valuing the fledgling sailing event backed by Oracle's billionaire founder Larry Ellison at $200 million. "Endeavor's partnership ... strengthens our position going into our second season and signals the projected long-term value of SailGP," its CEO Russell Coutts said in a statement.
European online travel agency group eDreams Odigeo has added hotels to its Prime membership service as it targets two million members by 2023, a fourfold increase from its current 450,000. The plans, revealed at an investor event in Barcelona on Tuesday, also show that the company wants to add new products and move into other […]
Barcelona-based online travel agency eDreams Odigeo has seen bookings take a dive across all its markets following the outbreak of the coronavirus. Not only is the disease causing problems across its China and Asian source markets, but in Italy — where 400 people have been infected — the company has also seen a significant dropoff. […]
The stock market fell this week amid a Trump impeachment inquiry and China trade news. Nike earnings, weak Micron guidance and IPO woes stood out.
Amid the warnings of public disorder, food shortages, and transport delays in the event of a no-deal Brexit, data flow disruptions might seem like a trivial thing to worry about. But given the interconnectedness of the European online world, it is worth considering just what kind of impact this might have, especially on the travel […]
(Bloomberg) -- Peloton Interactive Inc. fell as much as 15% in its stock market debut Thursday, becoming the latest in a long list of unprofitable tech-oriented start-ups to flop with public investors.The New York-based company, known for its high-end exercise bikes, joined highly anticipated listings from Uber Technologies Inc., Lyft Inc. and SmileDirectClub Inc. that failed to pop on the first day of trading for shareholders who bought in at the IPO price.The founder-led company was still able to raise more than $1.16 billion in its IPO, though. But the poor reception -- along with the recent disintegration of WeWork’s offering -- has spooked at least one other IPO candidate.Hollywood entertainment company Endeavor Group Holdings Inc. pulled its IPO Thursday, after cutting the size and price of the offering. It decided to delay the IPO after monitoring the rocky performance of Peloton, people familiar with the matter said.Peloton’s shares opened at $27 and closed down 11% from their offering price to $25.76 in New York trading, giving the company a value of $7.2 billion. The fitness startup sold 40 million shares for $29 each on Wednesday, after marketing them for $26 to $29.It marks the third-worst trading debut in 10 years in the U.S. for companies that have raised at least $1 billion, according to data compiled by Bloomberg.Peloton Chief Executive Officer John Foley said in an interview with Bloomberg Television that he had “some disappointment” about the reception but was confident in his company’s prospects.“It’s an interesting time in the markets,” Foley said. “There is anxiety. The markets are on edge.”The IPO makes the company fully funded and will help it focus on adding subscribers in the coming years, he said.Warning SignPeloton and WeWork haven’t been the only warning signs for IPO investors.While most of the 11 other companies that have gone public this month priced within or above their marketed range, the largest of them, SmileDirectClub Inc., is trading about 44% below its offer price in its $1.35 billion listing.Peloton -- like some others that have sagged since their debut -- has a dual-class share structure that gives top owners including its founder 20 votes for each share they own. Public investors only get one vote per share.Peloton’s debut also raises questions about investment banks that have touted high valuations to founders of startups that don’t stand up once investors get a look under the hood.“The risk is when you get valuations bid up to a point that is unworkable for the public markets,” said Howard Mason, a bank analyst at Renaissance Macro Research.Goldman Sachs Group Inc. and JPMorgan Chase & Co. led the offering. The shares trade on Nasdaq Global Select Market under the symbol PTON.Yoga, MeditationFounded in 2012, Peloton describes itself as the “largest interactive fitness platform in the world,” with more than 1.4 million members.It also has an app that shares its exercise programming with users who don’t own its hardware but are willing to pay a monthly subscription fee for the classes, which include yoga, meditation and strength training.Its basic “connected fitness” subscription costs $39 a month and the bikes start at about $2,000.Like many startups that have gone public this year, Peloton told investors that it will stay focused on growth rather than profitability, though it outlined a path to making money.“We totally understand the sentiment today,” Peloton Chief Financial Officer Jill Woodworth said in an interview. “As I’ve seen over the last couple of decades, there’s always been different periods of time when people focus on growth and when people focus on profitability.”While revenue has been steadily increasing, Peloton lost $196 million on sales of $915 million during the 12 months ended June 30, according to filings. That compared with a loss of $48 million on $435 million in sales during the same period a year earlier.Growing BaseIts growth depends on continuing to expand its subscriber base in an increasingly competitive field while keeping current customers.The U.S. is one of the largest markets for connected fitness in the world and Peloton recently expanded into others high on that list: Canada, the U.K. and Germany. Investors are watching whether the company’s success in the U.S can be replicated elsewhere.Otherwise, Peloton would have to empty out half the gyms in the U.S. to sign up enough customers to justify its valuation, New York University Stern School of Business professor Aswath Damodaran said in an interview.“The core business is good, but at $27 we’re setting it up for failure,” he said. “That’s the danger when the market sets expectations too high.”(Updates with new description of the company in third paragraph.)\--With assistance from Julie Verhage, Crystal Kim and Michelle F. Davis.To contact the reporters on this story: Crystal Tse in New York at ctse44@bloomberg.net;Hailey Waller in New York at hwaller@bloomberg.net;Jason Kelly in New York at jkelly14@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, ;Mark Milian at mmilian@bloomberg.net, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.