What’s Going On Here?There are two highly anticipated initial public offerings (IPO) expected to hit the UK’s stock market as soon as this month, and investors are hoping they get exactly what they ordered. What Does This Mean?First up, Trustpilot: the Danish customer review platform is set to sell at least a quarter of its shares, aiming to value the entire business at $1.4 billion. And it looks like some of the world’s biggest investors rate the opportunity very highly indeed, with Fidelity and BlackRock already having promised to buy in.
Then there’s Amazon-backed Deliveroo, which is expected to be worth around $10 billion after its IPO. Investors keen on profitable companies might be put off by last year’s $309 million loss, sure, but others might give the food delivery company credit for having brought that figure down from a $440 million loss in 2019. Why Should I Care?For markets: Investors aren’t as powerful as they used to be.
Now the UK’s greenlit a more flexible IPO structure, investors in some British companies are going to have to get used to “dual share classes”, which give founders and managers more control than the average investor. They’re already common among US firms like Alphabet, Snap, and Berkshire Hathaway, and now it’s Deliveroo’s turn to try them on for size: the company’s founder will have 20 times the power per share than its new shareholders for the first year.
The bigger picture: China’s getting stricter.
While UK regulators giveth, Chinese regulators taketh away: ecommerce giant JD.com is all set to cancel the mooted $3 billion IPO of its financial services business, according to reports on Monday. China’s crackdown on internet-based finance firms also hit Alibaba’s Ant Financial last year, and it’s starting to make other companies reconsider if they really want to open themselves to scrutiny by going public too. | 