🐜 The biggest IPO ever: squashed

Wednesday, November 4, 2020 by Snacks
_Ant Group, you shall not pass_

Ant Group, you shall not pass

Yesterday’s Market Moves
Dow Jones
27,480 (+2.06%)
S&P 500
3,369 (+1.78%)
Nasdaq
11,161 (+1.85%)
Bitcoin
$13,771 (+2.35%)

Hey Snackers,

The election’s been keeping us on our toes, as the race and several key swing states hadn’t been called as of late last night. Snacks gotta sleep, too.

Markets jumped up as Americans headed to the polls yesterday — must've been all the sugar from the stress snacking.

Stop

1. Ant, the biggest IPO ever, shockingly gets squashed last-minute

Well, that was unexpected... Ant Group is the Chinese fintech giant that was supposed to go public tomorrow in Shanghai and Hong Kong. Think of Ant's Alipay app as a Financial Franken-App: it offers every money service imaginable — from payments to loans to insurance and investing (all in one).

  • Alipay has over 1B users, making it the biggest financial app in the world. That's 3X the number of Paypal users and 3X the US population.
  • Ant was on track to raise over $34B in its IPO, which would make it the largest ever. Then things got weird...
  • The IPO was suspended due to vague regulatory reasons that disqualified it from listing on the Chinese market.

Can I get a refund?... Ant had already raised big money from institutional investors who subscribed to its IPO. These VIPs — like mutual funds and brokerages — are the ones who actually buy the stock "initially" during its Initial Public Offering (before it's available to the rest of us). If the stock price goes up when shares hit the market, the VIPs make money. Ant apologized to investors and plans to return the $$$ it collected.

THE TAKEAWAY

Politics is a market risk... We don't really know why regulators squashed Ant, but the Chinese government's controlling-ness is likely behind it. Alibaba (aka: the Amazon of China) saw its stock drop 8% yesterday because it owns 33% of Ant. In its own IPO papers, Alibaba said that changes in the Chinese government's policies could hurt its biz. That seems to be proving true for Ant, too.

WePark

2. Reef, the WeWork of parking lots, raises $700M to dish out mobile kitchens

Nailed it with the name change... A one-syllable word, and the VC cash comes flooding in. Reef, formerly called ParkJockey, just raised an eye-popping $700M to turn underused parking lots into “neighborhood hubs.” Reef leases and manages lots, providing the hardware, software, and electricity needed to transform them into something... less boring.

  • Proximity-as-a-service: Reef wants to bring delivery-only kitchens, health clinics, and retail pop-ups to your neighborhood lot.
  • It's kind of like WeWork, minus the kombucha on tap and the controversy. Makes sense (or not at all) that WeWork investor SoftBank led this deal.

If you can dream it... you can disrupt it. Reef started as a "disruptor of parking lots" (whoa) with its management business. Now it's a real estate play with 4.8K locations, and plans to grow to 10K with the fresh $$$. Its big focus:

  • Ghost kitchens: Restaurants like BurgerFi are using trailers/shipping containers in Reef's lots to dole out deliveries faster.
  • Reef has over 100 kitchens in North America, and expects they'll make up “a significant part” of non-parking sales.
THE TAKEAWAY

Mobility is power... You've probably noticed more "For Lease" signs on Main Street. Brick-and-mortar shops are sadly shuttering because they can't afford rent when sales are barely coming in. Over 100K restaurants have closed since the first COVID shutdowns. Mobile rental units could give restaurants the flexibility to stay afloat and test digital concepts — without the burden of running a full-on storefront.

What else we’re Snackin’

  • Giggy: Uber sent an email late last night saying that Prop 22 passed in CA, which would represent a huge win for ride-sharing and food delivery companies (no more emails).
  • Cushy: Online furniture company Wayfair saw sales soar 66% last quarter — the pandemic "House Hype" is still going strong.
  • iFired: Walmart reportedly ends its contract with shelf-scanning robots made by Bossa Nova Robotics, opting for humans instead.
  • Yummy: Oreo legend Mondelez reports expectation-beating earnings and sales growth as cookies and candy get us through 2020.
  • Requested: Venmo-owner PayPal processed record payment amounts last quarter and added 15M new accounts for a total of 361M.
  • Vroomy: Ferrari stock surges on word that its supercar orders bounced back to pre-pandemic levels in October.
  • Sweaty: Under Armour sells diet tracking app MyFitnessPal for $345M after buying it for $475 in 2015. It hasn't done much for the brand.

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Wednesday

Disclosure: Authors of this Snacks own shares of Walmart and Softbank

ID: 1398418

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