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Market summary: 📊
India slammed the brakes hard on Friday — ending the day slightly in the red. US took another straight day of beating, as inflation worries weigh on investor moods.
US:
S&P 500 - down 0.75%
Nasdaq - down 0.77%
India:
Nifty 50 - down 0.01%
Sensex - down 0.04%
Saturday shot of espresso ☕
✅ Unfortunate — Reuters photojournalist Danish Siddiqui was killed in a crossfire between Taliban and the Afghan government forces yesterday, while covering the rising conflict in the region. Danish was celebrated worldwide for courageous coverage of wars and social issues across Asia and Middle East, and even won the 2018 Pulitzer Prize for Feature Photography for his coverage of the Rohingya migration. Here’s a link to his best work. RIP.
✅ Sorry bruh I busy — the third person who was supposed to go with Jeff and Mark Bezos on their little spaceship for an excursion around the planet was unable to make it, so his 18-year old son, Oliver Daemen, will become the youngest person to ever go into the space. Oliver’s father, a private equity mogul in Netherlands, paid $28 million for the seat, but was apparently unavailable due to “other commitments”.
The mission is scheduled for July 20th.
PayTM drawing global eyeballs 👀
Move along kids, daddy’s here — PayTM finally filed for its IPO last night, looking to raise $2.2 billion from the markets, topping Zomato and any other Indian company for at least a decade.
Alibaba, Warren Buffett’s Berkshire Hathaway, and Softbank, some of the biggest shareholders will offload about a billion dollars worth of shares, while the remaining billion will be issued new.
Some quick stats:
₹2,800 crores in revenues last year, down about 12.5%
Processes ₹4 lakh crores of payment volumes, servicing 114 million+ annual transacting unique users
Lost ₹1,700 crores, as COVID piled up surprise expenses — but improving
Honestly, valuation when paired with fundamentals, does look a bit outrageous. But, there’s ample signs of improvement in the numbers — with marketing expenses tanking, payment processing costs going down, which when held up against looming recovery on mainstreet, could drive some serious windfalls for the business.
Bloomberg Quint has a solid breakdown.
Going forward — rigorous parallels with emerging market companies like $PAGS, $MELI, $STNE, and even South East Asian ventures are inevitable, and traditional investors will continue to ask hard questions.
But looking at the reception for the Zomato bid, you bet there’s plenty of risk appetite right now, from both institutional and average-joe investors.
Fireworks continue in Startupland 🎇
Delhivery, the company that provides logistics services to ecommerce vendors, raised $100 million from global logistics pioneer FedEx.
Vote of confidence from FedEx, a pioneer in its own league, is as good as it gets for any logistics company! Both companies will work together too — with FedEx transferring some of its domestic assets to Delhivery, while Delhivery working to market as well as pick up and deliver packages for FedEx’s rapid overnight international shipping service, FedEx Express.
The arrangement should really help convince traditional investors in Mumbai when that IPO comes rolling in the next few months.
Meanwhile, quickly looking at another big global deal, 👏
WSJ reports, Intel is working up a deal to acquire chip manufacturer Global Foundries, looking to spend as much as $30 billion, in a bid to ramp up production capacity and take on Taiwan Semi.
The deal is all part of Intel’s new CEO Pat Gelsinger’s agenda to outsource a large party of Intel’s chip production, while at the same time building a contract manufacturing business inside of Intel. Both companies have been mum on the news.
Aight folks, it’s Saturday and that's it for today! Here’s a quick look at the major things that went down this week
🙄 Y u do this? — Chinese regulators blocked Tencent’s merger of two video game streaming sites Huya and DouYu on antitrust concerns. Tencent, which owns a majority stake in both streamers, was pushing the merger to save costs and streamline earnings — but regulators were concerned about Tencent owning more than 80% share in the space for a long time. Couple days later, China then took on TikTok, stopping Bytedance from an IPO until a full cybersecurity audit is through. The purge continues!
✈️ Someone said airline? — a new low-cost nationwide airline, called “Akasa”, is in the making, kicked off by a bunch of ex-aviation sector executives, backed by dollars from billionaire investor Rakesh Jhunjhunwala. Details are scant, Jhunjhunwala plans on owning about 40% of the business, with a ~$35 million seed capital infused to get the party started. With revenge travel expected to pick up, couldn’t be a better time, if at all, to launch one!
💰 Broadcom guns for SAS — Global semiconductor giant Broadcom is trying to woo analytics software maker SAS Institute, for a $15-$20 billion acquisition. Broadcom is an acquisition specialist, becoming a $200 billion behemoth by gobbling 50+ semi companies along the way in the last 2 decades, but since 2018 the company has aggressively pivoted to acquiring software companies — buying CA Technologies for $20 billion in 2018, and Symantec for $11 billion in 2019. And now SAS.
📈 Dalal Street kicked off earnings season on a high —
D-mart reported a solid quarter, with revenues up 31%, Profits up 132%, and traffic footfall slowly climbing back. Management seemed pretty upbeat about returning to growth on a full year basis for this fiscal.
IT gang Infosys and Wipro had outstanding earnings too — with revenues and profits growing healthy, beyond market’s expectations, while operating margins shrinking a bit due to stress of operating in the second wave mess. The accelerated shift to cloud is giving IT companies a unique opportunity to capitalize on and catch some wind in their sails.
💰 Reliance gets in bed with JD — Ambani scooped up controlling stake in Just Dial for about $470 million, for 41% stake, with a follow on 26% purchase coming in a few months — looking to integrate the digital directory and marketplace for B2B suppliers in RIL’s fledging ecommerce, retail, and hyperlocal services empire. Post deal, JD founder will still run the ship.
🍎 Apple coming in hot— Apple along with Goldman Sachs, is launching a new Buy-Now-Pay-Later product offering, deeply integrated into Apple Wallet, to allow ecommerce shoppers using Apple Pay at checkout to buy stuff on credit. Looking at the success of the Apple Card, odds are BNPL is a win straight out the stable, further strengthening Apple’s non-hardware Services business which is already churning $90B+ a year in revenues. FAANG stonks, FTW!
Product of the day 😎
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aight… weekend on, let the chilling begin! 🍻
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