Trend Analysis
Capital Markets
Tech stock options just aren’t what they used to be since the boom years went bust this year. Gone are the days when early hires could make a small fortune exercising options or selling some of their shares into a public listing. These days employees looking to cash out will have to wait a bit longer while the U.S. IPO market tries to regain its footing.
One company defying the trend is Instacart, which plans to go public sometime before the end of the year. They may have a successful exit as long as they can keep showing profits and other profitable companies may follow suit. For the rest still running in the red, it’s going to take time before markets regain interest. That’s little solace for those who may have exercised their options thinking the recent stock market rebound was a sign of things to come.
Chamath Palihapitiya, considered a bellwether for SPAC issuances, had to push back two mega-mergers this month. But still, special purpose acquisition companies (SPACs) have seen a slight uptick in interest with seven new mergers announced in the first sweltering week of August. That’s better than July’s single IPO raise of $100 million. It’s unclear when they’ll complete their acquisitions.
Meanwhile, the China IPO market hit nearly $58 billion in the first seven months of 2022, a new record for the country. Five IPOs have breached ‘unicorn’ status crossing $1 billion valuation, with one more waiting in the wings. Southeast Asia is also on the move as the New York Stock Exchange (NYSE) collaborates with SGX, the Singapore exchange. John Tuttle, Vice Chairman of the NYSE said in a CNBC interview that they are looking for ways to not only cross-list Singapore-listed firms, but also to find other avenues for listings.
Media
Back in the United States, the streaming wars are heating up as the Walt Disney Company racked up 221 million customers, outpacing long time market leader Netflix. In an effort to boost revenues even further, Disney+ and Hulu will try out an ad-free premium membership ($10.99/month), a 38% increase over the standard subscription that will now include ads.
Amazon is beefing up its streaming sports coverage this year with exclusive rights to Thursday Night Football (TNF), hosted by acclaimed sportscaster Al Michaels. To widen their viewership beyond the typical NFL and NCAA, Amazon is also offering a simultaneous stream hosted by the sports-comedy team Dude Perfect, known for their trick shots and challenges. Another potential deal with DirecTV may bring TNF to restaurants and bars.
Fans without an Amazon subscription can subscribe to the NFL’s own streaming service, which will now feature live out-of-market preseason games, along with live local and primetime regular-season and postseason games on phones and tablets only. That’s in addition to live local and national audio for every game.
Technology and Innovation
This summer’s heat wave hasn’t spared early-stage companies. As equity markets slumped and IPOs dried up, so did pre-IPO funding rounds. And even when they do occur, entrepreneurs are dreading the lower multiples that might lead to a down round where they are valued at less than what they were before. The rocky economy doesn’t help convince investors that it’s a good time to take on risk either.
In order to capture more of the value in the startup process, major venture capital investors are figuring out how to effectively leverage niche startups to create real world solutions.
In the “traditional” tech world, work-from-home may become as antiquated as a wired mouse. Apple wants its workers back, in person, three days a week by Labor Day. The goal — increase productivity. The question — will it work and how many perks will it take to keep highly skilled workers from seeking more flexible companies?