The dog days of summer are finally here with a heat wave hitting large swaths of the U.S. and temperatures soaring to new records. That hasn’t dampened capital market activity in the U.S. or Asia with IPOs on the rise and sizable fundraises for companies looking to list in the near future.
Those eager to stay indoors will find their streaming options expanding as media companies reconfigure their offerings at attractive prices, including Comcast’s $15/month bundle. Some workers are also “quiet vacationing” due to demanding work environments.
See all the details below.
Capital Markets
United States
The heat hasn’t dampened capital market activity with company listings and fundraises on the rise. There have been 89 U.S. listings worth $18.5 billion since the beginning of the year, according to Bloomberg. Payments company Waystar hit the midpoint of its IPO pricing at $21.50, to raise $968 million. It’s the biggest U.S.-based company listing of the year. Zilch, a British fintech firm that rivals Klarna, raised $125 million to triple sales and head for an eventual exit. The funding was raised from German banking giant Deutsche Bank, despite the name meaning literally “nothing”.
And hedge fund titan Bill Ackman is raising around $1 billion for Pershing Square with an eye towards a public listing around 2025 or 2026, according to recent reporting.
Asia
Asia is also heating up with the closely watched SHEIN preparing for a London IPO after difficulties pursuing a U.S. listing. The Asia-based fast fashion retailer ships direct from Chinese factories to consumers. The next big challenge is whether the company can continue to grow and adjust this business model to compete with the likes of TEMU that lists a wide variety of goods. Even much maligned Hong Kong is seeing an uptick in activity with 21 listings on the Hong Kong Exchange (HKEX) this year in addition to over 100 companies submitting applications. These include biotech, AI, new energy, and consumer goods.
Media and Entertainment
For those that want to stay indoors and avoid the summer heat, Comcast is bundling Peacock with Netflix and Apple TV+. Warner Brothers Discovery and Walt Disney also offer a streaming bundle including Disney+, Hulu and Max. This may add pressure to Amazon Prime Video, which defaulted subscribers to their ad version. If venturing out for a more immersive experience helps beat the heat and humidity, fans can look forward to Netflix’s mega experience slated to open in two malls in 2025. Fans will be able to chill together in “Netflix House”, a 100,000+ square foot store opening in Texas and Pennsylvania that will feature real life spaces for hit shows like “Bridgerton” and “Squid Game”.
GenAI
While AI has been seeing a lot of traction in venture capital these days, it may not be what sells the next Apple iPhone. According to Needham & Co. Senior Media & Internet Analyst Laura Martin, the iPhone 16 due in September won’t have the Chinese versions of large language models ready for the GenAI upgrade. With 20% of sales still in China, that may put a crimp on growth for this cycle. AI is, however, moving more into the workplace with “co-pilots” in HR and IT support. Moveworks integrates into Slack and answers employee support questions without the need for additional staff.
Real Estate
Homeowners are feeling a different kind of heat as insurance costs are skyrocketing in some markets, especially those hit with the effects of climate change. In some areas of Florida, for example, people are putting their houses up for sale because home insurance costs have become unaffordable. While prices overall have remained elevated, zero-down payment mortgages are making a comeback. That’s spooking some analysts who see increased risks akin to the 2008 housing crisis, and the real possibility that home prices won’t keep going up as they have of late.
Corporate Culture
Some workers are making the most of whatever housing they do have by “quiet vacationing” – taking time off without telling their bosses due to less leeway for PTO amid higher workload expectations and less staff. Some firms are instituting a four day work week as long as productivity remains the same. And corporate work identities are changing from the “family” mindset to a sport’s team model that focuses on a common goal and performance. We have long been a proponent of this approach. It takes the sting out of layoffs from Mom vs Coach for those implementing the downsizing.
With summer just beginning, it's a prime opportunity for companies to stay visible and use the season's downtime to strategically plan for the future. This forward-thinking approach will put them in a strong position come September, ahead of the presidential election. Thank you for reading this month’s News to Use. If you think your firm would benefit from a customized version of issues relevant to your customers, please let us know.
Until next month,
- Rachel