Showing posts from January, 2021

Fleshing out our take on IPOs

Livewire Markets included some commentary from Equitable Investors in its IPO round-up - which you can find here - and we thought we would take he opportunity to flesh things out here. Discipline creeping in? Our footnote to the description of a buoyant 2020 for IPOs (as we set out for Livewire) was that the market appeared to take a more discerning approach in the last few weeks. Several IPOs slated for the ASX were cancelled and ready-made meals company YouFoodz got its listing away but then fell 25% on its first day.  We would like to think that there was more than just investor fatigue at work. A common structure to fund companies preparing to IPO has been to conduct a "pre-IPO" raising where investors commit capital that will be converted to shares at a discount to the IPO price. Quite often that discount is around the 20% mark. It was probably a healthy sign pre-Christmas that the market did not support a proposed IPO with convertible notes on issue that were to be co

10k Words - January 2021

  Apparently , Confucius didn’t say “One Picture is Worth Ten Thousand Words” after all. It was an advertisement in a 1920s trade journal for the use of images in advertisements on the sides of streetcars. Even without the credibility of Confucius behind it, we think this saying has merit. Each month we share a few charts or images we consider noteworthy.  Citi strategist Matt King summarises the legacy of 2020 across divisions in politics and the economy then Bloomberg shows US treasury yields hitting 1% for the first time since March. Bespoke debunks the view that it is bad for US equities for Democrats to have full control of federal politics. Market frothiness is on display in Factset's chart of SPAC (Special Purpose Acquisition Company or “blank check”) IPOs. UK fund Fasanara Capital shows that monthly variations in markets have been expanding, while US quantitative fund AQR argues with one chart that the prospects for a standard balanced portfolio are low and the opportunity


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