Finimize - 👗 Shein's slow IPO

What’s going on here?

Shein filed a new request to list on the public market, a bid to finally get its slow burn of a dream into production.

What does this mean?

Shein’s plans to bring algorithm-designed, faux-silk midi dresses to the public market were thwarted when war broke out in Ukraine. So instead of raising cash from everyday investors, the world’s biggest fashion retailer sidled up to private ones instead. But they turned out to be quite conservative: Shein’s last fundraising round won the company a $66 billion valuation, around a third lower than its first valuation of $100 billion from April 2022. That only whet Shein’s appetite, so the Chinese fast-fashion giant recently filed for an initial listing on the US stock exchange. Shein’s modus operandi of shilling low-cost items could be more enticing than ever now shoppers’ budgets are squeezed, so if it makes it to market this time, the fashionista may see that nine-figure valuation once more.

Why should I care?

Zooming out: A very bumpy catwalk.

Shein may be trying to strut its stuff for the world, but the audience is watching through their fingers. US investors are well aware of the sweatshop accusations and private-jet levels of pollution that are woven into Shein’s reputation. Plus, the Chinese government isn’t sold on the idea of foreign investors owning its biggest firms, and certainly doesn’t want them exposed to strict US regulatory scrutiny. Big Chinese internet firms get around that with complex offshore structures, but Shein’s planning something simpler: by setting up a headquarters in Singapore, the company’s hoping to hide its ties with the Chinese government.

For markets: Money talks.

That said, Shein’s timing could hardly be better. Black Friday and Cyber Monday sales got shoppers spending, and even if that’s temporary excitement, investors may be tempted to eye up online retailers again. Throw in promises of big bucks for shareholders, and the stateside detractors might be easily convinced.

What’s going on here?

Reddit entered talks with investors ahead of a potential initial public offering (IPO), presumably in boardrooms instead of elusive subreddits.

What does this mean?

Reddit might have a reputation for hosting under-the-mainstream-radar conversations, but the social media company seems willing to be a lot more open. Literally: Reddit’s said to be working with Morgan Stanley and Goldman Sachs on a hotly anticipated public listing. Investors may well be chomping at the bit, as the tepid IPO market hasn’t given them much to sink their teeth into lately. And there’s more where Reddit came from: Kim Kardashian’s Skims underwear line is slated for a listing too, along with Microsoft-backed cloud firm Rubrik.

Why should I care?

For markets: We’ve seen better.

Reddit, Skims, and Rubrik have the potential to create tens of billions of freshly minted shares, but the stuttering IPO market will need more than those three to get its mojo back. Most likely, it’ll take a wave of private AI firms going public to revive the heydays of 1999. The jury’s out on how quickly AI will wipe out humanity – or, uh, flood the public market – though, and there’s no guarantee that it’ll be anytime next year.

Zooming out: The world runs on gossip.

Business used to be risky: firms wouldn’t know how their IPO would go down until it happened, when investors would either back the newly public offering or ignore it completely. And sure, the company in question could blame the investment bank that masterminded the listing, but the Goldmans and Morgans of the world would’ve already pocketed their fee by that point. In this digital age, though, any company flirting with a public listing can send whispers through the media, gauge the public reaction, and ditch the whole idea if the reception’s less than lukewarm.