Today's big stories

SoftBank has narrowed down which assets it might sell to raise $41 billion
There's a clear sign that US company earnings expectations could be bound for a boost – Read Now
Japan is set to end its drought of initial public offerings

1/3

Decision Time

What’s Going On Here?

Technology conglomerate SoftBank – which promised to sell $41 billion worth of assets in March – is about land on precisely which segments it’ll get rid of.

What Does This Mean?

First on the chopping block could be T-Mobile US: SoftBank has owned about 25% of the firm since its long-awaited merger with rival telecoms company Sprint. And seeing as T-Mobile US is worth almost $130 billion, a sale could net SoftBank over $30 billion. That’d leave the Japanese giant with an $11 billion shortfall that it could make up by selling off, say, some of its Alibaba shares. Either way, the cash SoftBank raises will go some way to reducing the company’s debt, as well as enable it to repurchase some of its own shares – as it previously said it would.

Why Should I Care?

Zooming in: Mortal comm-bat.
SoftBank’s core business is in telecommunications, which might be why its shares have been relatively resilient after falling dramatically earlier this year. Telecoms’ earnings are pretty predictable during economic downturns, after all, largely thanks to their long contracts. Of course, by cleaving off its other telecoms investment, more of SoftBank’s overall fortunes will be determined by its venture capital Vision Fund – a potentially risky move, given that it’s recently had make job cuts to stem the business's losses.

For markets: Weak defense.
Telecoms stocks tend to be popular among investors because of their “defensive” nature, but anyone looking for safety in T-Mobile US might be in for a nasty surprise (tweet this). If SoftBank unloads its T-Mobile US stocks publicly – by selling a “blocks” of shares on the stock market – the sudden oversupply could outstrip demand and send its share price drastically lower. Current investors are probably hoping instead for a “private placement” of T-Mobile US’s shares, which should have a smaller market effect. And SoftBank may already have its first customer: Germany’s Deutsche Telekom is reportedly interested in buying at least some of its stake…

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2/3 Premium

YOLO Traders Know Squat

What’s Going On Here?

A new breed of investor has emerged during lockdown: “YOLO day-traders” who’ve used their stimulus checks and tips from the /wallstreetbets subreddit to buy up shares of bankrupt companies that are actually worth, well, nothing. Nada. Zilch. Squat.

What Does This Mean?

Bankrupt car rental company Hertz’s shares, for example, went from about 50 cents to around $5 in a few days – and just as quickly fell to $2, all the while having no real value. Some traders claim to have made a lot of money riding these waves, but other, much quieter folks have also lost huge amounts.

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3/3

Cool, Calm, Collected

What’s Going On Here?

If patience is a virtue, Japanese investors must be pretty darn virtuous: they’ve waited since April for an initial public offering (IPO), and now three new companies are ready to join the country’s stock market later this month.

What Does This Mean?

The three companies breaking cover first are online media firm Locoguide, tech company Ficha, and retailer Copa. And while they’re not aiming to raise groundbreaking sums, their listings may still go some way to restoring confidence among Japanese investors, while paving the way for other companies waiting in the wings.

The pandemic’s brought IPOs around the world to a halt, but companies’ confidence has picked back up now that we seem to be past the worst of it. In fact, just one of the three aforementioned companies is predicting their annual profit will shrink this year compared to last.

Why Should I Care?

The bigger picture: When life gives you lemons...
Stateside IPOs are well on the road to recovery too: Warner Music Group raised $2 billion when it went public earlier this month. But that’s just the beginning: data analytics firm Palantir’s long-awaited stock market listing is expected to kick off in the next couple of weeks, while insure-tech Lemonade – whose losses eclipsed its revenue last year – will go public soon too. And since it wasn’t so long ago that investors were all over shares of loss-making companies, other unprofitable firms – like Airbnb – might be watching closely to see how smoothly Lemonade goes down.

Zooming out: Daddy needs a brand new listing.
IPOs in Hong Kong and China have picked up too, but not for entirely positive reasons. Rising US-China tensions have seen a few major companies try to boost their investor bases with secondary listings in Hong Kong, including China-based but US-listed NetEase and Chinese ecommerce giant JD.com. Mega microchip maker SMIC, meanwhile, hoped to court new investors by selling new shares in China, in addition to those already listed in Hong Kong.

Get prepared: Here’s how you can profit from the successful IPOs.

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– Friedrich Nietzsche (a German philosopher, cultural critic, composer, and poet)

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📚 What we're reading

Lateral thinking: a magic formula? (Aeon)
How we make sense of time (Scientific American)
All aboard the sea turtle (National Geographic)

Finimize - 🇯🇵 Japan’s IPO frenzy

Today's big stories

Decision Time

What’s Going On Here?

What Does This Mean?

Why Should I Care?

YOLO Traders Know Squat

🌍 Discover the best of both worlds

Here’s a disclaimer: investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future return. You may not recover what you invest.

Cool, Calm, Collected

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🎈 Happy birthday to you

Here’s a disclaimer: investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future return. You may not recover what you invest.

⚠️ Quick, stop what you’re doing

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