Episode 83: Markets closed up despite a volatile few days
Following a volatile few days, we close the week on the upside, with value stocks up 11% over the last three months. Growth stocks, meanwhile, are down about 1%. Higher rates and inflation fears are among the factors negatively impacting investor sentiment.
A widespread surge in producer prices is spooking investors, as concerns rise that the Consumer Price Index (CPI) increases - i.e., inflation - will be next. Those worries materialized in the market on Thursday, which recovered its losses today. Investors are worried that the Fed will raise interest rates sooner than expected to fend off inflation.
Elsewhere on Wall Street, first-quarter reports continued to pour in. Bumble's conservative outlook for the next quarter sent its stock tumbling 14% on Thursday. DoorDash tripled revenue to $1.1 billion and its stock jumped 8% in premarket trading on Friday. And Airbnb's revenue rose 5% to $887 million, better than analysts expected. Its stock was about unchanged on Friday morning.
Gas stations from Florida to Virginia began running dry and prices at the pump rose on Tuesday, as hacker’s shutdown of Colonial Pipeline’s supply line - one-half of which flows to the East Coast fuel, extended into the fifth day and sparked panic buying by motorists. The flow of fuel through the pipeline has resumed. The Biden administration urged drivers not to top up their tanks.
Market Closed
Dow 30 34,382.13 +360.68 (+1.06%)
S&P 500 4,173.85 +61.35 (+1.49%)
Nasdaq 13,429.98 +304.99 (+2.32%)
IPO
Oatly, the Swedish oat milk company backed by The Blackstone Group, Oprah, and Jay-Z, set IPO terms to 83.4 million shares at $15–$17 per share, which if priced in the middle of this range, would put it at a $9.5 billion market cap. Oatly, planning to list on the Nasdaq (OTLY), reported a $60 million net loss on $421 million of revenue for 2020 (vs. a $36M net loss/$306M in rev for 2019). http://axios.link/Sob0
Procore Technologies, a Carpinteria, CA.-based provider of construction management software, set IPO terms to 9.5 million shares at $60–$65. Priced at mid-point, It would have an $8.9 billion fully diluted market value. The firm raised $640 million from firms like Iconiq (39.5% pre-IPO stake), Bessemer Venture Partners (14.1%), Tiger Global (7.8%), and D1 Capital Partners (5.6%). http://axios.link/UBpF
LATAM
Divibank, a financing platform offering LatAm businesses access to growth capital, has closed on a $3.6 million round of seed funding led by San Francisco-based Better Tomorrow Ventures (BTV).
São Paulo-based Divibank was founded in March 2020, just as the COVID-pandemic was starting. The company has built a data-driven financing platform aimed at giving businesses access to non-diluted capital to finance their growth via revenue-share financing.