Episode 87: Technology and growth stocks are back
Technology and growth stocks are back in favor with some investors. Tom Lee changed his sector ratings to overweight FANG while downgrading financials, a popular value play, to neutral. “We are rethinking which sectors will lead the S&P 500 to 4,400 by mid-year 2021 (really the next 4 weeks). The primary reason for this shift in view is that interest rates are declining, and to a secondary extent, it reflects the fact markets already ‘panicked’ about inflation,” Lee's note said.
What are we going to wear? The Wall Street Journal story last week, but for better or worse, the issue it grapples with—what post-pandemic workwear will look like—remains painfully relevant. I found it particularly reassuring that even Elizabeth Spaulding, incoming CEO of Stitch Fix, a company that’s all about clothing and styling, is struggling with her new work look, ultimately settling on espadrilles and white jeans for one recent in-person meeting. (“It’s more casual than I would have been in the past, but getting dressed and pulling it all together is harder,” Spaulding told WSJ.)
Buy now pay later: Just three months after its $1 billion funding, online payments specialist Klarna has secured a further $639 million, strengthening its position as Europe's most valuable VC-backed company, according to PitchBook data. The Swedish company is now worth $45.6 billion—up 47% from the $31 billion valuation it hit in March. SoftBank's Vision Fund 2 led the new round, with support from investors including Adit Ventures, Honeycomb Asset Management, and WestCap Group.
Blue: Twitter launched its first subscription service, "Twitter Blue," for ~$3/month — but will people pay for social media? We don't know how many people will actually pay for Twitter Blue, which still shows ads. But if a social giant offered an ad-free subscription, that could have wide appeal. Social apps reward engagement because they want users to spend more time scrolling ads. An ad-free sub could change their business incentives.
Market Closed
Dow 30 34,479.60 +13.36 (+0.04%)
S&P 500 4,247.44 +8.26 (+0.19%)
Nasdaq 14,069.42 +49.09 (+0.35%)
IPO/SPAC
Chinese ride-sharing giant Didi, which has filed to go public, earned a small profit last quarter on $6.4 billion in revenue. The company reported a small profit this past quarter on $6.4 billion in revenue. In its filing, the company listed a net income of $837 million before certain payouts to shareholders.
LegalZoom.com, a Glendale, Calif.-based provider of online legal solutions, refiled for an IPO (it first filed in 2012 but withdrew in 2014). It plans to list on the Nasdaq (LZ) and reports $10 million of profit on $471 million in revenue for 2020. Shareholders include Francisco Partners, IVP, Kleiner Perkins, TCV, and Bryant Stibel. http://axios.link/sxH0
LATAM
Clip, Mexican digital payments, and commerce platform raised $250 million led by SoftBank and Viking Global Investors at a valuation north of $2 billion. www.clip.mx