#9 Daily Financial News Round Up - Nov 9,2021
Market Snapshot
The market trends reversed after a good rally. Dow Jones is down by 0.43%, S&P500 is down by 0.35%, and Nasdaq Composite is down by 0.37%.
How’s crypto-market?
Bitcoin is up by 0.64%. The top three traded cryptocurrencies in the last 24 hours are Shiba Inu, XRP and Loopring. Shiba Inu and XRP have consistently been in the top three traded cryptocurrencies in the past week. Ripple’s ecosystem seems to offer great future prospects which makes it special. Shiba Inu’s price is easily swayed by Elon Musk’s tweets and it is part of the meme coins. It’s increased trading activity is reflective of money-making schemes such as the pump and dump strategy.
What news caught my attention?
General Electric (GE), the American symbol of innovation, plans to split its core operations into three public companies. The industries of operations include aviation, healthcare and power. Siemens AG, GE's competitor, had also spun off its healthcare and energy divisions in the past. Decentralization and niche-focused operations appear to be the running theme in businesses. Splitting into industry-specific companies focusing on core competence helps increase operational efficiency. Besides, it also reduces the costs of governance, in turn enhancing accountability. Increased accountability combined with industry-specificity attracts more area-focussed investors. More investors imply more capital for the company. Splitting the company into multiple niche-focused companies seems like a win-win situation for both the firm and its investors. Is this the end of empire-building businesses?
The number of companies going public has been on a downward trend for the past few years. That seems to have changed this year. According to Dealogic, this is the single biggest IPO year. The IPO markets are hot, and it’s an exciting time to raise money. Many companies in the restaurant industry particularly have IPO’d this year. Dutch Bros, Krispy Kreme, First Watch Restaurant Group, Portillo’s, Sweetgreen Inc. are some companies that have gone public or filed to go public. Panera joins this list. Backing Panera through his SPAC - USHG Acquisition Corp., Danny Meyer, the founder of Shake Shack, is also set to invest in Panera at the time of its IPO.
A quarter of S&P500’s total return over the past two weeks comes from Tesla.
My Takeaways:
IPO markets are buzzing. Food-based companies seem to be in the spotlight, highlighting that service businesses are hot. Shark Tank’s pitches also get a high proportion of food-based businesses.