The IPOX® Update 12/21/2024

U.S.

Databricks Likely to Delay IPO After $10 Billion Fundraising Round

Databricks, a U.S.-based data analysis company, is expected to postpone its initial public offering following a substantial $10 billion fundraising round. This latest funding values the company at $62 billion, with Thrive Capital leading the investment, alongside participation from Andreessen Horowitz, DST Global, MGX, and Wellington Management. The capital injection will be allocated towards employee share buybacks and covering associated tax liabilities. Databricks has demonstrated strong financial performance, reporting $2.6 billion in revenue for the fiscal year ending in January, marking a 57% increase year-over-year. While the company reported an operating loss of $418 million, this represents an improvement from the $442 million loss in the previous year. Notably, Databricks exhibits a growth rate unmatched by any publicly traded U.S. software firm with revenues exceeding $500 million. This significant private funding round provides Databricks with considerable financial flexibility, potentially delaying the need to access public markets. (Source)

FedEx Plans Potential IPO or Spinoff of Freight Division

U.S. based logistics giant FedEx intends to separate its freight division into a distinct, standalone entity, potentially through an initial public offering or a spinoff. This strategic maneuver is projected to take approximately 18 months to implement and aims to streamline FedEx's operational structure, thereby enhancing shareholder value. Following the announcement, FedEx shares experienced a significant surge, climbing 7.5% to $296.50 on December 20, 2024, contrasting with a broader market downturn. Analysts have responded positively, raising their price targets for FedEx by an average of $29, with Loop Capital setting the highest target at $365. The freight division currently contributes 10% to FedEx's total sales, generating $751 million in the first half of fiscal year 2025, a 23% decrease year-over-year. Despite projecting flat sales for fiscal year 2025, FedEx anticipates higher earnings per share of $19.50, driven by ongoing cost-saving initiatives. This strategic decision underscores FedEx's adaptability and focus on optimizing its business segments amidst a challenging economic landscape. (Source)

Chime Submits Confidential Filing for IPO

Chime, a U.S.-based fintech startup, has confidentially filed for an initial public offering. The specific date and offering details for the IPO have not yet been disclosed. Chime provides app-based banking services with a focus on expanding access to financial tools for a broader demographic. The company was last valued at $25 billion during the 2021 tech boom. Chime's primary target demographic is younger individuals who prefer digital banking solutions over traditional banking services. A key differentiator for Chime is its elimination of various banking fees, offering features such as no monthly maintenance charges and early direct deposit access. Analysts are closely monitoring developments for further information regarding Chime's valuation and market strategy as the IPO process progresses. Chime's decision to pursue a public listing aligns with current trends in the fintech sector, which is capitalizing on favorable market conditions for innovative financial service providers. (Source)

Donald Trump's Tariff Threats Create Uncertainty in the U.S. IPO Market

Wall Street analysts have expressed concerns that potential tariff impositions by Donald Trump could introduce uncertainty into the U.S. IPO market. Trump's protectionist policies, which include the implementation of broad tariffs, have raised fears of increased inflationary pressures within the market. Although markets initially showed a positive reaction following the election, a sense of caution prevails regarding the potential economic repercussions of these trade measures. The implementation of tariffs could potentially delay anticipated interest rate cuts by the Federal Reserve, consequently increasing cost pressures for companies considering IPOs. Private equity firms, which held an estimated $3 trillion in deal inventories prior to October, are now exhibiting increased caution due to potential market volatility. The U.S. IPO market has seen a resurgence in 2024, with $43 billion raised, marking a 60% increase from 2023 after a period of reduced activity. However, major banks are warning that renewed market volatility could deter investors from participating in new IPOs, potentially impacting the momentum of the recovering market. (Source)

Asia-Pacific

CATL Considers Hong Kong Listing to Raise at Least $5 Billion

CATL (Contemporary Amperex Technology Co. Limited), a China-based leading manufacturer of EV batteries, is reportedly considering a secondary listing on the Hong Kong Stock Exchange, aiming to raise at least $5 billion. This potential IPO could be the largest in Hong Kong since Kuaishou Technology's $6.2 billion offering in 2021. CATL's current market capitalization stands at $164 billion, with its shares listed on the Shenzhen Exchange having increased by 65% this year. The funds raised through the Hong Kong listing are intended to support CATL's ongoing overseas expansion initiatives and potential issuance of convertible bonds. The company is targeting the first half of 2025 for the listing, pending approval from China’s securities regulator. Analyst Johnson Wan anticipates significant interest from foreign investors in CATL's Hong Kong-listed shares, highlighting the company's prominent position in the rapidly growing electric vehicle battery market. (Source)

Eneos Mulls IPO of Up to 70% of Chip Material Maker JX Advanced Metals

Eneos Holdings, a Japan-based energy company, is considering listing up to 70% of its subsidiary, JX Advanced Metals (JXAM), through an initial public offering. According to sources, the IPO could potentially raise up to 700 billion yen ($4.51 billion). Eneos intends to utilize the proceeds from the listing to fund its transition towards greener energy solutions and to enhance overall corporate value. JXAM, a manufacturer of materials used in chip production, submitted its application for listing on the Tokyo Stock Exchange on October 8, 2024. The IPO is anticipated to launch in February, with the listing planned for March 2024. Eneos' board is expected to make a decision on Friday regarding offering between 50.1% and 70% of JXAM's shares. Daiwa is reportedly among the arrangers for this significant IPO. (Source)

Europe

Greek Multinational METLEN Plans Multi-Billion Pound London IPO

METLEN Energy & Metals, a Greece-based multinational company, is planning a multi-billion-pound initial public offering on the London Stock Exchange. METLEN, which currently trades on the Athens Stock Exchange, has filed a draft listing prospectus with the UK's Financial Conduct Authority. Following a strategic review, the company has chosen London for its primary listing while maintaining a secondary listing in Athens. Evangelos Mytilineos, Chairman of METLEN, expressed his satisfaction with the initiation of the London listing process, highlighting the company's long-standing presence in UK and international markets. The IPO is anticipated to occur in 2025, valuing the group at approximately €4.8 billion (£4 billion). Upon listing, METLEN could become a candidate for inclusion in the FTSE 100 index. The London Stock Exchange has recently faced challenges as companies have increasingly opted for U.S. listings or private equity buyouts. The recent listing of French company Canal+ marked a notable success for the LSE, representing its largest new listing in two years. (Source)

Fast Fashion Giant Shein Considers London IPO, May Sell Less Than 10% of Shares

Shein, a fast-fashion company, is considering an initial public offering in London and may seek exemptions from the city's standard listing rules by potentially offering less than 10% of its shares. Reportedly, the UK's Financial Conduct Authority (FCA) is taking longer than usual to approve Shein's IPO application. Shein, which was valued at $66 billion in a previous funding round, could potentially raise up to $6.6 billion through this IPO. London's listing regulations were relaxed in 2021 with the aim of making the market more attractive for companies seeking to go public. Shein's previous plans for a U.S. listing were reportedly hampered by political opposition, leading to a shift in focus towards London. The company's revenues for 2024 are projected to reach $50 billion, demonstrating a significant 55% increase compared to the $32 billion in revenue generated in 2023. A London listing would provide Shein access to a major international capital market. (Source)

German Tire Maker Continental Plans IPO of Automotive Unit by End-2025

Continental, a German tire manufacturer, intends to list its automotive business on the Frankfurt Stock Exchange by the end of 2025. As part of this strategic move, Continental will also divest its Original Equipment Solutions rubber products business, with sales processes commencing in the first quarter of 2025. The automotive division is slated to undergo a rebranding by April 2025 and will be led by board member Philipp von Hirschheydt. This spin-off is aimed at addressing challenges related to high costs and increasing competition from Chinese manufacturers targeting European carmakers. Recently, Continental announced job cuts and lowered its sales guidance for 2024, citing weak industrial demand. Major European car manufacturers, including BMW, Mercedes-Benz, and Volkswagen, have also been facing pressures on profitability and have engaged in restructuring discussions. Continental’s Supervisory Board views the planned spin-off as a strategic initiative designed to enhance the agility and value creation potential of its automotive business unit. (Source)

Britain Eyes Capital Markets Revival Via Private Shares Platform

The UK's Financial Conduct Authority (FCA) has proposed the creation of a new platform called PISCES (Private Intermittent Securities and Capital Exchange System) to facilitate trading in shares of private companies. This initiative is designed to revitalize the UK's capital markets and attract increased investment in companies that are not yet publicly listed. PISCES aims to provide investors with access to potentially high-growth private companies, thereby diversifying investment opportunities within the UK market. The Treasury anticipates presenting the framework for PISCES by May 2025, with the FCA subsequently outlining the relevant regulatory rules. However, some critics have voiced concerns that PISCES could potentially undermine the junior Alternative Investment Market (AIM) and may discourage companies from pursuing traditional initial public offerings. Additionally, there are concerns regarding the potential risks of insider dealing, as standard civil and criminal insider trading rules will not be fully applicable on the platform. The FCA intends to mitigate these risks through enhanced disclosure requirements for platform participants, while also urging investors to fully understand the inherent limitations and risks associated with trading on PISCES. (Source)

MENA

Saudi Global Ports Co. Plans Potential $1 Billion IPO

Saudi Global Ports Co. is planning a potential initial public offering that could raise up to $1 billion as early as next year. The company has selected Goldman Sachs and HSBC to manage the offering on Riyadh's stock exchange. Saudi Global Ports, backed by Saudi Arabia's Public Investment Fund (PIF) and Singapore's PSA International, operates key ports within Saudi Arabia. This IPO is in line with Saudi Arabia's broader strategic objectives to diversify its economy beyond its reliance on oil revenues. The capital raised from the IPO will be used to support the expansion and modernization of Saudi port facilities, reinforcing the nation's position as a major global logistics hub. The offering is expected to attract significant interest from both domestic and international investors. This IPO reflects Saudi Arabia's ongoing privatization efforts aimed at stimulating growth in its non-oil sectors. (Source)

Disclaimer: News summaries may contain mistakes. The information does not constitute financial advice, endorsement or recommendation and should not be considered as such.