Palantir IPO: Direct listing moved to September 29th

Equities

One of the most hotly-anticipated public offerings of the year is happening next week. Palantir, the secretive data analytics company backed by PayPal co-founder Peter Thiel, will list on the NYSE under the symbol PLTR via a direct listing on September 29th.

The company originally planned to go public on September 23rd, but recently changed the date. Registered stockholders are expecting to sell up to 257 million Class A shares.

During 2020 Q3 around 36 million shares were sold privately at a volume-weighted average of $6.45. So far this year the company has privately raised $900 million at $4.65 per share. The company’s estimated value is between $18 billion and $26 billion.

Spotify and Slack are the only two other tech companies in recent years to have gone public via a direct listing. Palantir is using the same bank – Citadel Securities – that worked with them to help advise it during the process.

How to trade Palantir

Marketsx gives you three ways to trade the biggest IPOs and direct listings, including Palantir.

You can get started right now with our exclusive Palantir grey market – buy or sell to speculate on the eventual market capitalisation after the stock hits the market.

Or you’ll be able to trade CFDs on the stock after the listing is completed.

You can also trade the performance of the biggest IPOs in the last two years with CFDs on the Renaissance Capital IPO ETF. This ETF covers only new companies and is updated regularly. The most significant IPO stocks are added as soon as they list, and the ETF is updated quarterly to make sure it includes all the newest US stocks on the market.

Ant Group listing – the largest IPO in history?

Equities

Jack Ma’s Ant Group is aiming to hold the largest IPO in history this year. Here’s how you can get involved with Marketsx.

Alipay operator seeks record IPO

Ant Group Co will attempt to hold the largest IPO in history later this year when it aims to raise as much as $30 billion for a valuation of at least $225 billion.

The fintech behemoth was founded by Jack Ma’s Alibaba. Amongst other things, it operates Alipay, the world’s largest digital payment platform.

The company has raised over $23 billion in private funding and was valued at $200 billion in its latest funding round. Alibaba owns a 33% stake in the business.

It’s backers include BlackRock, General Atlantic, Silver Lake, and Warburg Pincus.

Ant’s IPO filing reveals revenue of $10.5 billion in 2020 H1, representing growth of 40% year-on-year, while profit is up 1,000% on an annualised basis to $3.2 billion.

Will Ant Financial IPO beat Saudi Aramco’s record?

Ant Financial is expected to list in Shanghai and Hong Kong in October. If demand remains strong the company could raise as much as $30 billion. The IPO market got off to a slow start this year thanks to the coronavirus pandemic, but the Hong Kong market has roared back into life in the past few months.

The current record for an IPO was set by Saudi Aramco, which raised $29 billion when it listed on the Tadawul.

How to trade the Ant Financial IPO and Ant Financial shares

This could be the biggest IPO in history, and you can start trading it right now with the Ant Financial grey market on Marketsx.

Buy or sell the grey market to speculate on the eventual market capitalisation of the company when it goes public.

You’ll also be able to start trading CFDs on the shares the day they begin trading.

Palantir IPO: key facts from its S-1 filing

Equities

Palantir, the Peter Thiel-backed software and data analytics company known for its close ties to national security agencies in the US and allied countries, has publicly filed its S-1 IPO registration document.

Here’s what we know so far

Palantir applied to the NYSE to go public via direct listing, as opposed to a traditional initial public offering, meaning it is not raising any new capital by going public. It will trade under the ticker PLTR.

Revenues rose 25% in 2019 to $742m, while the net loss was stable at $580m, the same as in 2018.

Revenue growth picked up this year – in the six months to the end of June 2020 revenues rose more than 50% to $481m from the same period a year ago. For this period the net loss also narrowed considerably to $165m from $280m in the first half of 2019.

Contribution margin – a key non-GAAP metric favoured by Palantir as a measure of profitability and efficiency – is also improving, rising from 17% in the first half of 2019 and 21% for the full year to 48% in the first six months of 2020.

It has never made a profit and issues the usual caveat emptor: “We expect our operating expenses to increase, and we may not become profitable in the future.”

Controversial company?

Palantir is at pains to stress it’s not like other Silicon Valley companies. “Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments,” wrote CEO Alexander Karp. Palantir has “repeatedly turned down opportunities to sell, collect, or mine data”, he explained.

But the company’s work has at times courted controversy for other reasons.

“Our work and the use of our software present difficult questions,” wrote Karp. “The construction of software platforms that enable more effective surveillance by the state of its adversaries or that assist soldiers in executing attacks raises countless issues, involving the points of tension and trade-offs between our collective security and individual privacy, the power of machines, and the types of lives we both want to and should lead. The ethical challenges that arise are constant and unrelenting.”

You can speculate on Palantir’s market capitalization ahead of its hotly-anticipated IPO with our exclusive grey market.

Airbnb IPO: when can you buy and sell Airbnb shares?

Equities

Accommodation website Airbnb is set to be one of the largest stock market listings of the year, after the group filed a draft S-1 registration document with the US Securities and Exchange Commission.

In a statement, Airbnb said the number of shares to be offered and the price range for the proposed offering have not yet been determined. The date of the initial public offering (IPO) is not known, but is expected to take place after the SEC completes its review process. A lot will no doubt depend on market conditions.

We noted earlier in the year that the run-up in stocks after the March trough was offering companies a window of opportunity to get their stock listings out the door.

How much is Airbnb worth?

The company raised $2 billion in two separate tranches in April of this year, whilst it cut staff numbers by 25% to help it survive the enormous impact of the pandemic. This valued the company at $18bn but this was about half what it notionally worth in 2017. In May, chief executive Brian Chesky said the company expects to deliver revenues in 2020 of about half the $4.8bn generated last year.

Part of this is down to the pandemic – it has been a terrible time for the travel sector in particular and about $330bn of revenues has been lost globally, according to the US Travel Association. But Airbnb has enjoyed a surge in bookings as lockdown restrictions ended, particularly in rural areas, where bookings rose 25%.

The fact that Airbnb has not decided to shelve its anticipated IPO this year is a sign of renewed confidence, or it’s a sign the company needs to raise capital fast.

What is Airbnb?

Airbnb launched in 2008 and now has over 150 million users who offer private rentals of apartments and rooms in over 65,000 locations across the globe. It includes Amazon founder Jeff Bezos amongst its early investors. By the end of 2019 analysts were expecting the Airbnb IPO to see the company achieve a valuation of $42 billion.

How to trade Airbnb

Markets.com will be offering a grey market on Airbnb ahead of the IPO, which will let you speculate on the share price before it debuts on the stock market. The grey market price is based on the market capitalisation of the company after its first day of trading. As ever once it has completed the listing you will be able trade the shares by CFD trading or Spread Betting, or invest via share dealing.

Another way to take advantage of the Airbnb IPO is to trade the Renaissance Capital ETF (IPO), which is an index-like basket of companies that went public in the last years.

Palantir IPO: What you need to know

Equities

After many years of waiting it looks like investors might soon get a chance to grab a piece of Palantir. Watch on to find out how you can beat the crowd and start trading the Palantir IPO right now.

JD.com raises $3.9 billion in 2020’s second-biggest IPO so far

IPO

JD.com, the second-largest online retailer in China, has raised $3.9 billion during its secondary listing on the Hong Kong Stock Exchange.

The company is pricing its IPO at HK$226 per share, HK$10 below the top end of its indicated range. JD.com already trades on the Nasdaq.

Shares will start trading in Hong Kong on Thursday 18th – the same day as the company holds its massive annual Anniversary Sale (known as 6.18). Last year JD.com reported sales of almost $30 billion – this week’s event will be a key test of demand as China continues to recover from lockdown and battles a fresh outbreak of Covid-19 cases.

The JD.com IPO follows a public offering by NetEase which raised $2.7 billion. Together the two tech giants have raised $6.6 billion – almost double what the rest of the Hong Kong IPOs have raised all year.

NetEase shares ended their first day of trading up 5.7%, closing HK$7 higher than its offer price of HK$123.

Hong Kong IPOs get a boost on US-China tensions

Increasing tensions between Washington and Beijing have helped stoke the Hong Kong IPO market recently. The US House of Representatives is considering a bill that would mandate US-listed Chinese companies to undergo financial audits, which could result in a number of companies being delisted.

This has prompted many companies whose shares are already traded in the US to seek a secondary listing in Hong Kong as a precaution.

NetEase acknowledged the impact that rising tensions could have in its IPO filings. Baidu founder and chairman, Robin Li, also acknowledged recently that his company could consider a secondary listing in Hong Kong if the US government tightens regulations surrounding Chinese firms.

More IPOs on the way

This could be the start of a reawakening for the IPO market in Hong Kong. China Bohai Bank Co is looking to raise over $2 billion, while both Smoore International Holdings and SK Biopharmaceuticals are expected to raise around $800 million.

Upcoming Hong Kong IPOs

  • JD.com
  • China Bohai Bank
  • SK Biopharmaceuticals
  • Hygeia Healthcare Holdings
  • Kangji Medical Holdings
  • Smore International Holdings
  • Zhenro Services Group

How to trade IPOs – 3 ways to trade IPO stocks with Marketsx

IPO stocks can offer some of the biggest trading opportunities on the market. Initial public offerings, or IPOs, attract a lot of attention and the IPO market is closely watched to find the next big stock.

Marketsx gives you three ways to trade IPO stocks: CFDs on newly listed shares, grey markets to trade companies pre IPO, and the Renaissance Capital IPO ETF.

Trade IPO stocks the day they are listed

We are always adding new stocks to the platform, and this includes many newly listed companies following recent IPOs.

Traders have been able to trade CFDs on many IPO stocks on the day of their market debut.

Use grey markets to trade pre IPO

Can’t wait to start trading the next big IPO? With our grey markets, you don’t have to. Grey markets allow you to take a position on a company pre IPO by speculating on their eventual market capitalisation.

A company’s market cap depends on the price the company sells its shares for. Pre IPO, the company will give a target price range for its shares, and this will often be adjusted higher or lower to reflect market demand.

If you think the company’s eventual market capitalisation will be higher than is currently expected, you can trade the grey market long.

If you think the company is being overvalued, and its market capitalisation will be lower than expected, you can trade the grey market short.

In the past our clients have been able to trade companies such as Lyft, Uber, Peloton, Saudi Aramco, and Aston Martin pre IPO with our exclusive grey markets. We’ll keep our article on the hottest upcoming IPOs in 2020 updated with information about future grey markets.

Renaissance Capital IPO ETF

The Renaissance Capital IPO ETF allows you to trade the performance of the freshest stocks listed in the US.

It only features stocks that went public in the last two years so it is a great way to capture the performance of the newest companies on the market.

The most significant IPO stocks are added to the ETF straightaway, and the fund is updated quarterly to make sure it includes all the important stocks to go public recently.

IPO: The ultimate trader’s guide to initial public offerings

An initial public offering or IPO can be an exciting trading opportunity. It’s the first chance that most investors and traders get to grab a slice of some of the hottest new companies.

But what is an IPO, and how does it work?

In this article:

  • IPO meaning
  • How does an IPO work?
  • IPO versus direct listing
  • Can I trade IPOs?

What is an IPO?

An IPO, also known as a flotation, is where a private company sells new shares to public investors. It’s a way of raising capital to fund further growth and innovation, and also allows existing investors to reap the rewards of backing the company during its start-up phase.

Up until this point, the company is privately owned by the people founded it, and any staff or early investors who were given shares.

How does an initial public offering work?

A company that wishes to go public will need to meet certain criteria laid out by the domestic market regulator – such as the Securities and Exchange Commission (SEC) in the United States. Companies can also choose what exchange they want to list on, such as the New York Stock Exchange or the NASDAQ, and these too have their own requirements.

Companies need the help of an underwriter or underwriters to hold an IPO. These are investment banks such as Goldman Sachs, Morgan Stanley, and JPMorgan, and are responsible for arranging and marketing the initial public offering.

It’s common for underwriters to assume all the risk of the IPO by buying all of the new shares being issued by the company, and then selling the stock to public investors.

IPOs: Roadshows and pricing

In the run-up to an IPO, a company will issue a prospectus and hold investor roadshows across the country in which it is listing in order to drum up interest in the flotation. The prospectus will give a target price range for the shares to be issued. This is often adjusted to reflect market demand as the company’s stock debut draws near.

Sometimes the stock of the company is so in demand ahead of its initial public offering that the company decides to issue more shares than originally planned – usually the underwriters are given the power to automatically increase the size of the issuance by a set amount of shares if demand warrants it.

Check out the upcoming 2020 IPOs to stay on top of the roadshows and pricing data of this year’s most anticipated public offerings.

What happens if demand is higher or lower than expected?

Although the underwriter buys the new shares at the final initial offer price, the stock can open above or below this price on its first day of trading. If the company going public and the underwriters have overestimated demand for the stock, the underwriter may have to sell the shares for a lower price than it bought them.

And if demand has been underestimated, the underwriter may be able to sell the stock for a much higher price than it bought them. Doing so is likely to damage their reputation, however, so underwriters have an incentive to try and sell the shares for as close to the initial offer price as possible.

What’s the difference between an IPO and a direct listing?

Companies who don’t want to hold an initial public offering may instead opt for a direct listing. With an IPO, the company going public is selling new shares, giving away control of more of the business.

A direct listing, on the other hand, is where a company allows its existing shareholders to sell the stock on public markets. This allows early investors to reap the benefits of backing the company, and allows the company to trade publicly without giving away control through the issuing of new shares.

A company does not need to hire underwriters in order to hold a direct listing – saving it a lot of money in fees. This also means existing investors may be able to sell their stock for a higher price.

Can I trade IPOs?

IPOs can represent some of the biggest trading opportunities on the stock market. Companies such as Beyond Meat have seen their stock surge since they went public, while others, like Uber and Lyft, have performed poorly.

With Marketsx you can trade companies before they go public with our exclusive grey markets, or trade CFDs on the hottest companies on the day they debut, as well as taking positions on ETFs that track the newest stocks on the market.

IPO market coming back to life?

Equities

The Covid-19 pandemic rocked global capital markets, creating seismic volatility in equity markets and leaving many planned IPOs Covid casualties. But as risk appetite recovers and there is still a lot of cash sitting on the side lines we are seeing the frozen IPO market starting to thaw.

JDE Peet raised €2.25bn last week in what was Europe’s biggest IPO since 2018, with shares pricing at the upper end of the proposed range and then quickly rallying from the IPO price to trade around €37. This was a very encouraging debut and may well for companies seeking to list this year – or at least in June.

Warner Music Group is due to IPO tomorrow (Jun 3rd), leading a group of companies that are expected to raise over $3bn. Warner Music is aiming to raise $1.8bn, selling 70m shares, or about 14% of the company. Shares are due to be priced at between $23 and $26 each. Plans for the IPO were shelved in February due to the coronavirus pandemic.

ZoomInfo is also due to IPO this week (Jun 4th) and will price the stock between $19 and $20, having previously expected to price between $16 and $18.

Pliant Therapeutics expects to IPO tomorrow with shares offered at between $14 and $16. It has also increased the offering from 6m shares to 9m shares, indicating decent demand.

Legend Biotech will IPO on Friday (Jun 5th) with an offering of 18.4m shares priced at $18-$20, which is expected to raise $350m.

These IPOs will be important tests for capital markets in the wake of the coronavirus pandemic, which needless to say rattled investor confidence. Clearly though, whilst sentiment is still a little frayed, we are seeing improved risk appetite and investors are sitting on chunks of cash that need to be put to work.

The S&P 500 is above 3050 and its 200-day moving average, whilst the Vix is under 30. The market is significantly calmer than it has been, albeit on forward valuations it does look rather pricey, which demands a pullback.

Nevertheless, now that central banks have all but killed bond markets, the action is shifting back to equity markets and cash needs to find a home.

We will be watching these closely to see whether it encourages some of the larger names and ‘unicorns’ such as Airbnb, Robinhood, Instacart or Palantir to come back to the IPO table this year in spite of the pandemic.

European equities rally as euro, pound crack lower

Equities
Forex
IPO
Morning Note

European markets were on the front foot on Friday morning despite a weak cue from the US and Asia as currency weakness and expectations for yet lower interest rates fuelled risk appetite. Asian shares plumbed a three-week low but European bourses are trading up again. The FTSE 100 continued the good work from Thursday to hit 7400 and make a clear break out of the recent range. With the move north a decent case to make for the 7450 area, the 61.8% retracement of the August retreat.

The S&P 500 declined quarter a percent to 2977.62 against a back drop of political uncertainty in Washington. Markets won’t like these impeachment hearings but ultimately the risk of Mr Trump being ousted by Congress appears very slim indeed.

Another stinker of an IPO – Peloton shares priced at $29 but were down $2 at $27 on the first tick and ended 11.2% lower at $25.76. First day nerves maybe but this stock has fad written all over it. Think GoPro.

On the matter of dodgy prospectuses and dubious IPOs… S&P has downgraded WeWork debt another notch, and slapped a negative outlook on for good measure.

FX – the euro now looks to be on the precipice, on the verge of breaking having made fresh two-year lows on EURUSD. Whilst the 1.09 level may still hold, the banging on the Sep 3/12 lows at 1.09250 has produced a result with overnight tests at 1.09050. We’ve seen a slight bounce early doors in Europe but the door is ajar for bears. The Euro is under pressure as ECB chief economist Lane said there is room for more cuts and said the September measures were ‘not such a big package’. How much more can the ECB feasibly do?

Sterling is tracking lower against the broader moves in favour of USD. There is a chance as we approach crunch time on Brexit that GBPUSD pushes back to the lower end of the recent range, the multi-year lows around 1.19. Bulls have a fairly high bar to clear at 1.25. At time of publication, the pound had cracked below yesterday’s low at 1.23, opening up a return to 1.2280 and then 1.2230. The short-covering rally is over – time for political risk to dominate the price action.

Bank of England rate setter Saunders made pretty dovish comments, saying it’s quite plausible the next move is a cut. In making the case for a cut now it conforms to the belief in many in the market that the Bank is barking up the wrong tree with its slight tightening bias in its forward guidance. The comments from Saunders are clearly an added weight on the pound.

On Brexit – there’s a lot of noise of course and all the chatter is about MPs’ use of language and how could Boris possibly still take the UK out of the EU by October 31st without a deal. The fact is he can and he intends to. There is some serious risk that GBP declines from here into the middle of October on the uncertainty and heightened risk of no deal. This would then be the make or break moment – extension agreed and we easily pop back to 1.25, no deal and it’s down to 1.15 or even 1.10.

Data to watch today – PCE numbers at 13:30 (BST). If the core CPI numbers are anything to go by, the Fed’s preferred measure of inflation may point to greater price pressures than the Fed has really allowed for. Core durable goods also on tap, expected -1.1%. Plenty of central bank chatter too –de Guindos and Weidmann from the ECB follow Lane and then Quarles and Harker from the Fed. Should keep us busy this Friday.

Oil is in danger of entirely fading the gap back to $54.85, the pre-attack close, having made a fresh low yesterday at $55.40. There’s still a modicum of geopolitical risk premium in there though, but bearish fundamentals are reasserting themselves over the bullish geopolitics. WTI was at $56.10, ready to retest recent lows at $55.40. Bulls require a rally to $57.0 to mark a gear change. However we are now touching the rising trend support line drawn off the August low at $50, so could be finding some degree of support.

Gold is pretty range-bound now, but we are seeing it test the $1500 level which could call for retreat to near $1482, the bottom of the recent range and key support.

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