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Earlier this week, Lina Khan became the Chair of the Federal Trade Commission (FTC), one of the two agencies that enforces antitrust law in the US.
Khan is a 32-year-old Columbia University Law School professor and a prominent critic of the power of large technology companies. Her appointment was confirmed in a historic 69-28 vote, with Republicans joining Democrats in a rare show of bipartisan support for Khan’s ideas.
Antitrust policy is run by a small yet international community of lawyers and economists who know each other. In every country, some of them are cheering this move, while others are horrified. But they all know it matters, because as goes the U.S. on antitrust, so goes Europe.
Nevertheless, it should be made clear that Amazon, Facebook or Google do not face immediate break-up risks. FTC commissioners can investigate and sue companies over antitrust issues but they cannot create policies. Antitrust regulation takes place in courts, where cases are slow-moving and appeals are frequent.
Therefore, Khan’s appointment does not mean the end of Big Tech, but it does signal a change of mood among politicians and regulators are starting to acknowledge that competition policy needs updating for the digital era. Link, Link2, Link3
Developers getting replaced by the code they built. According to Gartner, by 2024 80% of tech products and services will be built by people who are not tech professionals, enabled through low-code / no-code technologies. Link
JP Morgan has been piling up $500 billion in cash (!), waiting for opportunities to invest at higher rates as the FED is expected to increase rates sooner in response to rising inflation. Link
“We have a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory,” Jamie Dimon, CEO
Google’s first ever retail store is opening in New York. It will primarily feature the company’s own hardware products, including Pixel phones, Fitbits, and other devices. Link
Fake product reviews on Amazon are an increasing problem for the company. So much so that Amazon now appealed to social media companies for help. Link
AI by Google is designing new AI chips in less than 6 hours, a task which takes humans months to complete. Link
Personal savings of US consumers have accumulated to over $2 trillion since the Covid-19 breakout in March 2020. Where will all that cash end up going?
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IPOs hit annual record in less than six months. With more than six months until the year ends, US IPOs have already totaled $171 billion, exceeding the 2020 record of $168 billion. Link
Confluent, a leading infrastructure software company, filed for IPO and will be worth watching after going public. What the company does:
“As more software is used inside companies, the need for real-time (or streaming) data is ever more important. Confluent is the central nervous system that connects disparate data repositories, enabling companies to react in real-time. While modern databases are great for data at rest, Confluent is best for real-time data and their mission statement is to “set data in motion.” Confluent’s commercial offering can be deployed on premise, hosted in the cloud, and works across hybrid cloud infrastructure environments.” - Meritech
Confluent has $272 million of implied ARR, growing 55% and has a 117% dollar-based net retention rate.
The most recent financing round was a series E in April 2020 at a $4.5 billion post-money valuation. At the high end of the expected pricing range ($33/share), the fully-diluted market cap would be $10.7 billion. Based on current market prices, the expected fair market valuation would be ~$7.3 billion, or $22.6 per share.
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Active Investments
Pexip (PEXIP) - Target price: $15 (+79% to current PPS). Analysis
Docebo (DCBO) - Target price: $70 (+30% to current PPS). Analysis
Wix.com (WIX) - Target price: $330 (+10% to current PPS). Analysis
ECOMI (OMI) - Analysis
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💻 The inventor of the World Wide Web is selling his source code as an NFT.
🌈 Can we trip our way to better mental health?
🕵️ China's tech workers pushed to limits by surveillance software.
🤖 Enterprise AI trends to watch in 2021.
👔 New welcome gadget for incoming banking interns?
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Disclosure: I am long DCBO, PEXIP, WIX, OMI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from paid subscribers of my newsletter. I have no business relationship with any company whose stock is mentioned in this article.
Disclaimer: I am not a registered investment, legal or tax advisor or a broker / dealer. All investment / financial opinions expressed by me are from personal research and experience and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.