| Greetings, Here's your daily business briefing. - Dubai will IPO its city parking business
- Bumble's disappointing Q4 earnings result in layoffs
- Cocoa prices surge due to supply shortages
Thanks for reading! Stjepan
p/stjepan-kalinic | |
| 1 | | The Dubai government is set to list 25% of its public parking business, Parkin Company PJSC, through an initial public offering (IPO) as the emirate capitalizes on its expanding population. The IPO is part of the government's plan to list state-owned companies, with the subscription period opening on March 5 and expected to close on March 12. More: - The Dubai Investment Fund will sell 749.7 million shares, offering a 25% stake in Parkin. The subscription period runs from March 5 to March 12, with institutional investors participating in the book-building period until March 13.
- Dubai's population growth, expected to increase by 60% by 2040, drives the demand for public parking and is projected to grow by 60% by 2033.
- Parkin plans to pay a semi-annual dividend of either 100% of profit or free cash flow to equity for the full 2024 fiscal year.
- The company's revenue grew by 14% in 2023, reaching $212M (AED 779M). Emirates Investment Authority and Pensions and Social Security Fund of Local Military Personnel each have a reserved 5% of the offering.
- Emirates NBD Capital, Goldman Sachs Group Inc., and HSBC Holdings Plc are joint global coordinators for Parkin's IPO, with Rothschild & Co. acting as an independent financial advisor.
|     | |
| 2 | | Bumble will lay off approximately 350 employees following disappointing Q4 2023 results. Facing challenges from rival Match Group and a slowing payer growth since late 2021, Bumble plans a significant app overhaul focused on AI, enhanced safety measures, and features targeting younger audiences. 
More: - Q4 2023 results showed a $32M net loss and $273.6M in revenue, falling below Wall Street expectations and leading to a 10% stock decline in after-hours trading.
- Bumble's CEO, Lidiane Jones, announced a layoff of 30% of the workforce (approximately 350 employees) and an app overhaul to stimulate growth.
- The company's near-term product roadmap emphasizes AI, enhanced safety measures, and features that appeal to younger audiences.
- Challenges include slowing payer growth since late 2021, organizational shifts following founder Whitney Wolfe Herd's transition to the role of executive chair, and increased competition from Match Group targeting Gen Z users aggressively.
- Dating app industry-wide challenges include declining revenue from users unwilling to pay for premium add-ons, with a Pew Research study indicating lower payment rates among users under 30, the demographic seen as most desirable.
| | | |
| 3 | | Cocoa prices surged over 60% year-to-date amidst an expanding global cocoa deficit, driven by decreased production and challenges in key producing regions. The largest weekly price jump since 1999 is the result of decades of underinvestment in cocoa production, aging trees in the Ivory Coast with lower yields, and a heightened risk of supply shortages. More: - The International Cocoa Organization (ICCO) projects a widening global cocoa deficit for 2023/24, reaching -374,000 MT, driven by an 11% year-on-year decline in global cocoa production to 4.45 MMT and a nearly 5% decrease in global cocoa grindings.
- Ivory Coast, the largest cocoa producer, faces a 32% decline in cocoa shipments to ports from October 1 to February 25, impacting global cocoa supply. Nigeria, the fifth-largest cocoa producer, experiences a 15% year-on-year decrease in cocoa exports, contributing to supply concerns.
- Ghana, the second-largest cocoa producer, reduced its 2023/24 production estimate to a 14-year low of 650,000-700,000 MT, citing smuggling and unfavorable weather. Favorable growing conditions in West Africa have been compromised by crop disease and insufficient rain, leading to a potential decline in cocoa production and a global deficit.
- Hershey, Mondelez, and Nestle might face challenges passing higher costs onto consumers due to record-high cocoa prices, potentially squeezing profit margins and slowing demand growth for chocolate products.
| | | |
| 4 | | SoundHound AI reported Q4 earnings with a GAAP EPS of -$0.07, missing estimates by $0.01, and revenue of $17.15M, an 80.5% year-over-year increase but fell short by $600,00. Before earnings, the stock surged over 200% year-to-date as Nvidia and SoftBank disclosed interest per 13F filings before retreating by 18.6% by the week's end. More: - The company's combined cumulative subscriptions and bookings backlog reached $661M, marking a significant 2x growth compared to the prior year.
- SoundHound achieved an annual run rate of approximately 3.5 billion queries, reflecting a substantial 50% year-over-year increase.
- The company forecasts full-year 2024 revenue in the range of $63M to $77M, with a mid-point target of $70M, and introduces a 2025 outlook with expectations of revenue surpassing $100M and achieving positive adjusted EBITDA.
- The cash balance of $96M provides a solid financial position. Still, additional capital may aid in accelerating the expansion of its voice AI business.
- While SoundHound AI has promising products such as AI restaurant ordering and vehicle AI chat, the recent stock rally might reflect excessive hype. The company needs to demonstrate a successful execution of its business plan to justify the current valuation.
| | | |
| 5 | | The Federal Aviation Administration (FAA) has given Boeing a 90-day deadline to develop a comprehensive plan addressing "systemic quality-control issues." The company must demonstrate real and profound improvements, particularly after a door panel detachment incident on an Alaska Airlines 737 MAX 9 flight. More: - The FAA expert panel reviewed 4,000 pages of Boeing's safety management documents, conducted seven surveys, and interviewed over 250 Boeing employees.
- Boeing's leadership, including CEO Dave Calhoun, has committed to addressing FAA concerns and developing a plan to address quality issues.
- The FAA has raised questions about the duration of Boeing's production rate freeze, which has been in place since the January 5 incident, pending the development of a satisfactory plan.
- The Justice Department is scrutinizing the Alaska Airlines MAX 9 incident, and if it is determined to be a breach of a $2.5B deferred-prosecution agreement, Boeing could face criminal liability. The agreement from 2021 allowed Boeing to resolve criminal charges in the wake of two 737 Max plane crashes in Indonesia and Ethiopia.
- Boeing's production rate freeze will depend on the forthcoming results of the FAA production-line audit and findings from an expert review panel report, which was critical of the company's safety management processes.
| | | |
| 6 | | High-profile figures, including Jeff Bezos, Leon Black, Jamie Dimon, and the Walton family, have collectively sold $11B in company stocks in February, with share prices near all-time highs. Analysts speculate that the sales might be driven by executives diversifying their holdings, taking advantage of tax breaks implemented during the Trump administration, and preparing for potential changes in the political landscape. What are the numbers saying? Jeff Bezos sold Amazon shares worth $8.5B, Jamie Dimon sold $150M in JPMorgan Chase stock, and Leon Black shed $172.8M in Apollo Global Management stock, marking the first-ever stock sales for Dimon and Black. In multiple trades since February, Mark Zuckerberg sold about 1.4 million shares of Meta stock worth approximately $638M, following significant sales in the preceding three months, bringing his proceeds to $1.2B. The Walton family, heirs to Walmart's founder, sold $1.5B in Walmart stock. Contrarian perspective: While insider share sales at top-performing companies like Amazon and Meta have reached notable levels, Bloomberg's opinion columnist Jonathan Levin argues that transactions are not necessarily ominous for the market. The sales may result from executives addressing their desire for liquidity and portfolio diversification, especially after many insiders refrained from selling in late 2022 through late 2023. The lack of initial public offerings (IPOs) and the extraordinary resilience of the US consumer market are cited as factors indicating that the market may not be in a full-scale speculative frenzy. | | | |
| 7 | | Quick Hits: - Business Owners who took Visa or Mastercard from Jan. 1, 2004, to Jan. 25, 2019, apply to see if you are entitled to a portion of a $5.6 billion payout.*
- Appolo's Chief Economist Torsten Slok calls for no rate cuts in 2024. Slok expects the FED to spend most of 2024 fighting inflation. Consensus expectations went from 6 rate cuts to 3 cuts since the beginning of the year.
- Troubled EV maker Fisker is reportedly in talks with Nissan. A deal could provide the Japanese automaker with access to an electric pickup, while the struggling startup could get a much-needed financial investment.
- BHP, the largest global mining company, announced restructuring as profits hit an 8-year low. The management addressed concerns regarding their nickel operations in Australia, which have been unprofitable since 2018.
- Uncover the trends shaping the business landscape in 2024. From building trust to leveraging tech, our report shares crucial developments for success*
*This is a sponsored listing. | | | |
 | Freelance Writer | | Stjepan Kalinic is an analyst and writer with a background in institutional investment research. He's passionate about reading, playing music, lifting weights, and practicing martial sports. He values interesting books above everything else, and you can send recommendations through LinkedIn. | | This newsletter was edited by Megan LaBruna | |
| Upcoming Events | | MAR
7 | | Portfolio Diversification - Learn from knowledgable experts on the latest trends in alternative investment assets like private equity, crypto, real estate, and the art market. | | | | | | | MAR
27 | | Discover how generative AI can speed up your enterprise, expand your business model, and improve your value proposition. Network with hundreds of AI leaders.* | | | | | | * This is a sponsored event | | | |
| |
| |
