Consumer spending, Scraping the web, a We IPO
Aug 14, 2019 | Read time: 3 min | 534 words
WADDUP. After a nice, week-long delay, the Daily (Weekly, maybe?) Something is back. And here are the headlines.
– Mastercard’s CEO Ajay Banga says that on the consumer side of things, both sentiment and spending continue to remain strong. Which is good news, because in times like these, the last thing you wanna learn is that both industry and consumer sentiment suck. Mastercard has enjoyed “double digit volume in transaction growth”, and a big part of their growth strategy is pushing the use of contactless payments. Here’s a fun fact - their CFO says that the best way to grow contactless is to work with governments to make public transport contactless-enabled. Case in point was Australia, where 80% of transactions under AUS$100 are contactless now, up from 0% 5 years ago (so in case you get a client in DSG who wants to grow contactless payments, you know what plan of action to recommend to them).
In D&A, we scrape the web from time to time. While this isn’t illegal, it’s definitely frowned upon. While sites can block you if they feel that you’re scraping them, what happens if they go to court? So far, we know that in American law atleast, its not much - the Ninth Circuit Court of Appeals says that as long as you’re pulling publicly available info, you’re good. Of course, different circuit courts may decide differently, and so the best thing to do is get your case tried in the Ninth Circuit.
While at Nomura, I used to read the name “Naka Matsuzawa” from time to time, but I never really paid much attention to his work. Well, FML because it turns out he’s been voted the best fixed income strategist for many years by several industry veterans. Now that I don’t have access to his high quality research for free, I find myself scouring the web for tidbits that he may throw to non-paying peasants such as ourselves. I got lucky -he’s taken the time out to make a nice, annotated diagram of a credit cycle, and I’m including it here cause its useful af.
Ruihua, a Chinese accounting firm, screwed up big time. Their client, Kangde Xin Composite Material Group Co. was found to have inflated its profits for 4 years by US$1.7 BILLION. As a result, 23 listed Ruihua clients have delayed plans to raise fresh funds, as have 28 IPO candidates. A timely reminder that all the e-Learnings that PwC makes us do mean something. Here’s the fun part - the maximum fine for false financial disclosures is $87,000. Small change, I think.
The We Company may file for an IPO this week, according to Bloomberg. They’re apparently targeting a September IPO, and look to raise around US$3.5 billion. Do they need the cash? Kind of. Last year, they lost US$1.9 billion, on the back of $1.8 billion in Revenue. So is $3.5 billion enough? I don’t know. What I do know is that they gotta double their revenue just to break even (roughly) AND that JP Morgan and Goldman are expected to lead the issue, and pocket 2.5-3% of the total fund amount raised as fees.
– That’s about it, see you tomorrow.