Shein’s big IPO test

Shein wants to win over Wall Street and Washington

By confidentially filing for an IPO, Shein, the ultra-fast fashion retailer, is showing ambition on two fronts.

The company and its underwriters are betting that investors will be more receptive to initial public offerings, even as high-profile market debuts have largely failed to materialize this fall. Shein is also testing whether the company can withstand the likely increasing political pressure on the Chinese-founded e-commerce giant.

The company has severed some of its most prominent ties with China. after receiving resistance from Washington. Some of the changes include moving its headquarters to Singapore and deregistering from its original incorporation in Nanjing. The company has also set up offices in Ireland and Indiana and has hired a string of lobbyists in the US

But that’s not enough to erase control. “No one should be fooled by Shein’s attempts to cover his tracks,” Senator Marco RubioRepublican of Florida, wrote in a letter to other lawmakers.

Allegations of forced labor are a major problem. Shein has been dogged by accusations that it sourced material from Xinjiang; the US has sought to ban the import of clothing from the region of northwestern China, citing human rights abuses against the Uyghur ethnic minority there.

Last year, Bloomberg reports this that some Shein products are made with Xinjiang cotton. Members of Congress and attorneys general have urged the SEC to require the company to certify through an independent process that it does not use Uighur forced labor. (The company has said it has “zero tolerance” for this practice and has no manufacturers in Xinjiang.)

Shein also hopes that investors will welcome an IPO Bankers had hoped the long-dying market for new listings would reopen this fall with offerings from chip designer Arm, grocery delivery service Instacart and sandal maker Birkenstock. Instead, those debuts quickly fell apart.

But dealmakers say 2024 is a better choice for IPOs because of improving economic and market conditions. (And since then, both Arm and Birkenstock have seen their shares rise above their listing prices.) Shein – which works with JPMorgan Chase, Goldman Sachs and Morgan Stanley – now also has high hopes for its valuation. reportedly $66 billion.

The retailer isn’t the only high-profile company betting on an IPO revival: Reddit is reportedly testing the waters for an offering, and the maker of luxury sneakers Golden goose It is also said to be taking steps towards a stock exchange listing.

HERE’S WHAT’S HAPPENING

Israel and Hamas extend their ceasefire. The weak deal opens the door for more aid to Gaza and the possible release of more hostages and prisoners. It comes a day after Benjamin Netanyahu, the Israeli Prime Minister, and Elon Musk visited the site of a deadly Hamas attack on Israelis; Musk is trying to allay concerns that he has stoked anti-Semitic sentiment on his social media platform X.

Barclays is reportedly considering a large group of investment banking clients. Such an overhaul is intended to save about $1 billion in costs and raise capital, and would target less profitable customers, according to The Financial Times. High interest rates and a slowdown in the global economy have hampered Barclays’ core businesses such as lending and dealmaking.

European regulators are raising concerns about Amazon’s $1.7 billion takeover bid for iRobot. Shares in the maker of robot vacuum cleaners fell on Monday after antitrust officials in Brussels warned that a takeover could harm competition. The European Commission plans to make a ruling on the deal in February.

Sports Illustrated removes articles after furor over AI-generated content. An investigation through futurism found that several articles on the publication’s website contained author photos and profiles summoned via artificial intelligence. The Arena Group, which has published Sports Illustrated since 2019, said a third-party vendor had done so created the questionable content.

The European technology scene is showing a partial recovery

Last year was tough for Europe’s tech industry as some $400 billion in company valuations evaporated due to market volatility and a deteriorating economy.

Now, twelve months later, things are looking better, the newspaper said Atomico’s latest annual survey, the venture capital firm. But the challenges that have hampered growth in 2022 are likely to persist for some time.

The appreciations have partially returned, according to Atomico: The total valuation of private and publicly traded technology companies has risen to $3 trillion, recovering last year’s losses and returning to 2021 boom levels.

While the underlying data offers some reason for caution – most of that increase was due to recovering public market values ​​– there was also reason for optimism. Private market valuations are largely back to five- and 10-year averages, although still lower than 2021.

Only seven new companies achieved “unicorn status” by achieving a $1 billion valuation. That’s down from 108 in 2021 and 48 last year. Meanwhile, the number of “dehorned” unicorns, or those who have fallen below the $1 billion threshold, will reach 50 by 2023, down slightly from 58 last year.

European start-ups need more capital. Total investment in the technology sector is expected to reach $45 billion this year, down 45 percent from 2022. (That’s still the third-highest year on record.) The number of so-called mega fundraising rounds in Europe fell to just 36 this year, down from 163 in 2022.

That’s partly because Europe saw a near-total decline in activity from those known as crossover investors, such as Tiger Global and Coatue, who pour large sums of money into late-stage startups. It doesn’t help, Atomico argues, that European pension funds continue to invest only a small portion of their assets in the continent’s venture capital firms.

Other notable findings from the report:

• Europe is attracting more technology workers, including from the US, than it is losing. The continent now has more AI-focused professionals than the US, although many of them still work for US tech giants including Alphabet and Meta.

• The prospects for investors to exit startups remain unclear given the still-shaky IPO market. But buyers, including both corporations and private equity firms, are still showing interest in acquiring technology startups.

If it works to pay for access to Xi

Xi Jinping, China’s leader, received a warm welcome earlier this month at a banquet in San Francisco attended by US CEOs hoping for a return to improved US-China business relations. Details of what happened behind the scenes are starting to emerge.

The CEO of Broadcom, whose $69 billion takeover of VMware was stymied by Beijing regulators, paid $40,000 to sit at Xi’s table, according to The Wall Street Journal. (Mastercard and Boeing were among the dinner’s insurers.) But the costs appear to have been worth it, The Journal reports:

A few days after dinner, China signed Broadcom’s deal. Beijing also gave New York-based payment processor Mastercard the long-awaited green light to issue cards in yuan carries its brand in the country.

Some observers saw the moves as olive branches to U.S. companies as companies grow wary of doing business in China. The moves also show how companies can become pawns in the increasingly fierce geopolitical competition between Washington and Beijing.

However, Boeing hasn’t seen that level of success: It still hasn’t struck a deal to sell more planes in China.

Rajat Gupta, the musical

In 2012, when Rajat Gupta, the former CEO of consulting giant McKinsey, was on the job tried for insider tradinghis wife and four daughters sat in the front row of the spectator gallery day in and day out.

Now his youngest daughter, Deepali Gupta, 33, has turned some of those moments into what she calls a musical tragedy, weaving the public spectacle of the scandal with her family’s internal struggles and her own troubled relationship with her father. writes Anupreeta of The Times. Tie for DealBook. The musical “United States v. Gupta” ends tonight at the 50-seat Brooklyn performance space Jac.

Deepali, a performance artist, composer and playwright, plays herself. The story is told from her perspective, using songs, transcripts, news clips (including from DealBook) and remembered conversations. Actors play multiple roles: bombastic lawyers, courtroom artists and even Judge Jed Rakoff, who also presided over the recent trial of Sam Bankman-Fried. One actor dons a bald cap for a minute to play former Goldman Sachs CEO Lloyd Blankfein. Rajat’s family members express their boredom while sharing snacks and sweets.

The focus is less on Rajat fall from grace then about how it devastated his family. Once an advisor to dozens of Fortune 500 CEOs and a hero to many performance-oriented Indian Americans, Rajat was found guilty of conspiracy and securities fraud for leaking confidential information about Goldman to Raj Rajaratnam, a friend who was then a billionaire hedge fund manager. . Rajat was eventually sentenced to prison.

When the play’s characters visit, there are moving expressions of familial intimacy – a mother dealing with a snacking habit (Jalapeño Cheetos), a father and daughter playing a card game (Sweep) – even as they tiptoe around walking the elephant in the room.

Deepali said the idea for the play took shape during the processwhen she was 22. Writing it allowed her to reassess what she remembered, the media images of the trial and how her family had protected her from the ups and downs, she said in an interview, adding that she found it “therapeutic.”

Since his release in 2017, Rajat has tried to rebuild his reputation. In 2019 he published ‘Mind Without Fear’, about his side of the matter. But the play ends with Deepali asking her father: “Are you a good man?”

READING THE SPEED

Offers

• Jeff Shell, the former head of NBCUniversal who left following an internal investigation into inappropriate conduct, is in talks to join investment firm RedBird Capital Partners. (WSJ)

• “New bidder wants to save bankrupt freight company, if Treasury goes along” (NYT)

Policy

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