Daily Brief - 🌩️ Can’t spell ripoff without IPO

TLDR: ARM’s IPO is on its way, so FT Alphaville took a look at the performance of public offerings backed by Softbank. Unsurprisingly, the results are somewhat grim.

The chart above shows the % performance of IPOs of companies backed by Softbank.

The first thing we notice is that apparently the good folks at Alphaville have forgotten how to do proper data viz - and chose a column chart instead of a bar chart. Luckily for you we’re master chartists at TOGGLE so we turned it around by 90°. You can thank us later.

The second thing we note is that buying into Softbank IPOs can be risky. If you ignore all the 2021 and 2022 vintages, the chart still looks somewhat like a sad affair - with a lot of 2019 and 2020 vintages equally underwater.

FTAV keeps going with a list of adverse factors for the IPO, which we recommend reading and which include blocking rights from Apple, NVDA-level valuations and more. Check it out here.

Long story short, be wary of Masa-backed IPOs when the market smells flirts with 20x P/E valuations.

What's happening in the markets?

This section is powered by Open AI connected to TOGGLE AI

Once again, we find ourselves in the midst of the "good news is bad news" phenomenon. The ISM US Services index has surged to a six-month high, registering at 54.5, a clear signal of economic expansion.

However, this positive development has been met with apprehension in the financial markets. Concerns are mounting that the Federal Reserve may opt to maintain higher interest rates for an extended period, leading to a drop in the S&P 500, which closed below the 4500 mark. In addition to this, the technology sector witnessed a decline as bond rates climbed.

Notably, Apple's stock suffered a blow after reports emerged that Chinese agencies would prohibit the use of iPhones in government workplace settings.

Adding to the mix, the CME FedWatch tool now reflects an almost 50% likelihood of an interest rate hike at the upcoming November FOMC meeting. This shift in expectations follows a series of robust reports, further accentuating the complex interplay of economic factors impacting the financial landscape.

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General Interest: Something on the fun side

So today we wanted to lead you down a wonderful scientific rabbit hole about the existence of mathematical problems that no algorithm can solve.

But then we realized that it’s Thursday and the market has been trending down for a few days, so we decided to keep it on the fun side instead.

Here’s some fun tweets (or whatever they’re called now). Enjoy.