đźš— Initial Porsche Offering
Hey Snackers,
If you thought Instagram beauty standards were unrealistic, wait till you see avatar beauty standards: LA modeling agency Photogenics opened an avatar division that’s already signed the flawless virtual versions of 13 real-life models.
The techy Nasdaq broke its seven-day slump yesterday, surging 2.1%. Today, the European Central Bank is expected to raise interest rates to fight record #flation. It could be a “jumbo” hike. Also on the agenda: Fed Chair Powell’s Q&A at the Cato Institute.
Volkswagen hopes to take Porsche public at $85B as “spin offerings” gain traction
Cayman, top down… Porsche is speeding toward an IPO despite a bumpy market. On Tuesday, Porsche parent Volkswagen said it plans to take the luxe-car brand public within weeks, in what could be Europe’s biggest IPO since 1999. VW could raise $10B in the listing, and plans to use the cash to boost EV production (think: electric Jettas).
- Big splash: At the high end of forecasts, Porsche could be worth $85B (almost equal to VW’s market cap). VW plans to keep a 75% stake in the biz.
- Fat margins: Pricey Porsche has long been a profit puppy for VW: last year it accounted for 3% of VW’s car sales but half of its pretax profits.
- “Supremium” surge: Luxury whips like Ferrari and Volkswagen’s Bentley are booming. New cars from brands like BMW and Tesla made up a record 17% of total US car sales in June.
IPOs take a back seat… as shaky markets scare off investors. So far this year there’ve been half as many IPOs as there were by the same time last year — and they’ve raised 70% less. But some have found success by going smaller, not bigger. In the past year:
- Splitting up: GE and Kellogg decided to split into smaller public companies to streamline operations and attract investors.
- Spinning off: Dell spun off VMware, and AT&T peeled off Warner Bros. Discovery. Back in 2015, Fiat spun off Ferrari — and Ferrari shares have nearly quadrupled.
It’s the era of “spin offerings”… public offerings that spin off from larger companies. Porsche’s planned debut shows IPOs aren’t disappearing — they’re just changing. Buzzy unicorn-style IPOs (think: rapid growth, steep losses) are getting scrapped as econ jitters grow. Just the latest: Chobani. But corporate staples like VW and GE could continue spinning off profitable brands to boost value.
Misfits Market buys “ugly produce” rival Imperfect Foods, betting demand for weird-looking blueberries will keep rising
An imperfect match… Cheers to this “ugly” couple: yesterday odd-looking-produce purveyor Misfits Market agreed to buy Imperfect Foods. Both companies deliver strange-shaped fruits and veggies at discounted prices (think: quirky carrots and dented avo that Whole Foods won’t sell). Both benefited from the online grocery boom, and now they’re joining forces:
- A prosperous pear: Misfits was last valued at $2B and Imperfect at $700M. Together, the biz expects $1B in sales (and profitability) by 2024.
- Fruitful partnership: Misfits expects to boost subscribers to 500K by adding Imperfect’s urban customers to its more rural base. It’ll also stop outsourcing delivery by using Imperfect’s vans.
Sad-lookin’ corn… still has the juice. After online grocery sales more than doubled in 2020, Misfits and Imperfect attracted new customers and raised millions to grow. Since then e-grocery demand has stayed strong. So-called ugly grocers now have two tailwinds:
- ’Flation-friendly: Groceries have gotten 13% pricier this past year, making cheaper “imperfect” foods more attractive: Misfits says its groceries cost up to 40% less than conventional alternatives.
- Sustainable branding: Misfits and Imperfect advertise their efforts to fight food waste, capitalizing on consumers’ green preferences. FYI: critics say ugly sellers don’t reduce waste but rebrand food that would’ve ended up in restaurants or products.
Sustainability doesn’t always win… but lower prices might. Sales at eco-friendly brands like Beyond Meat have wilted as demand for pricey meat alternatives dwindles. But ugly grocers have an advantage over faux-meat makers: they’re often less expensive than rivals like Albertsons and Kroger, and that could win over cost-conscious shoppers — regardless of sustainable preferences.
What else we’re Snackin’
- Plus: Apple showed off its new iPhone 14s, which start at a whopping $800. Apple's hoping features like satellite-based emergency SOS will help consumers get past the iPrice point.
- Puff: Vape maker Juul agreed to pay $438M+ to settle claims it marketed its USB-like vapes to minors. Juul’s valuation has plunged to $1.3B from $38B in 2018 as teen e-cig use wanes.
- Rypto: Regulators say bankrupt crypto lender Celsius at times probably paid old investors with new investors' money. Celsius froze users' accounts in June as crypto prices tanked.
- Censor: Saudi Arabia's demanding that Netflix pull content it says violates Islamic values. The shows and movies in question: not specified. Best guess: streaming content that includes LGBTQ+ characters.
- Crib: Homeowners are seeing their net worth fall as soaring mortgage rates tamp down house values. Home prices dropped from June to July for the first time in 32 months as rates doubled from January.
Thursday
- European Central Bank rate-hike decision
- Fed Chair Powell speaks at Cato Institute
- Earnings expected from: Zscaler, DocuSign, FuelCell Energy, and National Beverage
Authors of this Snacks own: shares of Apple, Netflix, and AT&T
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