The Metro : First Issue!

Global News and Views For the New Age Reader

Welcome to the first issue of The Metro - a free newsletter. The Metro is a curated feed of global business and technology news for the new age reader.

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Quote of The Week: Food for Thought

Save Like a pessimist, invest like an optimist ~ Morgan Housel

Cover Story: The SPAC Spectacle

Last year SPACs took Wall Street by storm. SPAC or a Special Purpose Acquisition Company is basically a blank-check company which goes public by listing on a stock exchange to raise money from public investment and eventually merges with an unlisted private company mostly early-stage companies like tech startups. This mechanism of fundraising was popular among startups as it comes with less regulatory scrutiny as compare to a traditional initial public offering. But more recently, the demand to list via SPACs has been cold with both investors and startups being cautious given poor results of listed SPAC companies. A Wall Street Journal article quoted a report by Silicon Valley Bank which suggests 50% of the startups which listed through a SPAC missed their revenue forecasts and 42% saw a degrowth in revenue. According to the data provided by stock market researchers at University Of Florida, Minmo Gahng and Jay Ritter the average share price of the tech startups which listed through a SPAC merger in 2020 has fallen 12.6%. This has clearly disappointed investors as inflows in SPAC stocks have seen a continuous decline recently. However the supply is still strong with many SPACs actively looking for startups to invest their capital. These SPACs are so desperate that they are looking to invest in anything and everything, trying to woo multiple startups simultaneously. According to the WSJ article (cited above) in one case a SPAC sent an investment pitch to a startup CEO with the logo of some other startup. Desperate times! 

(Source: The Wall Street Journal)

World’s Biggest Two-Wheeler Market goes Electric

India is going big on electric with government giving incentives to both producers and consumers to dump combustion engines and shift to electric vehicles. Not surprisingly, two-wheelers are leading the way. India is the world's largest two-wheeler market. Ergo, the trends in this market have broad impacts for the auto industry. According to a news report by Mint the sector has seen increased investments and interest on the account of consistent drop in battery prices. A report by BloombergNEF shows that Lithium ion battery price has dropped from $668 (per kilowatt hour) in 2013 to $137 (per kilowatt hour) in 2020. That's an 89% drop in cost. This is very significant as batteries make up the majority of the input material costs in EV manufacturing. Ola Electric has already announced plans establish of the world's largest electric two-wheeler plant in Tamil Nadu. However, there are many challenges to this transition. One of them is developing a network of charging infrastructure. 

(Source: Mint)

(Image Credits: Autocar/Ola Electric)

Google’s Retail Play

Google has entered the chat! The Big Tech giant which apparently makes everything from smartphones to quantum computers and self-driving cars is set to make its foray into brick-and-mortar retail. The Wall Street Journal reported that Google will open its first ever permanent retail store in New York City this summer to exhibit and sell products like Pixel phones and Fit-bit wearable. Google has, in the past, established prop-up stores in cities like Chicago but this will be the company's first permanent retail store marking its entry into physical retail segment. 

(Source: The Wall Street Journal)

(Image Credits: Bloomberg News)

Paytm plans to launch a $3 Billion IPO, India's biggest ever

Paytm, India's leading digital payments and fintech company is planning to list on Indian stock exchanges later this year via a $3 Billion initial public offering, reports Bloomberg. If everything works out this will be the biggest listing ever in India. Paytm  which counts Berkshire Hathaway Inc and SoftBank Group among its investors is India's leading digital payment service and the largest in merchants payments by market share with fierce competition from Google Pay and Walmart-Flipkart owned PhonePe. It has also diversified and expanded by offering various other financial services operations such as banking, credit cards digital wallets, wealth management and also e-commerce. It enjoys a robust network of 20 million merchants and 1.4 billion monthly transactions. Paytm's growth coincides with India's growth of digital payments and transactions. 

Between the lines: For years, Indian investors have been tracking and also investing in US tech stocks like Amazon, Facebook and Apple. The Indian markets and investors are eagerly waiting for high growth tech companies list in India. Sensing this huge demand among investors, large tech companies like Zomato and now Paytm are planning to go public. There are 57 technology startups in India which have a unicorn stautus, many of them are profitable. If these unicorns choose to go public list in Indian markets, it will give investors exposure to internet economy and also attract foreign capital from emerging markets funds. 

(Source: Bloomberg)

The Big Deal: Amazon to buy MGM Studios for $8.45B

Amazon Inc has agreed to buy MGM, the studio behind James Bond, Shark Tank, The Handmaid’s Tail, Vikings and Fargo. The valuation is almost almost double of what the Hollywood studio valued at when it put itself up for sale in January 2021. This deal will give Amazon a chance to expand it footprint in the streaming media business and compete with Netflix and Disney. The deal is a promising opportunity for its streaming service, Amazon prime Video diversify their content and create more new, high-quality content. However, the real value of this deal lies in the intellectual property assets of MGM which owns a content library of 4000 films and 17,000 hours of television. MGM Studios also own some of the most iconic film libraries and franchises like James Bond, Rocky with classic like 12 Angry Men and quality television content. This deal comes at a time when there have been many big moves in the entertainment media business - AT&T spun off its media businesses (WarnerMedia) and merged with Discovery Inc to create a single media entity. There are rumors flying around that Apple is looking to acquire and full-fledged entertainment media company to compete with the likes of Netflix, Disney and Amazon. It was reported that Apple was in talks with Redstone to buy ViacomCBS.

In Focus: Vimeo Lists on Nasdaq

(Image Credit: Anjali Sud/LinkedIn)

Vimeo, the online video platform you didn’t know about because you were too busy with YouTube! It’s in the news because Vimeo made its market debut on Nasdaq on 25th May, 2021. The stock fell 16% on listing day as the management gave guidance pointing to an unprofitable quarter on the account of new capital investments made by the company. But Vimeo has shown impressive growth in recent times. The platform started out as a high-quality premium alternative to YouTube. Hence, Vimeo also invested in making original content while operating as a video sharing platform. It was primarily a software company providing tools for professional video creators which is a niche market. Anjali Sud joined Vimeo’s parent company as Director of Marketing in 2014 and took over as CEO at Vimeo in 2017. As the CEO, she orchestrated a total transformation in product strategy. Vimeo changed from being an entertainment source to become a video editing and film-making tool for small business and all content creators thus gaining access to a wider market and a more robust user base. It is valued at $8 Billion in terms of market cap as it posted 57% sales growth and its third straight green quarter with operating profit at $1.8 million, Yahoo Finance reported. The online video platform has 1.5 million paying customers and has generated $83.8 million in revenue in Q4. Now, you may watch a marketing video or a short film on YouTube or any other platform but there is a high chance it was developed using Vimeo.

(Source: Yahoo Finance)

(Credits: @ankithharathi/Twitter )

Tech Bytes

🚗 The Popemobile - For more than 50 years various automakers like Ford and Mercedes-Benz have collaborated with the Vatican to manufacture and deliver vehicles to facilitate the Pope’s commute, for the first time in history it's going to be an all-electric Popemobile. No, it's not a Tesla. Fisker Inc, an EV startup (now a publicly traded company) has struck a deal with Vatican to deliver an electric version of Fisker Ocean SUV

🏭 Tesla’s chip factory - The global semiconductor chip shortage is disrupting supply chains causing delay in orders and forcing companies to revamp their value chain. After Peloton, fitness equipment maker, announced its plans to shift its manufacturing operations from Taiwan to the US, closer to its customers, it is being reported Tesla is now considering paying chip makers in advance to secure supply and also acquire a semiconductor manufacturing plant to meet supply requirements.

🎮 Sony betting big on Gaming - Sony recently announced their plan to invest $18.39 Billion in gaming and entertainment services. The strategic investments will be focused on expanding to mobile and online services with an objective of reaching 1 Billion consumers.

What to Watch: This Week

The Mare of Easttown on HBO (US)

A suspenseful crime-thriller starring Kate Winslet plays a small-town detective who investigating a series of murders while dealing with her complicated personal life. The story is well-paced and artfully constructed to keep the viewer interested. It starts off slowly but as the series progresses and secrets are revealed you get more invested in the characters and their lives. A perfect show to look forward to every week. The final episode of the seven-part miniseries airs on 30th May (Streaming on Disney+Hotstar in India)

(Image Credits: HBO)

What to Read:

Are mRNA vaccines safe? The Expert Take

Bloomberg published an article exploring the development and efficacy of the new mRNA vaccines. The COVID-19 pandemic swept through the world - overwhelming healthcare systems and causing significant loss of lives and economic damage. The vaccine was humanity’s most effective weapon against the deadly virus. The new COVID-19 vaccines like the ones developed by Pfizer and Moderna are based on experimental messenger RNA technology which is said to be more efficient during an epidemic or a pandemic due to its speed and flexibility. However, as the technology is new it has been a victim of dangerous disinformation campaigns promoting vaccine hesitancy among people around the world. This report Robert Langreth explains how mRNA vaccines work, the efficacy of these vaccines, risks associated and the expert opinions.

That’s all for now. See you next week!

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Editor: Durgesh Kinnerkar

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