On December 11th, the U.S. Food and Drug Administration authorized the emergency use of Pfizer and BioNTech’s COVID-19 vaccine. The vaccine (and others nearing approval) are expected to reach hundreds of millions of Americans by the end of 2021. These efforts should bring an end to the most devastating global pandemic in a century. Amid the disruption of the virus and the promise of the vaccine, the initial public offerings (IPOs) market has reached record levels this year. According to data compiled by Bloomberg, more than $163 billion has been raised on U.S. exchanges by IPOs year to date. Renaissance’s U.S. IPO index, which tracks IPO value, is up an astounding 109% this year. What, if anything, is the connection between the pandemic and this year’s IPOs? It appears that some of this year’s best performing IPOs have benefitted from optimism related to the pandemic and its aftermath. Interestingly, in some cases, that optimism reflects hope that we can soon get back to “business as usual,” while in others, the thought is that the pandemic may have left us with permanent new behaviors.
On the one hand, is Airbnb. This past spring as the pandemic erupted, global travel screeched to a halt. The decline in travel had a crushing impact on airlines, hotels, and booking agencies – Airbnb was not immune. The company saw revenue tumble and it cut a quarter of its staff in May with bookings down 70% from one year earlier. Airbnb delayed its IPO multiple times in 2020, and ultimately chose to go public in early December, close to when the FDA announced authorization of the COVID vaccine. During its first day of trading, Airbnb shares rose to 113% of its December 9th IPO value, raising $3.5 billion. Despite poor financial performance during the pandemic, public markets were attracted to Airbnb on the expectation that travel will significantly increase in 2021 as vaccines roll out.
On the other hand, is DoorDash. With state and local regulations limiting indoor and outdoor restaurant dining, food-delivery services like DoorDash have experienced incredible growth in 2020. DoorDash’s revenue grew by 268% year-over-year in the third quarter of 2020. The third quarter is also the first and only period in which DoorDash has been profitable. DoorDash’s IPO came last week, and its shares rose 86% on its first day of trading. In this case, it appears investors rewarded DoorDash for 2020 growth and for the hope that digitally-powered food delivery will be an enduring new consumer behavior of the post-COVID world.
Petco may be next. Petco Health and Wellness, which has seen same store sales increase nearly 10% this year as pet adoptions and spending have surged in the pandemic, has filed its S-1 for an IPO in early 2021. Petco hopes to benefit from the same bullishness on pets that has driven Chewy’s shares up more than 150% this year.
Whether pinning hopes on a return to normalcy or arguing that we have entered a “new normal”, IPOs this year have roared with an intensity that has drawn comparisons to the dot-com craze of the early 2000’s. Will vaccines slow the current IPO frenzy as the virus is tamed and pandemic-winners come back to earth? Or, will vaccines give the public markets even more confidence? We will continue to watch. Hopefully, the comparisons to the dot-com bubble don’t foreshadow where the market is ultimately headed.
Headlines of the Week
J.C. Penney has closed its deal with mall landlords Simon Property Group and Brookfield Asset Management to buy the bankrupt department store chain’s operations, according to a press release emailed to Retail Dive. With the deal finalized, the new entity formed from Penney’s operations has exited Chapter 11. J.C. Penney leaves bankruptcy with $1.5 billion in new debt financing, which includes an asset-based facility led by Wells Fargo.
Nonantum Capital Partners, a middle-market private equity firm focused on investing in family and founder-led businesses, corporate carve-outs, and complex situations, announced the acquisition of leading direct-to-consumer jewelry retailer Ross-Simons. Ross-Simons, America’s Favorite Jeweler, offers a broad assortment of high-quality, fine jewelry across a wide range of price points from $50 to $50,000, all at compelling values. Drawing on its 70-year legacy of retail and catalog operations, the company has positioned itself as a leading multichannel, direct-to-consumer jewelry retailer with best-in-class repeat buying rates.
Apparel & Footwear
It’s the end of an era at Oxford Industries. In reporting third-quarter earnings on Wednesday, the Atlanta-based manufacturer said it will exit the Lanier Apparel business by the second half of 2021. Lanier was founded more than 45 years ago and is the second largest supplier of tailored clothing in the U.S. It produces suits under the Kenneth Cole, Cole Haan, Strong Suit, Dockers, Billy London and Nick Graham labels, along with sportswear under the Duck Head, Oxford, Cole Haan and Island Sands names. But the pandemic, and its enormous negative impact on the tailored clothing market, was the final nail in the coffin for the division which has been losing momentum for several years as its owner diversified and focused attention on its Tommy Bahama, Lilly Pulitzer and Southern Tide labels. The wind-down of Lanier is expected to be cash-positive and the company’s adjusted results exclude a $10 million pretax charge related to the Lanier Apparel exit as well as a LIFO accounting credit of $6 million, among other items.
Hong Kong fashion retailer I.T Ltd. agreed to go private in a cash deal worth about HK$1.3 billion ($168 million) with its business decimated by the pandemic and a shift to online retailing. The deal, which is backed by private equity firm CVC Capital Partners, will see non-founder shares bought at HK$3 a piece in cash, according to a Hong Kong stock exchange filing. That’s about a 55% premium to the stock’s last closing price, the filing said. As part of the proposal, the founders will retain about 51% ownership, with CVC owning the remainder. The company cited challenging market conditions, including a digital disruption to the retail industry and the Covid-19 outbreak as reasons for agreeing to the deal. The retailer’s outlets became targets in protests earlier this year because of a perceived pro-Beijing stance of one of its founders. The deal is still subject to shareholder approval.
Ascena Retail Group has received bankruptcy court approval to sell its Ann Taylor, Loft, Lane Bryant and other brands to Sycamore Partners. As previously reported, the private equity firm will acquire the Ascena businesses for $540 million on a cash-free and debt-free basis, subject to certain adjustments, and the assumption of certain liabilities. The deal is expected to close in the coming weeks. Ascena, which filed for bankruptcy in July, said that Sycamore has committed to “retaining a substantial portion of the retail stores and associates affiliated with these brands.” As of August 29, Ascena operated 1,500 stores throughout the U.S. in addition to e-commerce sites. The deal is expected to keep about 900 stores open. The sale will expand Sycamore’s retail portfolio, which includes Belk, Talbots, The Limited, Hot Topic and Torrid.
Apparel retail is set to bounce back, according to a 2021 outlook report from Moody’s Investors Service last week. The casualization accelerated by the pandemic will continue, as will online sales and healthy living trends, benefiting companies like Nike, Under Armour, V.F. Corp. and Wolverine World Wide, according to the emailed report. Work and formal attire will continue to decline, but companies like PVH Corp. and G-III Apparel Group will prosper thanks to their diversity of merchandise and “ability to tactically evolve product mix.” Moody’s expects “strong profit improvement” next year thanks to international sales (where nearly half of U.S. apparel sales as observed by Moody’s are generated), cost cutting and inventory management. As seen already this season, the latter will lead to “less discounting and more full priced sales,” analysts said.
Athletic & Sporting Goods
Sports merchandise company Fanatics has completed another acquisition to strengthen its position in the licensed sports apparel sector as speculation increases the company will eventually go public. The Michael Rubin-led company purchased licensed sports merchandise manufacturer WinCraft, the company told CNBC. WinCraft chairman Dick Pope is retiring and decided to sell the company that started in 1961, Fanatics said. With the purchase of the Minnesota-based WinCraft, Fanatics will have a more significant presence with non-apparel merchandise. WinCraft sells home, office and automotive sports-themed merchandise, such as clocks and banners.
Escalade Sports, a global leader in sports, indoor and outdoor recreational equipment and games, announced that it has acquired substantially all of the business and assets of Revel Match LLC, dba RAVE Sports, a brand known for its innovative and high-quality water recreation products. Adding this business to Escalade’s existing portfolio expands its powerful stable of recreational brands and positions the Company for continued revenue and profit growth. RAVE Sports was founded in September 1996 by a team of entrepreneurs with a vision to build a marketing and distribution platform that could quickly take innovative, alternative sport products to the worldwide recreation market. The current RAVE Sports line consists of several consumer and commercial water sports product categories that complement the original mission of the company.
The experience of COVID has brought wellness top of mind along with maintaining both physical and mental health during these trying times. Hydra Studios, an operator of wellness spaces in the city launched by two Goldman alums, is looking to serve this market through its network of spaces for people to relax, workout, and recharge at convenient locations throughout the city as we began pondering life post-COVID. Pivoting from a communal offering, the company now focuses on the individual experience, offering private suites, outfitted with HEPA air filters, that can be individually reserved for a private workout, relaxation, or even a meditation session.
Cosmetics & Pharmacy
Men’s grooming company Duke Cannon Supply Co. has received a strategic growth investment from Main Post Partners. Terms of the accord were not disclosed at press time. Founded in 2011 by Anthony Albanese and Sam Swartz and led by CEO Ryan O’Connell, Duke Cannon provides a range of grooming products including the News Anchor Hair Line, Thick Body Wash and Grunt Foot Powder. The brand began as a DTC business and expanded into independent and specialty retailers like Carhartt, Duluth Trading Co. and Ace Hardware, with recent expansion into more than 30,000 doors of the nation’s leading food, drug, and mass retailers such as Target, H.E.B., Hy-Vee, CVS, and Walgreens. Rooted in military history, the brand continues to gain inspiration from active duty soldiers and donates a portion of its profits to causes that benefit veterans.
Main Post is partnering with existing shareholders including management, the founders and original shareholder, Wayzata Brands CEO Jeff Breazeale.
Intercos’ founder and executive chairman Dario Ferrari and his family holdings Dafe have signed an agreement with an affiliate of the Singapore sovereign wealth fund GIC for the sale of minority stakes in the subholdings that control Intercos. Financial details and the size of the stake were not disclosed. At the end of the operation, which is subject to the customary approvals from antitrust authorities, GIC will therefore hold a minority stake in Dafe 3000 Srl, Dafe 4000 Srl and Dafe 5000 Srl, which together control 44.4 percent of Intercos. L Catterton-owned CP7 Beauty Luxco Sàrl holding company and Ontario Teachers’ Pension Plan also retain shares in the Italian cosmetic manufacturer, accounting for 33.75 percent and 20.59 percent, respectively. According to a statement, the deal intends to further strengthen the shareholding structure and support Intercos in its development plans. In particular, the operation will build up the company’s market presence in the Far East as Ferrari underscored the importance of the partnership with GIC.
A startup aiming to disrupt the beauty industry through social commerce has secured multi-million dollar investment. London-based AGORA has raised $6.6m in a seed investment round to expand its platform and grow its audience of ordinary brand fans looking to monetize their passion for beauty products. Launched by co-founders Riccardo Basile and Elizabeth Craft Townsend-Rose, AGORA allows users to create and monetize video content by linking directly to products from their favorite beauty brands.
The investment round, led by Draper Esprit with participation from Lakestar, Angel Capital Management and other investors, will enable the brand to reach new audiences and continue to develop the platform.
Discounters & Department Stores
With winter looming, America’s mall owners face troubling days ahead in the global health crisis, according to a new report from S&P Global Market Intelligence. S&P has picked 7 publicly traded mall owners that face exceptional risks in the coming months: CBL & Associates, Pennsylvania REIT, Simon Property Group, Taubman Centers, Macerich, Brookfield Property REIT and Washington Prime Group. Store closures have been one of these landlords’ biggest headaches in 2020: Over 11,000 retail locations have been announced for closure so far this year, according to a tracking by CoStar Group.
Walmart is getting ready to administer Covid-19 vaccinations across the country once a vaccine is approved, the company’s chief medical officer, Dr. Tom Van Gilder, said Thursday. He said the company is preparing its more than 5,000 stores and Sam’s Club pharmacies to receive the vaccine doses and have the right storage for them — such as freezers at the proper temperature. “I know we are all ready to get back to normal and enjoy life beyond the epidemic, and these vaccines will help us do that,” he said on the company’s website.
Early results of a deal between Kohl’s Corp. and Lands’ End Inc. led the two Wisconsin brands to expand their arrangement in the coming year. In late September, Kohl’s began carrying an assortment of Lands’ End products at 150 of its stores. The department store chain, based in Menomonee Falls, also carries Lands’ End products on its website. Both companies said the partnership was showing success in its early weeks. As a result, they said merchandise by Dodgeville-based Lands’ End will appear in 300 Kohl’s stores in 2021. Kohl’s has about 1,160 stores nationwide.
Emerging Consumer Companies
Calm, the San Francisco-based brand behind the meditation, sleep and relaxation app, raised $75 million from existing investors Lightspeed Venture Partners, TPG, Insight Partners, and Ashton Kutcher’s Sound Ventures. The round doubled Calm’s valuation to $2 billion. The company has benefited from the increased focus on alleviating anxiety caused by COVID. American Express cardholders in the U.S. and certain other countries, along with more than 12 million members covered by health-care provider Kaiser Permanente, currently have access to Calm at no additional cost. Calm, which is reported to have been profitable since 2016, also brought on new investors, including Goldman Sachs and Marc Benioff, CEO of Salesforce.com, as new investors. Calm will use the funding to produce and acquire new content.
Billie, the women’s shave and personal care brand that entered into a deal to be acquired by Procter & Gamble earlier this year, saw its acquisition effort thwarted by the Federal Trade Commission. The FTC filed an administrative complaint and authorized a federal lawsuit to block the deal. P&G had announced its intention to buy Billie in January for an undisclosed amount. The FTC’s rationale is that “the proposed acquisition would eliminate substantial and growing head-to-head competition between P&G and nascent competitor Billie in U.S. wet shave razor markets,” according to an FTC press release. Founded in 2017, Billie had raised $35 million at the time of the announcement.
Sunday, a Boulder-based direct to consumer lawn care company, announced that it raised $19 million in a Series B led by Sequoia Capital, with participation from Tusk Ventures and Forerunner Ventures. Founded in 2019, Sunday sells customized, eco-friendly lawn care products. To date, it has fertilized more than 10,000 acres of lawn. The company starts by taking a customer’s home address and, based on the location, determines what types of soil it will be working with. Then, by using machine learning, satellite imagery and property data, Sunday creates a custom plan with nutrients to address problem areas, such as grass health in different bio-environmental situations. The end-product includes ingredients that are hard to find in on-shelf solutions, like seaweed extract and soy protein. The investment brings total funding to $28 million, and will help Sunday grow its 40-person staff with 30 new hires.
Grocery & Restaurants
A challenge facing Mondelez International, Inc. in making mergers and acquisitions is that management is staying focused on the snacking space. “We are trying to become stronger and stronger and better and better in the snacking space,” said Dirk Van de Put, chairman and chief executive officer, “…the issue is that it’s difficult to find pure snacking companies. There are a few, but not necessarily the kind of deal(s) we’ve done. So, we are more focused on bolt-on acquisitions in attractive spaces.” Examples of past bolt-on acquisitions include Give & Go, a maker of sweet baked foods like cookies and brownies, this past April; Perfect Snacks, a maker of refrigerated nutrition bars and bites, in July 2019; and Tate’s Bake Shop, a premium cookie manufacturer, in June 2018. Mr. Van de Put identified the “bakery, pastries” and bars categories as natural extensions of Mondelez’s snacking portfolio.
Great Kitchens Food Company, Inc., a newly-formed portfolio company of Greenwich-based private equity firm Brynwood Partners VIII LP, has acquired the take-and-bake pizza business of Aryzta North America. Financial terms of the transaction were not disclosed. The acquisition immediately makes newly-formed Great Kitchens a leader in the private label take-and-bake pizza market. The disposal of the take-and-bake pizza business represents one of the first steps in Aryzta’s plans to reshape its portfolio. On Dec. 1, the company announced plans to restructure its business model into a multi-local, lean and agile structure. The new model will be geared toward reducing complexity and overhead costs, Aryzta said.
Private-equity firm the Halifax Group announced Tuesday that they will be investing once again in Papa John’s largest franchisee, PJU Holdings, Inc. (Papa John’s United), which has 194 locations across 10 states. Halifax Group had previously invested in the Birmingham, Ala.-based franchisee from 2007 to 2013 and is now reinvesting a majority stake in the company for an undisclosed amount. Papa John’s United has been a franchisee for 29 years and was previously a portfolio company of TPG Growth.
Indoor dining is shutting down indefinitely in New York City starting Monday as COVID-19 hospitalization rates climb past 5,000 for the first time in nine months on Thursday (5,164) and positivity rates continue to climb, New York Gov. Andrew Cuomo said in a press conference on Friday. There is no timeline on reopening indoor dining rooms and restaurants will only be able to rely on outdoor dining, takeout and delivery options for the foreseeable future. Earlier this week, Cuomo had warned that indoor dining would be the first to go if hospitalization rates keep rising. When asked to comment on how this latest measure would affect restaurants struggling to survive, New York City Mayor Bill de Blasio told NBC News reporters: “I feel tremendous empathy for restaurant owners, a lot of them are mom and pop businesses, we want them to survive. We need them to survive. At the same time, these numbers don’t lie. For the first time unfortunately all three of our indicators are past their thresholds. That’s a second wave. We have to fight it back to save lives. We have to fight it back to start our recovery.”
Home & Road
Lowe’s Cos. unveiled a new “total home” strategy designed to gain share in the $900 billion home improvement market and drive bigger sales in the pro-business, e-commerce and installation services. “At Lowe’s we will be committed to offering everything a homeowner needs to provide a ‘total home solution’ across every area in the home,” stated Marvin Ellison, Lowe’s president and CEO. “This includes products and services for everything needed to repair and improve the home, for DIY and pro customers alike, across all décor categories including paint, as well as simple and complex installations.” At its investor conference, the home improvement retailer reiterated its outlook, saying it expects sales to grow by about 22% this year with a comparable sales increase of 23%. After adjustments, Lowe’s forecast earnings of $8.62 to $8.72 per share in fiscal 2020.
In the third quarter earnings report framed in a letter to shareholders, RH CEO Gary Friedman said the retailer is “enjoying a tailwind that is driving increased demand for all things home, enabling us to thrive.” Net revenues for the quarter were $844 million, up 24.6% from the same period last year. Income from operations also increased 24.6% year over year, to $111.2 million from $89.2 million the previous third quarter. Friedman noted that it would be easy to lose sight of long-term strategies in the midst of short-term distractions. “While the focus of this earnings release is our third quarter results, the focus of our leadership team has been our third decade of growth.”
At Home Group reported its highest comps and best third-quarter performance since going public in 2016 as consumers continue to spend on decorating and organizing their homes amid the pandemic. The value home furnishings retailer also remains committed to brick-and-mortar expansion. Chairman and CEO Lee Bird told analysts on the company’s earnings call that At Home now expects to open 12 to 15 stores next year, higher than prior plans that called for seven to 10 stores. Long-term, the company sees the potential for 600-plus stores, he added, which is nearly three times larger than its current footprint. (At Home ended the quarter with 219 stores in 40 states.)
Lovesac, the furniture company best known for its Sactional adaptable sofas, posted a third-quarter net sales increase of 43.5%, driven in large part, by an increase in Internet sales of 125%. The company also posted its first third-quarter net profit of $2.5 million compared with a net loss of $6.7 million in the prior-year period, which resulted in a net gain per share of 17 cents compared with a net loss per share of 46 cents in the third quarter of 2020. Gross profit dollars increased by 57.3% to $41.3 million for the third quarter of fiscal 2021, which ended on Nov. 1, compared with $26.3 million for the third quarter of last year. The company said the gross profit increase was primarily due to the increase in net sales, higher average retail price due to less promotional discounts and favorable mix impact, partially offset by the impact of tariffs.
While dipping slightly from September levels and a touch behind overall retail performance, October sales at furniture and home furnishings store sales kept gaining ground in year-over-year comparisons. According to advance estimates from the Department of Commerce’s monthly report on retail sales, furniture and home furnishings store sales, adjusted for seasonal variation and trading day differences, rose 5.2% in October to $10.4 billion compared with the same month last year. While off 0.4% from September levels, sales have grown 5.3% from August through October, slightly ahead at overall retail sales increases of 5.1% for the same three-month period.
Shipments of U.S.-produced mattresses and stationary foundations are forecast to grow 1.5% in units and 3.0% in dollars next year, an industry forecast says. The International Sleep Products Assn. forecast calls for 2% unit growth in the total mattress market and 3.5% dollar growth in the total mattress market next year. The November 2020 Mattress Industry Forecast issued by ISPA includes forecasts for 2020, 2021 and 2022, and it is the only forecast report issued by ISPA this year. The bedding industry’s trade association did not issue a forecast earlier this year during the initial stages of the COVID-19 pandemic because of the “tremendous uncertainties” in the market at that time. The forecast for 2020 calls for a 4.5% unit decline for U.S.-produced shipments and a 4% unit increase in the total mattress market.
Jewelry & Luxury
Geoffroy Lefebvre, who currently serves as group digital distribution director at Richemont, will become CEO of upscale luxury site Yoox Net-a-Porter, starting Jan. 4, 2021. According to LinkedIn, Lefebvre previously served as CEO of Baume & Mercier, from 2018 to 2019; deputy CEO of Jaeger-LeCoultre, from 2017 to 2018; and managing director of operations at Vacheron Constantin, from 2014 to 2017. All those brands are owned by Richemont.
Dominion Diamond Mines has agreed to sell the Ekati diamond mine in Canada’s Northwest Territories to two company bondholders, DDJ Capital Management and Brigade Capital Management. The two second-lien lenders agreed to provide Dominion with a $70 million working capital facility and to assume Ekati’s liabilities to creditors, employees, suppliers, and surety bondholders. Dominion, which owns both Ekati and 40% of the nearby Diavik mine, filed for insolvency protection in Alberta in April. Its share of the Diavik mine was not included in the deal, which requires court approval.
Office & Leisure
GameStop shares took a beating on Wednesday following an earnings report that saw revenue plummet 30 percent. The video game retailer was down 17 percent in early morning trading as investors digested its $1 billion in revenue, short of the $1.1 billion that was expected. GameStop — which some investors hoped would pull off a solid quarter amid soaring demand for video games during the COVID-19 crisis — reported that comparable store sales fell nearly 25 percent in the quarter. The quarterly results did not include revenue from the new Xbox Series X and PlayStation 5, which were both released in November and have proved virtually impossible to find. Though the company didn’t provide a current-quarter forecast, it said it “expects to realize positive comparable store sales results and profitability in the fourth quarter,” thanks to the holiday sales rush as well as new consoles from Microsoft and Sony. GameStop posted a loss of 53 cents per share, beating the Street’s forecasted loss of 85 cents per share.
Chewy on Tuesday reported “record” net sales in the third quarter of $1.8 billion, a 45% year-over-year increase. That sales momentum continued into “Black Friday and Cyber Week with those two days being the highest … net sales days in the company’s history,” CEO Sumit Singh told analysts Tuesday. The online pet retailer also reported that its net active customers reached 17.8 million in the third quarter. Year-to-date the company said it added 5.1 million new customers, a nearly 40% increase. Net sales per active customer grew 2.8% to $363 in the quarter. Chewy narrowed its net loss to $32.8 million from a loss of $79 million a year ago.
Unlike airlines and hotels, cruise ships are having a hard time getting business restarted this year. Now even one so-called “cruise to nowhere” has found itself curtailed. Royal Caribbean’s Quantum of the Seas passenger cruise ship cut short its four-day itinerary on Wednesday, returning to Singapore a day early after an 83-year-old male passenger tested positive for Covid-19. The cruise is part of a pilot scheme launched in November that allowed two cruise lines — Royal Caribbean and Genting Cruise Lines’ Dream Cruises — to operate short, round-trip cruises with no ports of call and mandatory Covid-19 testing for all on board. Passengers were required to take a PCR test 48 to 72 hours before embarking, said Heidi Sarna, a cruise expert who is currently onboard the diverted cruise ship. “I went on Friday to get my test and got [the results] on Saturday by email,” she told CNBC. “The cruise left on Monday.” Sarna acknowledged this created “a hole” in the safety protocol.
American Airlines will start offering travelers $129 at-home Covid-19 tests, results that can help them avoid quarantines as long as two weeks. The initiative, which starts Wednesday for travel beginning Saturday, is the latest from airlines to try to encourage bookings. American said the testing plan is the first from a U.S. airline that focuses on domestic travel. LetsGetChecked, the company providing the tests, recommends that travelers order their tests at least five days before their flight. Customers booked to any of the states that require arriving travelers to quarantine, including New York, Maryland and Massachusetts, take the nasal swab test at home. Once the test is received, results are expected within 48 hours, the company said.
Technology & Internet
Airbnb’s eagerly anticipated debut IPO on Thursday capped a record year for private companies going public, amid a red-hot stock market that has barreled through a series of all-time highs. There have been 129 initial public offerings this year, compared to 110 in 2019, according to PitchBook. While the spring lockdowns had millions of people turning to delivery services such as DoorDash, Airbnb faced initial difficulties. The travel company laid off 25 percent of its global workforce and slashed executive salaries. But, months into the pandemic, Airbnb pivoted to marketing close-to-home stays and was able to get its business back on track, despite an ongoing slump in the travel industry. That resiliency was rewarded on Thursday when Airbnb listed its stock at around $68 per share, for a valuation of $47 billion. DoorDash shares were sold at $102 at the start of trading on Wednesday. The stock closed at $189.51 after the first day of trading, marking an increase of 85.79 percent — and minting three brand-new billionaires, three of the company’s co-founders.
A huge collection of states filed an antitrust lawsuit Wednesday accusing Facebook of suppressing its competition through monopolistic business practices. The lawsuit, which looks at Facebook’s actions throughout the company’s history, alleges that the company bought competitors “illegally” and in a “predatory manner” in order to grow and preserve its market power. The suit cites Facebook’s acquisitions of Instagram and WhatsApp as prominent examples. The collection of states asks the U.S. District Court for the District of Columbia to “restrain Facebook from making further acquisitions valued at or in excess of $10 million” without notifying the plaintiff states in advance. The lawsuit also asks the court for “any additional relief it determines is appropriate, including the divestiture or restructuring of illegally acquired companies, or current Facebook assets or business lines.” The state antitrust action against Facebook materialized the same week that the FTC voted to pursue its own antitrust suit against the social media giant. That vote tied a bow on a 20-month investigation into Facebook’s business, including its acquisitions of WhatsApp and Instagram — two formerly independent apps that were folded into the social giant’s business. The FTC is now calling for those companies to be spun out independently.
Finance & Economy
Consumers are spending more via Bank of America accounts this year, in the midst of the coronavirus pandemic, than they did in 2019, according to CEO Brian Moynihan. “When you look at what they’re spending year-to-date, they’ve spent more in 2020 than they did in 2019, and that is now across $2.7 trillion in money moved by our consumers,” Moynihan told CNBC’s Wilfred Frost in a Wednesday interview. Moynihan’s commentary is the latest indication that, despite a record level of infections and a mounting death toll, many Americans are showing a surprising financial resilience. Earlier in the pandemic, U.S. banks set aside tens of billions of dollars for loan losses, but defaults have yet to materialize. That’s in part due to unprecedented federal actions to stabilize markets and inject money into households and businesses.
American homeowners are $1 trillion richer as the pandemic-driven housing boom pads their pockets. As prices rise, home equity multiplies. In the past year, homeowners with mortgages, representing about 63% of all properties, have seen their equity increase by 10.8%, according to CoreLogic. That equates to a collective $1 trillion in gained equity, or an average $17,000 per homeowner, the largest equity gain in more than six years. Homeowners in some states saw greater equity gains than others. States with the hottest home prices saw the biggest gains. In Washington state, homeowners banked an average of $35,800. In California they gained $33,800 and in Massachusetts an average of $31,200.
Almost 40% of Americans plan to spend less on gifts this holiday season than they did last year, the largest such percentage since 2013, according to the CNBC All-America Economic Survey. Just 11% plan to spend more, as Americans continue to cope with surging Covid-19 cases and widespread unemployment. The average American plans to spend just $886, down 10% from their planned spending last year, according to the survey. All income groups reported planning to spend less this year compared with a year ago. And when it comes to actual dollars they plan to spend, the wealthiest Americans could be holding back the most.