Roblox And Affirm Postponed Their IPOs, While AstraZeneca Agreed To Buy Alexion

Roblox And Affirm Postponed Their IPOs, While AstraZeneca Agreed To Buy Alexion

about 3 years ago3 mins

Games platform Roblox and fintech company Affirm were both planning to debut on the stock market this week, but – wait for it… wait for it… – they put them on hold over the weekend 🎮

What does this mean?

The amount of money raised from initial public offerings (IPOs) has hit one record high after another in the last few months, and investors have been valuing newly listed tech companies at the highest levels since the (https://en.wikipedia.org/wiki/Dot-com_bubble#:~:text=The%20dot%2Dcom%20bubble%20(also,and%20adoption%20of%20the%20Internet.) 💵 But even amid the frenzy, Roblox and Affirm are now saying they’ll wait till next year to offer their shares to public investors. Affirm kept its reasons close to its chest, but they might be similar to Roblox’s: the gaming platform admitted on Friday that Airbnb and DoorDash’s hugely successful IPOs last week made it too difficult to settle on the right price for its shares.

DoorDash and Airbnb surged in their first day of trading and largely held on to their gains

Why should I care?

Bigger picture: Aim higher.

You might’ve thought Roblox and Affirm would jump at the chance to list their shares, especially considering DoorDash and Airbnb’s share prices shot up by more than 80% and 100% on their first days of trading. But that spike actually means those companies could’ve made a lot more money than they did 🤔 See, DoorDash and Airbnb were advised to sell their shares at a specific “IPO price” that ended up being far lower than public investors thought they were worth. In other words, they could’ve sold their shares for more to start with – a situation Roblox and Affirm don’t want to find themselves in.

For markets: Sticking with tradition.

Roblox reportedly played around with the idea of a direct listing, which involves putting its shares directly onto the market. That cuts out the investment banking middle-man and its hefty fees, and lets investors directly decide how much its shares are worth ✂️ Ultimately, though, the company might’ve decided the advice of seasoned IPO professionals was well worth the extra buck or two.

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AstraZeneca Agreed To Buy Alexion

Astrazeneca image

AstraZeneca might not want to operate heavy-machinery for 24 hours: the UK drugmaker agreed to buy US biotech company Alexion for a dizzying $39 billion over the weekend, in one of this year’s biggest mergers 💊

What does this mean?

AstraZeneca hit the headlines not long ago for developing an effective coronavirus vaccine alongside the University of Oxford. But like all of us, it’s looking forward to not having to think about the pandemic every day, and its merger with Alexion will give it an excuse to shift its focus onto something else entirely: rare diseases.

Both companies seem to have been hunting for a deal for a while now 👀 Alexion, for its part, has been under pressure to find a buyer from an activist investor who’s been pushing for a change in company strategy. AstraZeneca, meanwhile, has reportedly been determined to take advantage of a soaring share price by using its shares to pay for new acquisitions.

Astrazeneca stock

Why should I care?

For markets: Odd couple.

AstraZeneca’s shares fell 6% on the news, which is more common than you’d think. A buyer’s share price often falls after an acquisition announcement, with investors worried either that it’s paying too much for the deal or that it’ll struggle to successfully integrate the new business with its own 🗄 The latter seems to be their biggest concern in this particular case: it’s not like there’s a lot of overlap between the two companies’ products, after all.

The bigger picture: No more playing games.

Dealmaking’s having a bit of a moment, with last quarter smashing records and this one on track do it all over again 🤝 And it’s not slowing down just because it’s almost Christmas: social media firm Reddit bought TikTok-rival Dubsmash on Monday in a bid to keep up with the surge in popularity of video-sharing, while video game giant Electronic Arts announced it’d be buying rival studio Codemasters in a deal worth $1.2 billion.

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