‌‌CLARIFICATION: Britain has never been anything other than Great, but I needed the headline...

Right, the wave of UK tech IPO's continues this month...

It's gone pretty well so far - Deliveroo didn't count, because it's a food delivery company, not a tech firm...

Proper tech firms like Moonpig & Trustpilot prove that... ah who am I kidding?

If you've got a website and an app, you're a tech firm now...

Let's look at the charts and see how it's gone so far... ‌‌

MOONPIG: Listed 2nd Feb 2021

TRUSTPILOT: Listed 23rd March 2021

DELIVEROO: Listed 31st March 2021

There's a definite day one pattern...‌‌

Beyond that, there's absolutely zero correlation...

The next IPO might not even make it to day one...

That's the problem facing cybersecurity provider Darktrace ahead of their expected IPO this month...

Basically, founding shareholder Mike Lynch has a few problems with some old fraud allegations that haven't been resolved...

HP are suing and allege that Lynch & Autonomy CFO Hussain "artificially inflated Autonomy's reported revenues, revenue growth and gross margins" which resulted in Hewlett-Packard taking an $8.8 billion writedown just one year later...

Darktrace Chief Exec Gustaffson says:‌‌

“Mike is a visionary technologist and was an early investor in Darktrace but he isn't involved in the day-to-day running of the company.”

Lynch and his wife do own 18.5% of the company though...

Full details via The Telegraph here:

Mike Lynch fraud case casts a shadow over £3bn Darktrace float plan
Cybersecurity company admits criminal and civil charges against its founding shareholder “could result in a material adverse effect”

‌‌Under normal circumstances, the Darktrace listing should be highly anticipated and celebrated...

A TRUE tech listing, and find me someone who doesn't think Cybersecurity is a strong growth sector for the coming years... ‌‌

The court case is a huge dark cloud over the offering...

Darktrace told potential investors that negative publicity associating it with Dr Lynch or Autonomy "could adversely affect the group’s reputation in the cyber security, financial, investment and other communities, and could also adversely affect the group’s future share price"

It's definitely a story to monitor closely:  if the listing goes ahead, there's some serious potential for increased volatility/opportunity if those headlines hit further down the road...


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GUEST POST from ETX Capital's Andrew Saks...

"Leverage risk cannot be destroyed this way. It simply shifts where the risk is held. ‌‌Banks now hold fewer structured products on their balance sheet due to capital rules and instead act as intermediaries for shadow banks that increasingly hold them."‌‌

Give it a read 👇👇👇

The Archegos factor: Don’t let FX hedge funds eat you due to greedy banks
First it was the Swiss National Bank exercising its prerogative. Next it was the government and its lockdowns. Now it’s the fragility of the risk management procedure in the banks....

CHART OF THE DAY


Taken from Bloomberg's: Labor, Not Lumber, Will Drive Inflation

....when it comes to inflation dynamics, the key metric to watch over the next several months will be wage rates for service workers, not the dramatic, but probably transitory, increases in prices for commodities such as lumber or copper.
If we end up having an inflation problem sooner than we expect, it will probably start in the labor market.


And that's a pretty big IF 👇

Market Amnesia Still Not Cured
Back in January, I wrote the post below, outlining my views towards the ‘amnesia’ the market was experiencing, with irrational views about what the Fed would do next, and yes, that word ‘inflation’ was all important.

With A LOT going on in markets right now, it's a great time to go premium...

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