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The Fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Index. The Index, designed by IPO research firm Renaissance Capital International, LLC (the Index Provider), is a portfolio of companies that have recently completed an initial public offering (IPO) and are listed on a U.S. exchange. IPOs are a category of unseasoned equities under-represented in core equity indices. The Index is designed to capture approximately 80% of the total market capitalization of newly public companies. At each quarterly rebalance, new IPOs are added to the index and companies that have been public for three years are removed. Constituents are weighted by tradable float with individual weights capped at 10%. The Index has been constructed using a transparent and rules-based methodology.

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Chime Financial, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CHYM#NASDAQ">CHYM</a>) made a splash on Wall Street this week as its highly anticipated initial public offering saw shares soar by as much as 66% on the stock's <a href="https://www.benzinga.com/markets/equities/25/06/45921212/us-stocks-likely-to-open-lower-as-israel-strikes-iran-geopolitical-risks-offers-upside-for-dollar-say-experts">first day of trading.&nbsp;</a>
Chime made a strong debut on the Nasdaq on Thursday. The stock opened at $43 per share, well above its IPO price of $27, and surged as much as 66% during the day before closing at around $37.&nbsp;
Read Next: <a href="https://www.benzinga.com/markets/tech/25/06/45885805/nvidias-jensen-huang-sparks-quantum-stock-frenzy?utm_source=articleShare">Nvidia&#8217;s Jensen Huang Sparks Quantum Stock Frenzy</a>
Chime and its shareholders raised $864 million in the IPO and the stock's first-day pop valued the company at approximately $18.4 billion at its peak.
Chime's strong debut is seen as a positive sign for the U.S. IPO market, which has been sluggish for several years. But that may be changing as <a href="https://www.benzinga.com/markets/ipos/25/06/45874849/will-rising-stars-circle-coreweave-perform-like-past-ipo-winners-reddit-astera-labs">several other companies</a> have made successful Wall Street debuts recently.&nbsp;
CRCL: Circle Internet Group, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRCL#NYSE">CRCL</a>) continued to climb Friday after its dramatic debut last week . The IPO was priced at $31 and shares rocketed to $88 by the end of its first trading day.&nbsp;
The stock climbed to over $107 the following day and marked a two-day surge of nearly 250%, setting a new record for IPOs raising $500 million or more since 1980, according to <a href="https://fortune.com/2025/06/10/circle-ipo-stock-price-valuation-outlook/">Fortune</a>.&nbsp;
Read Next: <a href="https://www.benzinga.com/trading-ideas/movers/25/06/45851086/these-are-the-3-hottest-stock-market-themes-trending-now?utm_source=articleShare">These Are The 3 Hottest Stock Market Themes Trending Now</a>
CRWV: CoreWeave, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CRWV#NASDAQ">CRWV</a>) has also proven to be a powerhouse following its late March IPO which debuted at $40 per share. The stock was trading around $145 on Friday, up nearly 270% since its IPO, with a market capitalization of more than $71 billion.&nbsp;&nbsp;
Read Next:&nbsp;
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<li><a href="https://www.benzinga.com/trading-ideas/movers/25/06/45851086/these-are-the-3-hottest-stock-market-themes-trending-now?utm_source=articleShare">These Are The 3 Hottest Stock Market Themes Trending Now</a></li>
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Chime's IPO Marks Another Successful Wall Street Debut

Venture capitalist Chamath Palihapitiya admired Circle Internet Group&#8217;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRL#NYSE">CRL</a>) successful Wall Street debut on Monday, suggesting it could pave the way for more cryptocurrency companies to enter public markets.
What Happened: Palihapitiya took to X to comment on the recent public listing of the stablecoin issuing company. He highlighted Circle&#8217;s potential advantage over competitors, given its&nbsp;&#8220;head start&#8221; and the resources it managed to raise&nbsp;through its IPO.
&#8220;The IPO's success also suggests that public markets are open to new listings, especially from crypto companies, and reinforces that regulatory clarity may be the decisive factor in opening both private and public markets,&#8221; the tech investor added.
The SPAC King noted that Circle built an infrastructure for stablecoin issuance and settlement ahead of regulatory and legal clarity in the U.S., and he hoped that <a href="https://www.benzinga.com/markets/cryptocurrency/25/05/45510057/senate-crypto-bill-passes-key-vote-genius-act-moves-toward-final-passage">legislation defining a framework for the space</a> would be formalized soon.
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">What I Read This Week… Circle went public this week in one of the most successful IPOs in recent memory, with shares 25× oversubscribed and the company raising $1 billion, more than double expectations. Shares priced at $31 closed their first day of trading on the NYSE at $83,…
&mdash; Chamath Palihapitiya (@chamath) <a href="https://twitter.com/chamath/status/1932154943789736304?ref_src=twsrc%5Etfw">June 9, 2025</a></blockquote>
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See Also: Forget Dollars: Willy Woo Says Bitcoin Will Be Priced Against Global GDP — &#8216;Gold Used To Be That Money, BTC Is The Challenger&#8217;
Why It Matters: Circle, the issuer of USDC (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/">USDC</a>) took the Wall Street by storm, with shares popping 168% <a href="https://www.benzinga.com/crypto/cryptocurrency/25/06/45800399/circle-surges-to-69-in-nyse-debut-raising-1-1b-as-investors-bet-on-stablecoins-going-mainstream" target="_blank" rel="noreferrer noopener">from the IPO price</a> on its debut.
Palihapitiya had previously suggested that acquiring Circle could potentially be a valuable acquisition for cryptocurrency companies like&nbsp;Ripple Labs&nbsp;or&nbsp;Coinbase Global Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COIN#NASDAQ">COIN</a>), given the potential value of the stablecoin market.
However, some industry experts have <a href="https://www.benzinga.com/markets/offerings/25/06/45785682/chamath-palihapitiya-says-circle-ipo-valued-at-7-billion-means-its-a-genius-buy-for-coinbase-heres-why">advised caution</a>. Former Goldman Sachs executive Dom Kwok suggested <a href="https://www.benzinga.com/crypto/cryptocurrency/25/06/45830632/ex-goldman-executive-on-circles-168-ipo-spike-dont-rush-to-buy-stock-as-bankers-engineer-a-pop-cites-facebook-example">investors wait for the lockup period to end</a> before investing in Circle, citing potential selling by insiders and early investors.
Price Action:&nbsp; Shares of Circle were up 2.20% in after-hours trading after closing 7.01% higher at $115.25 during Monday&#8217;s regular trading session, according to&nbsp;<a href="https://pro.benzinga.com/dashboard?_gl=1&#x2A;380nj0&#x2A;_ga&#x2A;MTEyOTAyOTcxMy4xNzEzMzY0NTYy&#x2A;_ga_V7ZK73W7N0&#x2A;MTcxNDk4MzIzMi42LjEuMTcxNDk4OTE0Ni4wLjAuMA.." target="_blank" rel="noreferrer noopener">data from Benzinga Pro</a>. Since its debut, the stock has popped a whopping 271%.
Are you looking to gain exposure to cryptocurrency-linked stocks? Discover the most appealing among them based on key metrics like Momentum, Growth, and Quality with the <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-2#:~:text=Turn%20Market%20Chaos,when%20markets%20rebound" target="_blank" rel="noreferrer noopener">Benzinga Edge Stock Rankings</a>.
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Disclaimer:&nbsp;This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.<a href="https://www.benzinga.com/apis?utm_source=benzinga.com&amp;utm_campaign=article-bottom" rel="noreferrer noopener" target="_blank"></a>

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Circle IPO Success Suggests Markets Open To New Listings, Especially From Crypto Businesses, Says SPAC King Chamath Palihapitiya

Editor's Note: This story has been updated to correct an error in the USDC ticker. Ex-Goldman Executive On Circle's 168% IPO Spike: Don't Rush To Buy Stock As Bankers Engineer A ‘Pop' — Cites Facebook Example
Former Goldman Sachs executive and Web3 entrepreneur Dom Kwok advised against investing in Circle Internet Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRL#NYSE">CRL</a>) following its bumper listing, suggesting investors wait for the lockup period to end.
What Happened: In an X post dated Friday, Kwok, co-founder of EasyA, share his investment advice regarding the <a href="https://www.benzinga.com/trading-ideas/movers/25/06/45821941/circle-crcl-stock-surges-after-successful-ipo-debut-whats-going-on">recent initial public offering</a> of&nbsp;the stablecoin issuing company. He cautioned investors against buying into the hype created by the engineered &#8220;pop&#8221; on IPO day.
&#8220;As we just saw with Circle&#8217;s 168% pop, this sharp price increase creates huge excitement and bullish sentiment around the company. All eyes focus on the stock, drawing more investors in and driving price higher. but don&#8217;t fall for it,&#8221; Kwok said.
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">when i worked at <a href="https://twitter.com/GoldmanSachs?ref_src=twsrc%5Etfw">@GoldmanSachs</a>, i pulled multiple all-nighters pricing tech IPOs. if you&#39;re considering buying <a href="https://twitter.com/search?q=%24CRCL&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$CRCL</a>, read this. TLDR i would not invest in <a href="https://twitter.com/circle?ref_src=twsrc%5Etfw">@circle</a>&#39;s IPO after a 168% pop. why? when bankers price an IPO, they engineer a &quot;pop&quot; on IPO day. as we just saw with… <a href="https://t.co/XKpVzTbymv">pic.twitter.com/XKpVzTbymv</a>
&mdash; Dom (Bull/ish) &#x7C; EasyA (@dom_kwok) <a href="https://twitter.com/dom_kwok/status/1930845306222240016?ref_src=twsrc%5Etfw">June 6, 2025</a></blockquote>
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Kwok advised retail investors to wait 90-180 days after the IPO to invest, allowing for price discovery and the end of the lockup period.
&#8220;When the lockup period ends, insiders and early investors typically sell their shares, causing lots of selling pressure and pushing price down. this typically gives long-term retail investors a great opportunity to buy shares at a discount,&#8221; Kwok added. In the case of Circle, the lockup period is 180 days.
Kwok also cited the example of Facebook, which was later rebranded as Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>). After a blockbuster IPO, t<a href="https://www.benzinga.com/news/12/11/3095295/more-than-70-of-investors-dislike-facebook">he shares hit new lows </a>as the lockup period ended.
While several users backed Kwok&#8217;s analysis, WilliamNextLvl who described themselves as having &#8220;stock investing expertise,&#8221; differed, saying, &#8220;The IPO market is smoking hot right now. Ride the momentum.&#8221;
See Also:&nbsp;<a href="https://benzinga.com/markets/cryptocurrency/25/06/45751414/bitcoin-dips-below-106k-while-firms-like-microstrategy-nbx-and-k33-adopt-btc-treasury-stra" target="_blank" rel="noreferrer noopener">Bitcoin Dips Below $106K While Firms Like MicroStrategy, NBX, and K33 Adopt BTC Treasury Strategy </a>
Why It Matters: Circle&#8217;s IPO was indeed a sensation, with shares popping 168% on its Wall Street debut. Seasoned investor Cathie Wood deemed the IPO <a href="https://www.benzinga.com/markets/ipos/25/06/45819104/cathie-wood-calls-circles-ipo-an-amazing-debut">an &#8220;amazing debut,&#8221;</a> with her firm ARK Invest bagging hundreds of millions worth of the company&#8217;s shares.
The acquisition could point to Ark's bullish outlook on the stablecoin sector as Circle is the issuer of the world&#8217;s second-largest stablecoin by market capitalization, USDC (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/">USDC</a>).
Price Action:&nbsp; Shares of Circle closed 29% higher at $107.70 during Friday&#8217;s regular trading session, according to <a href="https://pro.benzinga.com/dashboard?_gl=1&#x2A;380nj0&#x2A;_ga&#x2A;MTEyOTAyOTcxMy4xNzEzMzY0NTYy&#x2A;_ga_V7ZK73W7N0&#x2A;MTcxNDk4MzIzMi42LjEuMTcxNDk4OTE0Ni4wLjAuMA..">data from Benzinga Pro</a>.
Are you looking for cryptocurrency-linked stocks for your portfolio? Check out <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-2#:~:text=Turn%20Market%20Chaos,when%20markets%20rebound">Benzinga Edge Stock Rankings</a> to filter out the best performers on key measures such as Momentum, Growth, and Quality.
Photo Courtesy: kenary820 on Shutterstock.com
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Disclaimer:&nbsp;This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.<a href="https://www.benzinga.com/apis?utm_source=benzinga.com&amp;utm_campaign=article-bottom" rel="noreferrer noopener" target="_blank"></a>

Ex-Goldman Executive On Circle's 168% IPO Spike: Don't Rush To Buy Stock As Bankers Engineer A 'Pop' — Cites Facebook Example (CORRECTED)

Editor's Note: This story has been updated to correct an error in the USDC ticker. Tech investor Chamath Palihapitiya suggested Wednesday that Ripple Labs or Coinbase Global Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COIN#NASDAQ">COIN</a>) acquiring Circle Internet Financial would be a &#8220;genius&#8221; move, given the potential value of the stablecoin market.
What Happened: Palihapitiya stated in an X post that the Circle, issuer of the world&#8217;s second-largest stablecoin USDC (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/">USDC</a>), could be a valuable acquisition for leading cryptocurrency companies.
He believed that Circle, which is 25x oversubscribed for its initial public offering and valued at around $7 billion, could be worth much more in the future. &#8220;If someone can buy it&nbsp;for even $12-13 billion, that's a&nbsp;steal, imo, for what this&nbsp;business could be worth in&nbsp;20 years,&#8221; Palihapitiya added.
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<a href="https://twitter.com/chamath/status/1930417399368691860" title="https://twitter.com/chamath/status/1930417399368691860">https://twitter.com/chamath/status/1930417399368691860</a>
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Coinbase and Ripple didn&#8217;t immediately return Benzinga&#8217;s request for comment on this suggestion.
See Also:&nbsp;<a href="https://benzinga.com/crypto/cryptocurrency/25/06/45784755/elon-musk-who-called-trumps-one-big-beautiful-bill-a-disgusting-abomination-responds-to-coinbase-ceos-warning-that-bitcoin-could-replace-dollar" target="_blank" rel="noreferrer noopener">Elon Musk, Who Called Trump&#8217;s &#8216;One Big Beautiful Bill&#8217; A &#8216;Disgusting Abomination,&#8217; Responds To Coinbase CEO&#8217;s Warning That Bitcoin Could Replace Dollar If Congress Isn&#8217;t Held Accountable</a>
Palihapitiya also predicted a competition for stablecoin dominance among major companies like Stripe, Square (now Block, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xyz#NYSE">XYZ</a>), Ripple, and Coinbase. 
&#8220;The company that builds the most efficient infrastructure and sells it for cheapest: cost-plus (with a thin margin on top) will probably take this market,&#8221; he added.
Why It Matters: Palhapitiya&#8217;s observation comes after Circe priced its IPO at $31 per share, above the previously marketed range of $27 to $28 per share. The company will now offer 34 million shares for $31 each when it&nbsp;debuts on the New York Stock Exchange&nbsp;on Thursday under the ticker &#8220;CRCL&#8221;, raising about $1.05 billion.
Circle will finally go public after an unsuccessful attempt in 2021. The 2021 SPAC deal was abandoned due to regulatory delays and market turbulence caused by the&nbsp;<a href="https://www.benzinga.com/markets/cryptocurrency/23/10/35445270/the-true-cost-of-the-ftx-collapse-how-much-did-sam-bankman-fried-really-make" target="_blank" rel="noreferrer noopener">collapse of crypto exchange</a>&nbsp;FTX.
Circle will join other cryptocurrency-related stocks like Coinbase and Block on Wall Street. Check out&nbsp;Benzinga Edge Stock Rankings&nbsp;score to see&nbsp;<a href="https://www.benzinga.com/premium/ideas/benzinga-edge-2#:~:text=Turn%20Market%20Chaos,when%20markets%20rebound" target="_blank" rel="noreferrer noopener">how these stocks rank</a>&nbsp;in various metrics like Momentum, Growth and Quality.
Photo Courtesy: Kathy Hutchins on Shutterstock.com
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Disclaimer:&nbsp;This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.<a href="https://www.benzinga.com/apis?utm_source=benzinga.com&amp;utm_campaign=article-bottom" rel="noreferrer noopener" target="_blank"></a>

Chamath Palihapitiya Says Circle IPO Valued At $7 Billion Means It's A 'Genius' Buy For Coinbase, Here's Why (CORRECTED)

Cryptocurrency and stock trading platform eToro Group Ltd. priced its upsized initial public offering at $52 per share on Tuesday ahead of its Wall Street debut.
What happened: The Israeli firm offered 11.92 million shares at $52 apiece, above its target range of $46 to $50. The offering includes 5,961,509 Class A common shares sold by eToro and 5,961,509 Class A common stock sold by existing shareholders.
The shares are expected to begin trading on the Nasdaq stock exchange on Wednesday, under the ticker symbol &#8220;ETOR,&#8221; according to a statement issued by the company.
Goldman Sachs Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GS#NYSE">GS</a>), Jefferies Financial Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JEF#NYSE">JEF</a>), UBS Group AG (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UBS#NYSE">UBS</a>) and Citigroup Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/C#NYSE">C</a>) are the lead underwriters for the IPO.
See Also:<a href="https://www.benzinga.com/25/04/44621245/gold-backed-cryptos-match-yellow-metals-highs-following-trumps-liberation-day-shock"> </a><a href="https://www.benzinga.com/25/05/45339966/bitcoin-creator-satoshi-nakamotos-estimated-wealth-crosses-bill-gates-amid-apex-cryptos-sharp-rebound">Bill Gates Left Behind By Satoshi Nakamoto: Bitcoin Creator&#8217;s Wealth Now Eclipses That Of Microsoft Co-Founder Amid Crypto&#8217;s Sharp Rebound</a>
Launched in 2007, eToro is a multi-asset trading platform, allowing investments in stocks, commodities and cryptocurrencies such as Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>). 
Cryptocurrency-linked stocks already have a substantial presence on Wall Street, including Coinbase Global Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COIN#NASDAQ">COIN</a>), which is <a href="https://in.benzinga.com/markets/cryptocurrency/25/05/45365186/coinbase-stock-jumps-nearly-11-after-hours-monday-heres-why">set to join</a> the S&amp;P 500 index and Robinhood Markets Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HOOD#NASDAQ">HOOD</a>).
Visit <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-2#:~:text=Turn%20Market%20Chaos,when%20markets%20rebound" target="_blank" rel="noreferrer noopener">Benzinga Edge Stock Rankings</a>&nbsp;to discover more equities in this cohort and see how they score across vital metrics.
Photo Courtesy: Grey82 On Shutterstock.com
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="512" height="186" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/05/13230717/Screenshot-2025-05-14-083653.png" alt="" class="wp-image-914338" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/05/13230717/Screenshot-2025-05-14-083653.png 512w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/05/13230717/Screenshot-2025-05-14-083653-300x109.png 300w" sizes="(max-width: 512px) 100vw, 512px" /></figure>
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eToro Set For Nasdaq Debut, Crypto And Stock Trading Platform Announces Upsized IPO Priced At $52 Per Share

Circle Internet Financial, the issuer of the world&#8217;s second-largest stablecoin, USD Coin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/">USDC</a>), filed a prospectus for an initial public offering with the Securities and Exchange Commission on Tuesday.
What Happened: The company plans to list its Class A common stock on the New York Stock Exchange&nbsp;under the ticker symbol "CRCL," according to an S-1 registration statement, a prerequisite for firms to go public.
The initial offering price range and the number of shares to be offered were not disclosed in the filing.
&#8220;Operating as a U.S.-listed public company represents our continued dedication to transparency and accountability, as we will become subject to the reporting, corporate governance, and other requirements that are applicable to a public company listed on the New York Stock Exchange,&#8221; Circle CEO Jeremy Allaire said.
See Also:<a href="https://www.benzinga.com/24/12/42735744/pharma-bro-martin-shkreli-predicts-doom-for-michael-saylors-microstrategy-as-stock-dips-below-300-in-after-hours-trading"> </a><a href="https://www.benzinga.com/25/03/44555553/will-the-greatest-of-them-all-trump-memecoin-make-its-way-to-trump-media-etfs-polymarket-bettors-think-its-unlikely">&#8216;Greatest Of Them All&#8217; TRUMP Memecoin Headed for Trump Media ETFs? Polymarket Bettors Think It&#8217;s Unlikely</a>
Why It Matters: This latest IPO filing marks Circle&#8217;s second major attempt to go public. The 2021 SPAC deal was abandoned due to regulatory delays and market turbulence caused by the <a href="https://www.benzinga.com/markets/cryptocurrency/23/10/35445270/the-true-cost-of-the-ftx-collapse-how-much-did-sam-bankman-fried-really-make" target="_blank" rel="noreferrer noopener">collapse of crypto exchange</a>&nbsp;FTX.
Following a brief de-pegging during the Silicon Valley Bank <a href="https://www.benzinga.com/government/23/03/31323955/the-big-picture-why-silicon-valley-bank-collapsed-a-simple-explainer">crisis</a>, when $3.3 billion in reserves were temporarily locked, USDC has since recovered, now boasting a $60 billion market capitalization, making it the second-largest dollar-pegged cryptocurrency after Tether (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/">USDT</a>).
The IPO filing follows President Donald Trump&#8217;s push to <a href="https://in.benzinga.com/markets/cryptocurrency/25/03/44420122/donald-trump-calls-for-stablecoin-legislation-lauds-bitcoin-reserve-biden-got-a-fraction-of-their-value">pass stablecoin legislation</a> to enhance the U.S. financial system and maintain the dollar&#8217;s global dominance.
If approved, Circle will join other cryptocurrency-related stocks, such as Coinbase Global Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COIN#NASDAQ">COIN</a>) and Block Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XYZ#NYSE">XYZ</a>), on Wall Street. Check out Benzinga Edge Stock Rankings score to see <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-2#:~:text=Turn%20Market%20Chaos,when%20markets%20rebound">how these stocks rank</a> in terms of Growth, a measurement of the asset&#8217;s combined historical expansion in earnings and revenue.
Photo Courtesy: wei-ya2019 on Shutterstock.com
Read Next:&nbsp;
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<li><a href="https://benzinga.com/markets/cryptocurrency/22/11/29640123/just-in-crypto-com-suspends-these-withdrawals-deposits-on-solana-chain" target="_blank" rel="noreferrer noopener">Crypto.com Suspends These Withdrawals, Deposits On Solana Chain</a></li>
</ul>

$USDT

USDC

Circle, Issuer Of the World's Second-Largest Stablecoin, Files For IPO Amid Trump's Support For Dollar-Pegged Cryptos

CoreWeave's rapid rise in the AI cloud space has made <a href="https://www.benzinga.com/topic/ipo">its upcoming IPO</a> one of the most anticipated in tech. CoreWeave plans to trade its shares on the Nasdaq under the ticker symbol &#8216;CRWV.&#8217;
But beneath the excitement, there are risks investors shouldn't overlook—especially as insiders cash out ahead of the public offering. 
Here are three major concerns to keep in mind.
<h2 class="wp-block-heading">1. Nvidia Dependency Is A Double-Edged Sword</h2>
CoreWeave's success is tied almost entirely to Nvidia Corp.'s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) cutting-edge GPUs, which power its cloud infrastructure for AI workloads. While this partnership has fueled growth, it also creates risk.
Nvidia could shift priorities, limiting CoreWeave's access to its chips in favor of tech giants like Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), or Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>). A sudden disruption in supply would hit CoreWeave hard.
Investors should also note that Nvidia itself has invested in CoreWeave, which raises questions about how independent the company truly is.
Read Also: <a href="https://www.benzinga.com//node/44053318">Nvidia-Backed CoreWeave Eyes $4 Billion IPO: Is This AI&#8217;s Next Big Test?</a>
<h2 class="wp-block-heading">2. A $19 Billion Valuation Feels Pricey</h2>
CoreWeave's valuation has skyrocketed from $2 billion in 2023 to $19 billion in just over a year &#8211; an almost tenfold jump. While demand for AI infrastructure is booming, investors should question whether the company's rapid growth justifies such an aggressive price tag. 
Even more concerning, insiders are reportedly selling shares ahead of the IPO, signaling potential doubts about long-term valuation sustainability. According to the company&#8217;s <a href="https://www.sec.gov/Archives/edgar/data/1769628/000119312525044231/d899798ds1.htm?utm_campaign=%5BREBRAND%5D+RTSU+-+Aut&amp;utm_content=1109&amp;utm_medium=email&amp;utm_source=cio&amp;utm_term=129#toc899798_13">IPO prospectus</a> released Monday, founders and former commodities traders Mike Intrator, Brian Venturo, and Brannin McBee each sold at least $150 million in stock ahead of the cloud provider's planned public debut, <a href="https://www.theinformation.com/articles/coreweave-founders-cashed-out-nearly-500-million-before-ipo?utm_campaign=%5BREBRAND%5D+RTSU+-+Aut&amp;utm_content=1109&amp;utm_medium=email&amp;utm_source=cio&amp;utm_term=129">reported</a> The Information.
If those closest to the company are cashing out, should new investors be eager to jump in?
<h2 class="wp-block-heading">3. Competition From Tech Giants</h2>
The AI cloud race is heating up, and CoreWeave isn't the only contender. It faces competition from Amazon Web Services, Microsoft Azure, and Google Cloud, which have far more resources, existing enterprise relationships, and the ability to scale AI services faster.
CoreWeave may have a first-mover advantage in some niche areas, but sustaining its edge against trillion-dollar tech giants will be an uphill battle.
CoreWeave's IPO will likely generate plenty of buzz, but investors should take a step back. With Nvidia dependency, an aggressive valuation, and fierce competition, the risks are just as notable as the opportunities. 
And when insiders are selling shares before the public even gets a chance to buy in, it's worth asking: what do they know that you don't?
Read Also: 
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<li><a href="https://www.benzinga.com//node/44100280">Nvidia-Backed CoreWeave Files For IPO Amid Explosive AI Growth, Revenue Surges 737% To $1.9 Billion</a></li>
</ul>
Image via Shutterstock

Long Ideas

AMZN

GOOG

GOOGL

MSFT

NVDA

CoreWeave's IPO: 3 Major Red Flags Investors Can't Ignore

Cryptocurrency custodian company BitGo, Inc. was contemplating an initial public offering listing later this year, according to a media report on Tuesday.
What happened: The California-headquartered company was in talks with potential advisors for a listing that could come as early as the second half of 2025, Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-02-11/crypto-custody-firm-bitgo-said-to-weigh-ipo-as-soon-as-this-year">reported</a>, citing sources familiar with the matter.
Discussions about the IPO are ongoing, and no final decisions have been made. BitGo didn't immediately return Benzinga's request for comment.
See Also:<a href="https://www.benzinga.com/24/12/42735744/pharma-bro-martin-shkreli-predicts-doom-for-michael-saylors-microstrategy-as-stock-dips-below-300-in-after-hours-trading"> </a><a href="https://www.benzinga.com/25/02/43584910/man-who-accidentally-lost-his-775-million-bitcoin-stash-expresses-desire-to-buy-the-landfill-site">Man Whose $775 Million Bitcoin Fortune Lies Buried In A Landfill Now Wants To Buy The Trash Heap</a>
Why It Matters: BitGo provides regulated custody for digital assets, including Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>), and claims to manage over $100 billion in assets under custody.&nbsp;
Known for its multi-signature wallets, BitGo also offers <a href="https://www.benzinga.com/content/41819000/the-9-most-credible-crypto-recovery-companies">recovery solutions</a> to clients who have lost access to their private keys or backup passcodes.
Cryptocurrency behemoth Galaxy Digital expressed interest in acquiring BitGo in 2021 but terminated the deal later, leading to <a href="https://www.benzinga.com/content/39021028/bitgos-100m-suit-against-galaxy-gets-green-light-from-delaware-supreme-court">legal flashpoints</a> between the two entities.
The company's CEO, Mike Belshe, was one of the <a href="https://www.benzinga.com/markets/cryptocurrency/24/10/41357154/crypto-lobbyists-are-quietly-influencing-2024-election-this-is-their-playbook">prominent financial backers</a> of Donald Trump's presidential campaign last year.
The IPO speculation suggested increased optimism for a more accommodative cryptocurrency policy under the Trump administration.
Image: Shutterstock/ MaximP
Read Next:&nbsp;
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<li><a href="https://www.benzinga.com/markets/cryptocurrency/25/02/43581896/analyst-who-nailed-2021-crypto-collapse-now-says-worst-of-bitcoin-could-come-in-next-few-weeks">Analyst Who Nailed 2021 Crypto Collapse Now Says Worst Of Bitcoin Could Come In Next Few Weeks</a></li>
</ul>

BitGo Reportedly Considering IPO Later In 2024—Crypto Custody Company Lays Claim To $100 Billion In Assets

Cloud-based private company Databricks isn't in a <a href="https://www.benzinga.com/general/politics/24/03/37896102/nancy-pelosi-cathie-wood-nvidia-now-share-investments-in-this-pre-ipo-high-growth-artificial-int">rush to go public</a>.
What Happened: While the San Francisco-based company is experiencing growth and was recently valued at $62 billion, 2024 wasn&#8217;t the year to file an initial public offering, Databricks CEO and co-founder Ali Ghodsi said at the recent <a href="https://www.axios.com/2024/12/10/watch-axios-event-ai-sf-summit-2024">Axios </a>AI Summit.
"This year was an election year. We wanted to get some stability — people are worried about interest rates, inflation,&#8221; he said, as reported by <a href="https://techcrunch.com/2024/12/17/its-dumb-to-ipo-this-year-databricks-ceo-explains-why-hes-waiting-to-go-public/">TechCrunch</a>. &#8220;So we said &#8216;Look, it's dumb to IPO this year,&#8217; so we're definitely going to wait.&#8221;
Ghodsi said the recent Series J round allowed some early employees the ability to cash out. The funding round, which was large at $10 billion, could have been larger based on demand, according to Ghodsi.
"I saw this Excel sheet where they kept a tally of all the people that want to invest. It was $19 billion of interest, and I almost fell off the chair,&#8221; he said. 
The original goal was to raise $3 billion to $4 billion, before the company pushed the funding amount higher.
While Databricks didn't choose the IPO route in 2024, the company could be one of many to go public next year.
"The earliest theoretical possibility of an IPO would be next year,&#8221; Ghodsi said, noting that the IPO could also push out to 2026 instead. It's less important to go public now than in past years, he explained.
Ghodsi also recognizes that high interest in artificial intelligence companies and ballooning valuations could signal a potential bubble for the sector.
"I mean, it's peak AI bubble. It doesn't take a genius to know that a company with five people which has no product, no innovation, no IP — just recent grads — (is not) worth hundreds of millions, sometimes billions."
Billion-dollar valuations on AI startups that have no product signal a bubble, Ghodsi added.
Check This Out: 
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<li>Lawmakers Made Huge Investments This Year. <a href="https://www.benzinga.com/gov-trades/?utm_source=BZprocontent121824">Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool</a></li>
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Why It's Important: A potential IPO of Databricks could come with high investor interest thanks to its high growth and <a href="https://www.benzinga.com/news/24/06/39305440/ai-startup-which-counts-nancy-pelosi-cathie-wood-and-nvidia-among-its-investors-forecasts-2-4b-annua">popular backers</a>, including Nvidia Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), U.S. Rep. Nancy Pelosi (D-Calif.) and Cathie Wood.
Pelosi and her venture capitalist husband Paul Pelosi took a $1 million to $5 million stake in the company according to a filing from the former Speaker earlier this year.
Pelosi represents District 11 of California in the U.S. House of Representatives. The region includes San Francisco, where Databricks is based.
Wood and Ark Invest own a stake in the company through the Ark Venture Fund (ARKVX), which <a href="https://www.benzinga.com/markets/cryptocurrency/22/02/25420755/ark-funds-launching-new-fund-that-could-invest-in-private-companies" target="_blank" rel="noreferrer noopener">launched in 2022</a>&nbsp;and gives investors access to private companies. Databricks is the tenth largest <a href="https://www.ark-funds.com/funds/arkvx#hold">holding </a>in the fund as of Nov. 30, representing 3.6% of assets.
Nvidia has been an investor and partner in the company for several years. Companies that have gone public via SPAC merger or IPO, and later disclose Nvidia as an investor, have <a href="https://www.benzinga.com/news/24/07/39860370/serve-robotics-stock-rises-after-nvidia-discloses-10-stake">seen shares rise</a> with increased investor interest.
Databricks&nbsp;<a href="https://www.databricks.com/company/newsroom/press-releases/databricks-raises-series-i-investment-43b-valuation#:~:text=San%20Francisco%2C%20CA%20%E2%80%94%20September%2014,price%20per%20share%20at%20%2473.50." target="_blank" rel="noreferrer noopener">raised&nbsp;</a>$500 million in funding in September 2023 with the company valued at $43 billion.&nbsp;T. Rowe Price Group Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TROW#NASDAQ">TROW</a>) led the investment round.
Other investors in the <a href="https://www.benzinga.com/startups/23/10/35065151/databricks-valuation-skyrockets-to-43-billion-techs-new-powerhouse-backed-by-nvidia-and-capital-one">September funding round</a> included&nbsp;Andreessen Horowitz, Baillie Gifford, ClearBridge Investments, Fidelity Management, Franklin Templeton, Counterpoint Global, Ontario Teachers&#8217; Pension Plan&nbsp;and&nbsp;Capital One Financial Corp&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COF#NYSE">COF</a>).
Databricks competes with Snowflake Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SNOW#NYSE">SNOW</a>), which went public at $120 per share in 2020. The company saw shares open at $245 due to huge demand. Snowflake stock is down 11% year-to-date.
Ghodsi hinted that Databricks is focusing on its rivalry with Snowflake to gain new business.
"We had a program called ‘SnowMelt.' We were going after Snowflake and we demonized them, but that's behind us," Ghodsi said at the Axios event. Databricks is also working on competing with larger companies like Salesforce (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRM#NYSE">CRM</a>) and Microsoft Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) according to the report.
Data and AI will be more important in people's lives going forward and Databricks is well-positioned to take advantage of this trend, Ghodsi predicts.
The company expects to hit positive free cash flow for the first time and have a $3 billion revenue run rate for the fiscal year ending Jan. 31.
Read Next: 
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<li><a href="https://www.benzinga.com/24/12/42538504/biden-endorses-ban-of-congressional-stock-trading-nobody-in-the-congress-should-be-able-to-make-money-in-the-stock-market-while-in-office">Biden Backs Congressional Stock Trading Ban: &#8216;Inside Track&#8217; To Wealth</a></li>
</ul>
Image: Shutterstock

Politics

SNOW

TROW

Nancy Pelosi, Cathie Wood, Nvidia-Backed Databricks Waits To Go Public: 'Dumb To IPO' In Election Year

ByteDance, the parent company of the globally popular app TikTok, has set its valuation at a whopping $300 billion. This marks one of the highest valuations the company has seen to date.
What Happened: ByteDance&#8217;s valuation was established in a recent share buyback offer. This move indicates the company&#8217;s optimistic outlook on its growth trajectory, despite the potential ban on TikTok in the U.S., a decision mandated by a law signed by President Biden earlier this year.
According to a report <a href="https://www.wsj.com/tech/tik-tok-byte-dance-value-9796a8d4">by</a> the Wall Street Journal, ByteDance&#8217;s valuation has consistently been on the rise in recent share buybacks over the past year, reflecting the company&#8217;s rapid global growth.
In October 2023, ByteDance valued itself at nearly $225 billion, which was further boosted to $268 billion in a December 2023 buyback.
Interestingly, the return of President-elect Donald Trump to the White House is seen as a positive development for TikTok&#8217;s future in the U.S. by ByteDance investors. 
Also Read: <a href="https://www.benzinga.com/news/24/09/40866761/is-amazon-eyeing-tiktok-for-a-possible-acquisition">Is Amazon Eyeing TikTok For A Possible Acquisition?</a>
Trump, who had initially supported a ban on the app, reversed his stance during his recent campaign after a meeting with billionaire Jeff Yass, a major ByteDance investor.
ByteDance has been actively buying back shares at approximately $180 per share, a strategy that provides liquidity to investors and early employees, especially in the current lukewarm IPO market.
Why It Matters: The company&#8217;s high valuation and optimistic outlook come despite the looming threat of a TikTok ban in the U.S. This potential ban, initiated by President Biden, could significantly impact the company&#8217;s user base and revenue.
However, the return of Donald Trump to the presidency and his reversal on the TikTok ban, following a meeting with a major ByteDance investor, has brought a ray of hope for the company&#8217;s future in the U.S. market.
ByteDance&#8217;s strategy of buying back shares at a high price point not only reflects its confidence in its growth trajectory but also provides liquidity to its investors and early employees, a crucial factor in the current tepid IPO market.
Read Next
<a href="https://www.benzinga.com/news/24/04/38348328/tiktok-sale-or-ban-social-media-giants-future-hangs-in-balance-as-house-passes-controversial-bill" target="_blank" rel="noreferrer noopener">TikTok Sale Or Ban? Social Media Giant's Future Hangs In Balance As House Passes Controversial Bill</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock

Bytedance Valuation Soars To $300B Despite Threat Of US TikTok Ban

Editor&#8217;s Note: This article has been updated with the company&#8217;s response.
In a surprising turn of events, Games Global Ltd, a UK-based company known for its online casino games, has decided to pull its initial public offering (IPO) from <a href="https://www.benzinga.com/topic/initial-public-offering">the U.S</a>.
What Happened: Games Global <a href="https://www.businesswire.com/news/home/20240513132745/en/Games-Global-Postpones-Initial-Public-Offering">announced</a> on Monday that it has postponed its initial public offering in the United States. While investor interest was strong, the decision was made due to the continued positive performance of the company's underlying business and the anticipated trajectory following its recent entry into the U.S. gaming market. 
According to the company, the board of directors believes delaying the offering is in the best interests of stakeholders and will continue to monitor the timing for the proposed offering, while evaluating all strategic opportunities that align with the company's long-term strategy.
A Games Global spokesperson told Benzinga, &#8220;Our team remains committed to delivering the most innovative games on the market. We will continue to monitor the capital markets going forward and make the appropriate reconsiderations as to an IPO in the future.&#8221; 
See Also: <a href="https://www.benzinga.com/markets/cryptocurrency/24/05/38776144/jpmorgan-reports-760k-spot-bitcoin-etf-holdings-even-as-ceo-jamie-dimon-called-for-shuttin?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">JPMorgan Reports $760K Spot Bitcoin ETF Holdings Even As CEO Jamie Dimon Called For Shutting Down Crypto</a>
The company, which was founded in 2021, had planned to raise $254 million through its IPO. The proposed price range was <a href="https://www.benzinga.com/insights/ipos/24/05/38793038/preview-games-global-limited-set-to-ipo-tomorrow">$16 to $19 per share</a>, which would have valued the company at around $2.0 billion. The IPO was expected to be listed on the NYSE under the symbol GGL.
Why It Matters: Games Global&#8217;s decision to withdraw its IPO comes as a surprise, especially after the company had set the terms for its IPO just a week ago. The company announced plans to offer 14.5 million shares, with 59% of the <a href="https://www.renaissancecapital.com/IPO-Center/News/104515/Online-casino-games-developer-Games-Global-sets-terms-for-$254-million-US-I">shares</a> being secondary.
Games Global&#8217;s decision to withdraw its IPO also comes after the company had secured an exclusive deal with the UFC for branded slot games, as reported by <a href="https://news.worldcasinodirectory.com/games-global-secures-exclusive-deal-with-ufc-for-branded-slot-games-113295">World</a> Casino Directory. This partnership is expected to further boost the company&#8217;s standing in the online gaming industry.
Before that, Games Global and AreaVegas Games launched a new game, Area Link&#x2122; <a href="https://europeangaming.eu/portal/latest-news/2024/05/07/158478/games-global-and-areavegas-games-unleash-the-mythical-beast-in-area-link-dragon/">Dragon</a>, adding to its extensive portfolio of more than 1,300 games.
Read Next: <a href="https://www.benzinga.com/markets/cryptocurrency/24/05/38753994/cardano-founder-charles-hoskinson-says-voting-for-biden-is-a-vote-against-american-crypto-?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Cardano Founder Charles Hoskinson Says Voting For Biden Is A &#8216;Vote Against American Crypto Industry&#8217;</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock

Gaming

Topics

Global

Games Global Withdraws US IPO Plan (UPDATED)

The U.S. initial public offerings (IPO) market is experiencing a significant surge with an increasing number of companies choosing to go public, as stated by New York Stock Exchange President, Lynn Martin.
What Happened: During an interview, Martin expressed her opinions in the IPO market&#8217;s surge in recent times. The NYSE Group Inc. has seen around 25 IPOs of operating companies on the NYSE this year, she revealed, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-05-13/nyse-president-sees-more-us-companies-pursuing-public-offerings">reported</a> on Monday.
"I'm incredibly optimistic given the amount of proceeds that have been raised so far in the markets,"&nbsp;she said. 
Following a slump in 2023 due to high interest rates and recession fears, the IPO market has bounced back. Two major deals, Reddit Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RDDT#NYSE">RDDT</a>) and Galderma Group AG, collectively raised approximately $3 billion in March. The total funds raised in U.S. debuts in 2024 through late last month have exceeded $13.7 billion, tripling the amount from the same period last year.
See Also: <a href="https://www.benzinga.com/news/24/05/38776670/the-disparate-treatment-of-trumps-fake-electors-is-a-serious-concern-says-legal-expert-its-so-unusua?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">The Disparate Treatment Of Trump&#8217;s Fake Electors Is A Serious Concern, Says Legal Expert: &#8216;It&#8217;s So Unusual To Have This Situation&#8217;</a>
According to Martin, more growth-oriented companies are finding a path to profitability through public markets. 
&#8220;Companies that are either profitable or have a path to profitability are getting rewarded,&#8221; she stated. 
However, she also noted that corporations are being more strategic about their public debut timings.
Based on the current trend, Martin anticipates 2024 to be a typical year for IPOs, following two years of slowdown. She also hinted at a potential IPO market closure near the U.S. presidential election, as has been customary in the past.
Why It Matters: The resurgence of IPOs in 2024 comes <a href="https://www.benzinga.com/markets/equities/24/02/37215731/ipo-revival-in-2024-plaid-chime-and-kim-kardashians-skims-among-potential-market-movers">after a couple of subdued years in 2022 and 2023,</a> when rising inflation and interest rates impacted the market, making it difficult to price IPOs and leading many companies to pull or postpone planned IPOs.
Furthermore, market advisors echo Martin&#8217;s sentiments that the November presidential elections would cause a <a href="https://www.benzinga.com/general/politics/24/04/38515952/us-presidential-election-impact-on-ipo-market-timing">brief slowdown in the IPO</a> market. However, this is not anticipated to be a major disruption to the overall momentum of public listings.
Read Next: <a href="https://www.benzinga.com/markets/cryptocurrency/24/05/38753994/cardano-founder-charles-hoskinson-says-voting-for-biden-is-a-vote-against-american-crypto-?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Cardano Founder Charles Hoskinson Says Voting For Biden Is A &#8216;Vote Against American Crypto Industry&#8217;</a>
Image: Shutterstock/ MaximP
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NYSE President 'Incredibly Optimistic' About More IPOs In 2024: Over $13.7B Raised So Far

CNBC&#8217;s Jim Cramer has expressed his support for the initial public offering of Viking Holdings Ltd (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VIK#NYSE">VIK</a>), despite its high valuation.
What Happened: Cramer, on his show &#8220;Mad Money&#8221; on Thursday, discussed the IPO of Viking, a luxury cruise line, which is the largest IPO of the year so far, <a href="https://www.cnbc.com/2024/05/02/cramer-says-hes-willing-to-pay-up-for-viking-biggest-ipo-of-the-year.html">reported</a> CNBC. 
He noted that Viking&#8217;s stock is more expensive than its peers but still believes it&#8217;s a good investment.
Viking&#8217;s IPO was priced at $24 per share and began trading at $26.15 on Wednesday, closing at $26.10. The stock further rose to $26.99 on Thursday.
"Even though Viking's somewhat hot start has made its stock more expensive than its cruise line peers, I am willing to pay up for this one, because I think it's going to be a winner," he said.
Cramer highlighted Viking&#8217;s unique selling points, such as its ships not having casinos and being adults-only, as well as its focus on affluent customers and niche destinations. He believes these factors give Viking a competitive edge.
"Viking's got a cleaner balance sheet than its peers, differentiated brand, it caters exclusively to high-end customers &#8230; part of the business I expect to hold up better than the mass market side of things," he said.
Despite Viking&#8217;s preliminary first-quarter results showing a slowdown in growth since the pandemic, Cramer remains optimistic about its future. He acknowledged that Viking&#8217;s balance sheet isn&#8217;t perfect, but he sees it as a better option compared to other publicly traded cruise lines.
See Also: <a href="https://www.benzinga.com/news/24/04/38490818/if-you-invested-1000-in-chipotle-mexican-grill-a-decade-ago-this-is-how-much-itd-be-worth-now?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">If You Invested $1000 in Chipotle Mexican Grill a Decade Ago, This is How Much It&#8217;d Be Worth Now</a>
He suggested that investors buy Viking stock at its current price, even though he would prefer it to be more in line with its peers, which he estimates to be around $20. Cramer believes Viking&#8217;s unique business model and target audience justify its premium valuation.
Why It Matters: Viking&#8217;s IPO comes at a time of optimism for the stock market. In March, Bank of America&#8217;s technical strategist, Stephen Suttmeier, predicted that the S&amp;P 500 could <a href="https://www.benzinga.com/markets/equities/24/03/37926504/stock-market-could-rally-another-34-by-2026-says-bank-of-america">surge by 34%</a> by the end of 2026, with no end in sight for the secular bull rally.
Moreover, the cruise industry has been innovating to attract new customers. For instance, Virgin Voyages recently introduced <a href="https://www.benzinga.com/news/24/04/38104334/workplace-on-waves-richard-branson-launches-remote-work-boat-with-virgin-voyages-extended-sea-workat">a month-long cruise package</a> specifically designed for remote workers, combining work and travel in an unprecedented way.
Read Next: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/04/38540161/is-bitcoin-heading-for-a-dip-ahead-of-fomc-analyst-predicts-potential-cascade-towar?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Is Bitcoin Heading For A Dip Ahead Of FOMC? Analyst Predicts Potential &#8216;Cascade Towards $55-58K&#8217; Before Rebound</a>
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Equities

Jim Cramer Backs Viking's IPO Despite Premium Price: 'I Think It's Going To Be A Winner'

Investors eager to support former President Donald Trump&#8217;s social media venture, Truth Social, may face disappointment, according to Helaine Olen, author and columnist.
What Happened: <a href="https://www.benzinga.com/markets/equities/24/03/37931071/trump-medias-stock-rockets-19-in-premarket-ahead-of-nasdaq-debut-whats-going-on">Truth Social went public today</a>, following its approved merger with the little-known publicly traded Digital World Acquisition Corp. (DWAC). The merged entity will trade under the name and stock symbol — DJT — of Trump&#8217;s media company, Trump Media &amp; Technology Group Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DJT#NASDAQ">DJT</a>).
Despite the prospect of the new company being valued at approximately $5 billion, <a href="https://www.msnbc.com/opinion/msnbc-opinion/trump-truth-social-djt-stock-price-rcna144715">MSNBC&#8217;s</a> Olen advises caution. She highlights Trump&#8217;s history of financial failures and the modest user base of Truth Social compared to its rivals.
See Also: <a href="https://www.benzinga.com/news/24/03/37903308/former-white-house-communications-director-says-wall-street-bankers-are-laughing-at-trumps-fundraisi?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Former White House Communications Director Says Wall Street Bankers Are Laughing At Trump&#8217;s Fundraising Efforts</a>
Olen points out that Truth Social&#8217;s revenue is meager, and its user base is a mere fraction of Twitter&#8217;s estimated 500 million. The public offering via a special purpose acquisition company (SPAC) also raises eyebrows due to the lack of financial transparency required compared to traditional IPOs.
Despite these warnings, Trump&#8217;s ardent supporters, who have previously turned Digital World Acquisition into a meme stock, are expected to ignore these warnings. The stock has already seen an increase of over 180% this year, although it fell nearly 6% after the merger announcement.
Going public via a special purpose acquisition company (SPAC) is not a guaranteed financial success. Many SPACs have failed, resulting in significant potential losses for investors. Despite these risks, Trump is <a href="https://www.benzinga.com/news/24/03/37903082/trump-linked-dwac-is-a-meme-stock-on-steroids-says-herb-greenberg-as-former-president-set-to-get-ric">set to gain $3 billion</a> based on Digital World Acquisition&#8217;s current stock price.
See Also: <a href="https://www.benzinga.com/news/24/03/37904554/bidens-2024-re-election-chances-increasingly-vulnerable-gallup-poll-finds-ahead-of-trump-rematch?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Biden&#8217;s 2024 Re-Election Chances &#8216;Increasingly Vulnerable,&#8217; Gallup Poll Finds, Ahead Of Trump Rematch</a>
However, there is a lockup period of six months when insiders will not be permitted to sell or borrow against shares after going public. This means that Trump&#8217;s potential gain could be much lower after the lockup period.
&#8220;His fans won't see the truth: Trump is not only a serial fraud, he is one who takes advantage of those who believe in him the most. Stock trading on the ironically named Truth Social is highly unlikely to change that sad fact,&#8221; she wrote.
Why It Matters: The merger between DWAC and Trump Media &amp; Technology Group was first announced in October 2021 and <a href="https://www.benzinga.com/m-a/24/03/37915923/trump-spac-merger-approved-set-for-imminent-public-debut-the-profits-some-investors-missed">has faced several setbacks and delays.</a>
Truth Social, founded by Trump after his Twitter ban, has significantly fewer users than its rivals, with an estimated 5 million active users compared to Twitter&#8217;s 500 million. Its revenues are also considerably lower.
Wall Street financier and prominent Republican donor, Jeff Yass, has reportedly been identified as a <a href="https://www.benzinga.com/news/24/03/37907541/trump-linked-digital-world-acquisition-counted-billionaire-wall-street-financier-jeff-yass-firm-as-l">significant shareholder in DWAC.</a>
Read Next: <a href="https://www.benzinga.com/news/24/03/37904501/donald-trumps-surprising-cash-declaration-shakes-up-new-york-fraud-case-i-currently-have-almost-500m?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Donald Trump&#8217;s Surprising Cash Declaration Shakes Up New York Fraud Case: &#8216;I Currently Have Almost $500M</a>
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DWAC

Is Donald Trump's Truth Social's Public Debut Worth The Hype? Expert Urges Caution

At the recent Benzinga Virtual Healthcare Summit, Laura Chico, Ph.D., senior vice president of equity research at Wedbush Equity Research, shared her optimistic views on the 2024 biotech IPO market and the current M&amp;A trends in the industry. 
Chico&#8217;s discussion happened against the backdrop of a fluctuating market that has seen its share of highs and lows in recent years, particularly in light of the impact of the COVID-19 pandemic on health care.
<h1 class="wp-block-heading">A Promising Year For Biotech IPOs</h1>
According to Chico, the biotech IPO scene is experiencing a notable uptick in 2024, with six IPOs already priced and performing well in the market. This marked a positive shift from previous years, when the number of IPOs significantly declined.
&#8220;So far, in 2024, we&#8217;ve had six IPOs price, and I think, relatively speaking, they&#8217;ve held up pretty well in market performance,&#8221; Chico stated.
See Also: <a href="https://www.benzinga.com/markets/equities/24/03/37878531/reddit-shares-jump-62-on-debut-investor-analyst-reaction-on-social-media">Reddit Shares Jump 62% On Debut: Investors, Analysts React On Social Media</a>
<figure class="wp-block-image size-full is-resized"><a href="https://www.benzinga.com/events/cannabis-conference/"><img loading="lazy" decoding="async" width="300" height="250" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/21134153/2231044_CCCFloridaGIF_V2_031124-28.gif" alt="" class="wp-image-261181" style="width:428px;height:auto" /></a></figure>
<h1 class="wp-block-heading">M&amp;A Landscape</h1>
Chico also highlighted the heightened activity in biotech M&amp;A, noting that the industry witnessed a higher-than-normal rate of acquisitions in recent months. This was underscored by recent high-profile acquisitions such as AstraZeneca&#8216;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AZN#NASDAQ">AZN</a>) purchase of Fusion Pharma.&nbsp;
&#8220;Even yesterday, we got the announcement that Fusion Pharma was being acquired by AstraZeneca for one and a half billion dollars,&#8221; she mentioned.&nbsp;
<h1 class="wp-block-heading">Election Year Considerations</h1>
As the U.S. heads into an election year, the biotech sector often faces uncertainty that can impact market performance. She observed that historically, biotech tends to underperform in the months leading up to a presidential election but sees a boost in the subsequent months.&nbsp;
&#8220;This has been true for almost every presidential election in the past five cycles. We&#8217;ve seen higher performance in the three months after the election,&#8221; she explained.
Chico&#8217;s discussion at the Virtual Healthcare Summit painted a cautiously optimistic picture for the biotech industry in 2024. There was an expected rise in IPOs and continued robust M&amp;A activity despite the potential headwinds of an election year.
The&nbsp;<a target="_blank" href="https://www.benzinga.com/events/cannabis-conference/" rel="noreferrer noopener">Benzinga Cannabis Capital Conference</a>&nbsp;is returning to Florida in a new venue in Hollywood on April 16 and 17, 2024. The two-day event at&nbsp;<a target="_blank" href="https://www.benzinga.com/events/cannabis-conference/" rel="noreferrer noopener">The Diplomat Beach Resort</a>&nbsp;will be a chance for entrepreneurs, both large and small, to network, learn, and grow.&nbsp;
Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars — this conference is the go-to event of the year for the cannabis world. <a href="https://www.benzinga.com/events/cannabis-conference/" target="_blank" rel="noreferrer noopener">Get your tickets now on </a><a href="http://bzcannabis.com/" target="_blank" rel="noreferrer noopener">bzcannabis.com</a><a href="https://www.benzinga.com/events/cannabis-conference/" target="_blank" rel="noreferrer noopener"> – Prices will increase very soon!</a>
Read Next: <a href="https://www.benzinga.com/general/biotech/24/03/37859130/is-eli-lilly-winning-the-war-on-weight-loss-drugs-zepbound-overtakes-wegovy-in-us-prescriptions">Is Eli Lilly Winning The War On Weight Loss Drugs? Zepbound Overtakes Wegovy In US Prescriptions</a>
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Biotech

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Events

Exclusives

Interview

EXCLUSIVE: 2024 Witnesses Increase In Biotech Initial Public Offerings

Popular social media platform, Reddit Inc., and its investors are reportedly targeting a substantial $748 million in an <a href="https://www.benzinga.com/general/social-media/24/03/37432524/reddit-targets-6-5b-valuation-in-ipo-shares-priced-at-attractive-31-34">upcoming initial public offering</a> (IPO), which could rank among the year&#39;s largest.
As <a href="https://www.bloomberg.com/news/articles/2024-03-10/reddit-s-planned-ipo-is-said-to-seek-up-to-748-million?srnd=homepage-americas&amp;sref=TBDibEcD">Bloomberg reported</a> on Thursday, Reddit plans to sell 22 million shares, each priced between $31 and $34. This move is speculated to value the company at a hefty $6.5 billion.
Approximately 1.76 million shares in the IPO will be set aside for Reddit&#39;s early users and moderators. These shares will not be subject to a lockup period, allowing owners to sell them on the opening day of trading, as per&nbsp;Reddit&#39;s filings with the U.S. Securities and Exchange Commission.
See Also:&nbsp;<a href="https://www.benzinga.com/news/24/03/37482430/from-hating-reddit-ipo-to-shorting-the-stock-a-polarizing-debate-emerges-among-redditors">From Hating Reddit IPO To Shorting The Stock: A Polarizing Debate Emerges Among Redditors</a>
&nbsp;
The journey to listing has been a long one for Reddit, initially filing back in 2021. Despite the market&#39;s ups and downs and the hurdles of the global pandemic, the company&#39;s IPO is set to make a splash on this year&#39;s list of new public offerings.
Reddit has been a significant player in the social media space since its inception in 2005. With an impressive average of 73.1 million unique visitors logging in daily during the fourth quarter, the platform&#39;s main shareholder is Advance Magazine Publishers Inc., which is a part of the Newhouse family&#39;s publishing empire that also owns Conde Nast.
Leading the IPO are notable financial institutions Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase &amp; Co., and Bank of America Corp. Reddit&#39;s shares are expected to trade on the New York Stock Exchange under the symbol RDDT.
Read Next:&nbsp;<a href="https://www.benzinga.com/news/24/03/37447086/jim-cramer-says-successful-reddit-ipo-could-spell-trouble-for-market-those-who-want-the-bull-to-cont">Jim Cramer Says Successful Reddit IPO Could Spell Trouble For Stocks: &#39;Those Who Want The Bull To Continue Must Root Against This Deal</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock

Reddit Eyes Mega IPO, Aiming To Raise $748 Million

<h4>Key Takeaways:</h4>
<ul>
<li>Premium tea chain Auntea Jenny has filed to list in Hong Kong, reporting its profit nearly tripled in the first three quarters of last year to 320 million yuan&nbsp;</li>
<li>The company uses a franchise business model, similar to many of its peers that have also filed for similar recent listings&nbsp;</li>
</ul>
By Lau Chi Hang
&ldquo;Today is cruel, tomorrow will be even crueler. The day after tomorrow is beautiful, but most people will die tomorrow night,&rdquo; once said Jack Ma, Chinese internet legend and founder of Alibaba.
While Ma may have been talking about Alibaba&rsquo;s core e-commerce business, his words could also apply to China&rsquo;s overheated premium tea market these days. And his words may not even be strong enough for a turbulent sector that has produced at least four Hong Kong IPO candidates since the start of the year alone.
Instead, a more apt modification of Ma&rsquo;s words for this frothy sector might be: &ldquo;Today is very cruel, tomorrow will be even crueler. The day after tomorrow may not be beautiful either, but that doesn&rsquo;t matter because most premium tea chains will be dead by then.&rdquo;
The past decade has seen China&rsquo;s premium tea market explode, with hundreds of thousands of stores popping up selling a wide range of products to just about anyone with money to spare in this nation of 1.4 billion. As companies tap out investors for new money to fund their expansions, many are now turning to Hong Kong&rsquo;s stock market for new money to keep growing.
Nayuki&nbsp;(2150.HK) was the lone Hong Kong-listed company from the group for several years, but Mixue Bingcheng and Guming have all recently filed to join it. Now, the folksy-named&nbsp;Auntea Jenny (Shanghai) Industrial Co. Ltd.&nbsp;has also jumped on the bandwagon, formally applying for a Hong Kong IPO earlier this month.
A good story is a must for the crowded field of premium tea chains. Nayuki&rsquo;s started with a blind date, while Auntea Jenny is the business child of Shan Weijun and Zhou Rongrong, a former pair of big company middle and senior managers. After moving to Shanghai from Shandong province in 2011, they one day noticed people crowded in a small store to buy milk tea with red glutinous rice. In that single bright flash, they realized that this business could become something big.
Shan went on to visit Taiwan to study its thriving milk tea industry. He found it had 20,000 tea stores in a place with only 23 million people, and realized that meant the Mainland could probably support millions of such shops. Not long afterwards in 2013 he opened his first Auntea Jenny, a brand originally known for its signature grainy-textured milk tea. He later expanded by adding fresh fruit teas to the menu in 2019.
As of the third quarter of last year, the company had 7,297 stores covering more than 300 cities across China, according to&nbsp;<a href="https://www1.hkexnews.hk/app/sehk/2024/106243/documents/sehk24021400100.pdf">its prospectus</a>filed earlier this month. Nearly all of those &ndash; 99.3% to be exact &ndash; are franchised, meaning its revenues mostly come from the sale of goods and provision of services to its franchisees.
The company&rsquo;s revenue rose from 1.64 billion yuan ($228 million) in 2021 to 2.2 billion yuan in 2022, with profits of 83.4 million yuan and 150 million yuan in those two years, respectively. Revenue for the first three quarters of last year rose 54% year-on-year to 2.54 billion yuan, while its profit nearly tripled to 324 million yuan. Its gross margin of 31.2% is similar to Mixue Bingcheng&rsquo;s 30% and GoodMe&rsquo;s 31%, showing how difficult it is to differentiate these companies.
<h4>No clear advantage</h4>
Auntea Jenny made a name for itself across China in just 10 years, but so have many others. In addition to Mixue Bingcheng and GoodMe, others lining up to list include Modern China Tea, Chagee, Chabaidao, Shuyi Shaoxiancao, Xinshiqi and Chabaidao, which&nbsp;<a href="https://thebambooworks.com/chabaidao-joins-hong-kong-ipo-tea-party/">filed a new prospectus</a>&nbsp;just last week. In such a crowd, how can Auntea Jenny swim to the top in an ocean of tea?
In its listing application, the company emphasizes its large network in China&rsquo;s smaller cities, its deep understanding of consumers and its ability to provide high-quality and diversified products. It also spouts about its comprehensive franchisee platform and win-win franchising model, strong supply chain management capabilities, integrated membership rewards program, and experienced senior management team.
But none of these selling points really differentiate it from its peers. In fact, Auntea Jenny is far smaller than Mixue Bingcheng in terms of business size, and inferior to the more premium quality of higher-end brands like HeyTea and Nayuki. There&rsquo;s no shortage of rivals in the middle of the market where the company currently floats.
<h4>Complaint leader</h4>
The franchise model that Auntea Jenny claims as one of its strong selling points is also nothing special among its peers. The only question is who is doing best in managing their vast franchisee networks. In that regard, Auntea Jenny only seems to lead its rivals in the number of customer complaints it gets, which often reflects poor management of franchisees.
On the Heimao complaint platform of the popular Sina web portal, Auntea Jenny has accumulated 2,200 complaints as of February this year. While that&rsquo;s far less than the 6,000-plus complaints for Mixue Bingcheng, we should also note that Mixue Bingcheng has 36,000 outlets, roughly five times those of Auntea Jenny. And Auntea Jenny leads Chabaidao&rsquo;s 1,300 complaints and GoodMe&rsquo;s 1,200.
Some complaints even snowballed into scandals, including one last year where the company was blasted for allegedly backtracking on its promise to distribute free coupons. Such scandals reflect management problems on the one hand, and also insufficient supervision, guidance and training for franchisees in recent years as it races to open more stores.
<h4>Lower popularity</h4>
Auntea Jenny also seems to lag behind some of its peers in terms of brand awareness. A recent report on the market from iMedia Research show that Auntea Jenny only ranked ninth among consumers&rsquo; 10 favorite brands of new-style teas, with only a 15.3% favorable rating.
Auntea Jenny is also losing ground in products. The niche-product nature of its signature grainy-textured milk tea led the company to try to reach a bigger audience with its addition of more mainstream fresh fruit tea products five years ago. But it was quite late to that game, having to compete with more established products like HeyTea&rsquo;s &ldquo;succulent grapes&rdquo; and Nayuki&rsquo;s &ldquo;domineering series.&rdquo;&nbsp;
Overall, we have yet to see any qualities that make Auntea Jenny a standout in this homogenized market, which will be critical for it to stay afloat and keep growing until the market finally starts to cool.
This article is from an unpaid external contributor. It does not represent Benzinga&#39;s reporting and has not been edited for content or accuracy.

Auntea Jenny Steeped By Rivals In Flood Of Bubble Tea IPOs

<h4>Key Takeaways:</h4>
<ul>
<li>Chabaidao&rsquo;s revenue grew 34.8% to 5.7 billion yuan in 2023, as the company has been consistently profitable over the last three years</li>
<li>The premium tea chain operator plans to keep growing through greater penetration in lower-tier cities, expanding overseas and by diversifying into coffee</li>
</ul>
&nbsp;&nbsp;
By Hugh Chen
Add yet another newcomer to the increasingly crowded party of premium tea makers hoping to whet investor appetites in Hong Kong with yet another rapid growth story.
This time it&rsquo;s&nbsp;Baicha Baidao Industrial Co. Ltd.,&nbsp;which filed&nbsp;<a href="https://www1.hkexnews.hk/app/sehk/2024/106264/documents/sehk24022301162.pdf">a new IPO prospectus</a>&nbsp;with the Hong Kong Stock Exchange on Friday, following its initial filing last August. The move puts Baicha Baidao into direct competition with a growing list of chains to file for Hong Kong IPOs since the start of this year, alongside&nbsp;<a href="https://thebambooworks.com/mixue-brews-up-renewed-ipo-bid-tempting-investors-with-overseas-expansion/">Mixue Group</a>,&nbsp;<a href="https://thebambooworks.com/guming-joins-chinas-tea-market-party-with-ipo-bid/">Guming</a>, and&nbsp;Auntea Jenny (Shanghai) Industrial.
Founded in 2008 and based in Southwest China&rsquo;s Sichuan province, Baicha Baidao, which operates its stores under the Chabaidao name, is one of China&rsquo;s largest tea drink chains. According to third-party data cited in its prospectus, it ranked third in the country&rsquo;s market for freshly-made tea chains in terms of retail sales with 6.8% of the industry&rsquo;s 247.3 billion yuan ($34.8 billion) in sales last year.
Chabaidao&rsquo;s position as a top-three player could certainly attract investors, though they will also be paying close attention to how the company navigates its next growth phase in the highly competitive market. Staying ahead of the competition is increasingly important, given signs that China&rsquo;s premium tea market is quickly becoming saturated, filled with dozens of chains selling products in a variety of flavors at a wide range of price points. Growing consumers caution with China&rsquo;s slowing economy is throwing a new ingredient into the mix.
Chabaidao is controlled by founder Wang Xiaokun and his wife, who hold 18.02% and 5.74% of the company&rsquo;s shares, respectively. They also jointly control Hengsheng Herui, the company&rsquo;s largest shareholder with 67.67% ownership.
After completing its latest fundraising round last June, the company attained a valuation of 17.5 billion yuan, according to financial media Caixin, meaning it could get a market cap of more than $2 billion if it completes its IPO this time. The company conducted two rounds of fundraising during the year totaling 970 million yuan.
Like many of its competitors, Chabaidao has rapidly expanded its store network by using a franchising business model, allowing it to grow rapidly by leveraging franchisee investments rather than relying solely on its own funding.
Chabaidao&rsquo;s store count reached 7,927 at the end of 2023, covering most of China in both large and smaller cities. According to a recent report from the research group Zhaimen Canyan, this count made Chabaidao the third-largest tea chain in China after Mixue and Guming, which had over 36,000 and 9,028 stores as of January, respectively.
Chabaidao&rsquo;s sales have expanded rapidly in recent years with its growing store network, including a 34.8% rise to 5.7 billion yuan last year from 4.2 billion yuan in 2022 and 3.6 billion yuan in 2021.
The company primarily targets the mid-range tea market, with most products priced between 10 yuan and 20 yuan, or the equivalent of $1.50 to $3. That segment happens to be one of the most competitive, also served by Guming, Auntea Jenny and Shuyi Shaoxiancao, among others, which have all posted similarly rapid growth using a franchised business model.
<h4>Gross margin outperformer</h4>
Franchised locations account for nearly all of Chabaidao&rsquo;s footprint, as well as those of Auntea Jenny and Shuyi Shaoxiancao &ndash; the fourth and fifth largest chains in China with 7,613 and 6,843 stores respectively, according to Zhaimen Canyan. Companies using the franchising model mainly generate revenue by selling equipment and materials for tea production to their franchisees, making cost control paramount to be competitive.
One key metric shows Chabaidao may be outperforming its rivals in that regard. Its gross profit margin consistently exceeded 34% between 2021 and 2023, ahead of Auntea Jenny at 31.2% for the first nine months of 2023, and Guming at a similar 31% over the same period.
Chabaidao has also consistently been profitable over the past few years despite pandemic-related challenges. Its net profit reached 1.1 billion yuan in 2023, while the figure for the previous two years was 756 million yuan and 954 million yuan, respectively. Guming and Auntea Jenny have also remained profitable, with Guming earning 990 million yuan and Auntea Jenny 324 million yuan for the first nine months of 2023.
With the market quickly saturating, all of the chains will feel pressure to show investors how they can continue growing while also remaining profitable.
Chabaidao detailed several such strategies in its prospectus, including boosting its penetration into China&rsquo;s smaller, underserved cities and expanding overseas. The company cited third-party data saying freshly-made tea shop sales in lower-tier Chinese cities reached 179.8 billion yuan in 2023, comprising over 70% of the total premium tea market, and is expected to grow to 408 billion yuan by 2028.
Chabaidao said it plans to bolster its presence in such smaller cities through incentives for its franchisees, such as discounted franchise fees and complimentary operations and management training courses.
On the overseas front, a major priority for Chabaidao would be Southeast Asia, where the market is expected to grow from 32.9 billion yuan in 2023 to 78.3 billion yuan in 2028, according to third-party research cited in the prospectus.
Another strategic priority for the company to maintain its growth involves expanding its product mix into the coffee segment that is also quickly becoming saturated with players like Starbucks (SBUX.US) and Lavazza at the high end, and Luckin (OTC: <a class="ticker" href="https://www.benzinga.com/stock/lkncy#OTC">LKNCY</a>) and Manner at the lower end. Last month the company launched its first self-operated coffee shop branded Coffree. Chabaidao said it plans to progressively offer freshly-made coffee products under that independent sub-brand, aiming to leverage its operational expertise to diversify beyond tea.
At the end of the day, the crowded state of the market means that execution will determine whether Chabaidao&rsquo;s strategies can succeed. After all, the company is hardly alone in pursuing growth by expanding in smaller cities, diversifying its product mix, and moving overseas.
The lower-tier markets Chabaidao is targeting are already focus areas for Guming, Auntea Jenny, Shuyi Shaoxiancao and even premium brands like&nbsp;Nayuki Holdings&nbsp;(2150.HK) and&nbsp;Heytea. All of those must also contend with entrenched leader Mixue, which targets the super low-end of the market. Southeast Asia remains a crowded priority destination as well.
And as we&rsquo;ve noted, a move into the coffee space will just take Chabaidao into another highly competitive realm. The bottom line is that China&rsquo;s separate but similar coffee and tea parties are rapidly boiling over, making consolidation almost inevitable in the crowded market. &nbsp;
This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

Asia

LKNCY

Chabaidao Joins Hong Kong IPO Tea Party

Alibaba Group Holding Ltd (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) co-founder Joe Tsai expressed optimism about the company&#8217;s future despite recent setbacks.
What Happened: Tsai acknowledged the challenges Alibaba has faced in recent times. These include internal changes, the cancellation of a cloud computing IPO, and increasing competition in the e-commerce sector, according to an <a href="https://www.cnbc.com/2024/02/26/after-doubts-about-alibabas-future-co-founder-joe-tsai-says-were-back.html">interview</a> with CNBC.
&#8220;Now with the restructuring and with the new management in place, we feel a lot more confident in placing as one of the top e-commerce players in China,&#8221; Tsai said. 
&#8220;Where we didn&#8217;t feel as confident as before, we felt the competitive pressure, but now we&#8217;re back.&#8221;
See Also: <a href="https://www.benzinga.com/markets/equities/24/02/37305196/could-a-second-trump-presidency-disrupt-the-stock-market-capital-economics-analyst-weighs-in?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Could A Second Trump Presidency Disrupt The Stock Market? Capital Economics Analyst Weighs In</a>
He also predicted that e-commerce penetration in China would surpass 40% in the next five years, up from the current 30%.
Despite the challenges, Tsai remains confident in Alibaba&#8217;s future. He and fellow co-founder Jack Ma have recently purchased over $200 million worth of Alibaba shares. Tsai also addressed the company&#8217;s plans for an IPO of its logistics business, Cainiao, stating that they are waiting for a more opportune time.
Why It Matters: The recent developments at Alibaba are significant in the context of the company&#8217;s recent challenges and changes. In January, Ma and Tsai&#8217;s increased stakes in the company coincided with a management reshuffle, <a href="https://www.benzinga.com/news/24/01/36754606/alibabas-jack-ma-and-joe-tsai-amplify-stakes-sparking-stock-surge-amid-management-shakeup">including the appointment</a> of a new acting CEO for Alibaba&#8217;s South Asian online retailer, Daraz Group.
In February, Alibaba announced a <a href="https://www.benzinga.com/markets/asia/24/02/36998776/alibaba-chairman-says-not-in-a-hurry-for-cainiao-freshippo-ipos-due-to-challenging-market-conditions">halt on the IPOs</a> of its logistics arm, Cainiao Smart Logistics, and brick-and-mortar chain Freshippo due to challenging market conditions. This decision was communicated by Tsai during an earnings call, where he cited unfavorable market conditions as the primary reason for the delay.
Amid these challenges, Alibaba has been facing increased competition, with rivals such as PDD Holdings which owns Pinduoduo and Temu <a href="https://www.benzinga.com/news/23/11/35995320/jack-ma-calls-for-alibabas-strategic-shift-lauds-rival-pdds-moves-in-an-internal-memo">temporarily surpassing Alibaba</a>&#8216;s market capitalization. The recent announcement by Tsai, however, indicates a potential turnaround for the company, with a renewed focus on e-commerce and confidence in the future.
Read Next: <a href="https://www.benzinga.com/news/24/02/37254871/how-a-chance-encounter-with-alibaba-founder-jack-ma-made-this-77-year-old-wall-street-titan-pledge-5?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">How A Chance Encounter With Alibaba Founder Jack Ma Made This 77-Year-Old Wall Street Titan Pledge $500M</a>
Alibaba Photo by zhu difeng on Shutterstock
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BABA

Alibaba Co-Founder Joe Tsai Optimistic About Future Amid Recent Challenges: 'We're Back'

Reddit&#39;s recent <a href="http://www.benzinga.com/markets/cryptocurrency/24/02/37278939/reddit-reveals-bitcoin-ethereum-investment-as-social-giant-files-for-5b-ipo">strategic move to invest</a> in Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) and Ethereum (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/eth/usd">ETH</a>) has not just made headlines but has also ignited a fiery debate across its own vast network of forums.
What Happened: Following the announcement of Reddit&#39;s investment in cryptocurrencies, the platform&#39;s subreddits are&nbsp;dissecting this decision from every conceivable angle.
Especially in light of the company&#39;s upcoming initial public offering (IPO), users remain skeptic.
&quot;This sounds like a stupid decision,&quot; one user writes in the subreddit r/Buttcoin.
In the thread titled &quot;Why is Reddit investing in crypto?,&quot;&nbsp;another one&nbsp;states:&nbsp;&quot;Diving into the volatile crypto market now seems like a gamble, especially pre-IPO. What&#39;s the strategy here?&quot;
Another discussion, under the banner &quot;This is awkward,&quot; has users pointing out the irony of Reddit&#39;s decision.
&quot;For a platform that houses critical views on crypto, to then invest in it? The irony is palpable,&quot; shared a Redditor, highlighting the platform&#39;s complex relationship with cryptocurrency.
Environmental concerns have also emerged as a hot topic.
A poignant comment from a user read, &quot;The environmental impact of mining Bitcoin is well-documented. Is Reddit now contributing to this issue?&quot;
Also Read:<a href="https://www.benzinga.com/markets/cryptocurrency/24/02/37262900/is-bitcoins-future-doomed-european-central-bank-says-yes-offers-stark-warning">&nbsp;Is Bitcoin&#39;s Future Doomed? European Central Bank Says Yes, Offers Stark Warning</a>
Why It Matters: Reddit&#39;s foray into cryptocurrency investment is not just a financial maneuver but a reflection of the broader tech industry&#39;s growing entanglement with digital currencies.
The discussions within Reddit&#39;s community underscore the diverse perspectives on cryptocurrency&#39;s role and impact, from environmental sustainability to market volatility.
These debates shed light on the broader societal and ethical considerations that companies face when diving into the crypto space.
They also highlight the power of community platforms like Reddit to amplify these critical conversations, influencing public opinion and potentially the decisions of other companies.
What&rsquo;s Next: As Reddit marches towards its IPO, the community&#39;s reaction to its cryptocurrency investment could influence not just the platform&#39;s financial strategies but also how it positions itself within the broader tech and financial ecosystems.
The ongoing discussions among Reddit users are a testament to the platform&#39;s dynamic community, capable of challenging and potentially shaping corporate decisions.
This dialogue between Reddit and its users represents a fascinating intersection of finance, technology, and community engagement, setting the stage for <a href="http://www.benzinga.com/news/24/02/37275981/reddit-sets-stage-for-major-2024-ipo-targets-march-launch-on-nyse">future interactions between tech companies</a> and their user bases.
Read Next:<a href="https://www.benzinga.com/markets/cryptocurrency/24/02/37262360/shiba-inu-killer-wif-to-go-turbo-parabolic-analyst-identifies-final-resistance-level">&nbsp;&#39;Shiba Inu Killer&#39; WIF To Go &#39;Turbo Parabolic?&#39; Analyst Identifies Final Resistance Level</a>
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