Warby Parker is going public with a Buffett among its investors – but it’s Jimmy, not Warren

jimmy buffett
Jimmy Buffett.

  • Warby Parker’s investors include a Buffett, but it’s Jimmy, not Warren.
  • The eyewear retailer disclosed the musician is a shareholder in its S-1 filing this week.
  • The two Buffetts aren’t related but call each other “Uncle Warren” and “Cousin Jimmy.”
  • See more stories on Insider’s business page.

Warby Parker is going public with a Buffett among its shareholders. But it’s Jimmy, not Warren.

The eyewear retailer – which is pursuing a direct listing after securing a private valuation of $3 billion last year – listed Jimmy Buffett as a stockholder in its S-1 filing this week. Jimmy Buffett is a musician whose hits include “Margaritaville” and “Cheeseburgers in Paradise,” while Warren Buffett is an investor and the CEO of Berkshire Hathaway.

The two Buffetts took a DNA test to check whether they shared more than a last name, but learned they weren’t related, The New York Times reported in 2018. They call each other “Uncle Warren” and “Cousin Jimmy” anyway, the newspaper said.

Both men oversee corporate empires. Berkshire owns dozens of businesses including Geico and See’s Candies, and holds multibillion-dollar stakes in Apple, Coca-Cola, and other public companies. Meanwhile, Margaritaville spans hotels, restaurants, drinks, merchandise, retirement homes, casinos, and even a Broadway musical.

Jimmy has known Warren for around 30 years, and the singer has attended Berkshire’s annual shareholder meetings many times and performed a few skits for the crowd, he told MarketWatch in 2018. Warren has also given business advice to Jimmy, and underscored to Bloomberg the value of the musician’s followers and their lifelong loyalty to him.

“Jimmy doesn’t need a revolving group of fans,” he said. “He basically just accumulates them, and he doesn’t lose them. Except when they get old and die.”

Buffett isn’t the only familiar name on Warby Parker’s shareholder list. It also features “Originals” author Adam Grant, who turned down the chance to invest when the company’s cofounders were college students, and Alexander von Furstenberg, the investment chief of Ranger Global Advisors and the son of fashion designer Diane von Furstenberg.

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China freezes more than 40 IPOs pending an investigation as regulatory screws tighten

china chinese stock market traders investors screen
  • Two Chinese stock exchanges have frozen more than 40 planned IPOs, according to Reuters.
  • The exchanges say the freeze is due to a pending investigation by China’s securities regulator.
  • The securities regulator also indicated it would pursue cooperation with the US on auditing supervision.
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Two Chinese stock exchanges have frozen more than 40 planned IPOs as an investigation by China’s securities regulator into middlemen is underway, according to a new report from Reuters.

The Shanghai and Shenzhen stock exchanges have reportedly halted over 40 combined IPOs in the last week, according to disclosures reviewed by Reuters. The companies run the gamut from gas-engine and circuit breaker manufacturers to medical tech and semiconductors.

The exchanges say the freeze is due to a pending investigation by China’s securities regulator into four accounting and law firms that assist in the IPO process.

While the IPO halt seems to have begun days ago, on Monday China’s State Council said it would escalate a crackdown on fraudulent accounting and auditing, blaming accounting firms for permitting forgery, according to another Reuters report. Likewise, over the weekend, the securities regulator said it would start demanding higher-quality IPO disclosures.

The renewed scrutiny of IPOs is just the latest front in China’s stepped-up regulatory campaign against a variety of domestic industries from tutoring to big tech.

The securities regulator also indicated it would pursue cooperation with America on auditing supervision, according to Reuters.

In March, the Securities and Exchange Commission moved to implement a new law that would force US-listed foreign firms – in this case, largely Chinese ones – to disclose their audits to American regulators or risk delisting.

Later, in July, the SEC froze Chinese listings in America as it reviewed what disclosures should be made to protect investors. Scrutiny has focused on opaque structures called variable interest entities, often used to execute US-based Chinese IPOs.

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Another SPAC deal falls apart after Topps trading cards terminates merger with sponsor

Trader NYSE
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020.

  • Mudrick Capital Acquisition and Topps Company have terminated their proposed merger.
  • The cancellation of the proposed SPAC deal comes after the MLB said it would not renew its contract with Topps.
  • The SPAC boom is beginning to deflate as deals fall apart and shares of merged companies plummet.
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Another SPAC deal has been canceled, with Mudrick Capital Acquisition and Topp Company terminating their proposed merger.

The mutual termination of the proposed merger comes after the Major League Baseball and the Major League Baseball Players Association decided to not renew their respective agreements with Topps when they come up for renewal in 2025 and 2022, respectively.

The MLB instead agreed to a new contract with Fanatics, which recently raised $325 million from investors like Jay-Z at a valuation of $18 billion.

The decision to terminate the SPAC deal came just one week before shareholders were set to vote on the proposed merger.

Shares of Mudrick Capital traded down by about 2% in Friday trades, below its $10 per share SPAC price.

This isn’t the only SPAC to have a bumpy road since it raised money from investors. Bill Ackman’s Pershing Square Tontine Holdings SPAC canceled its proposed acquisition of a stake of Universal Music Group. Now Ackman is proposing to return the cash he raised from investors as he looks at different investment vehicles for completing deals.

And even for companies that managed to complete a SPAC merger, many have seen negative returns, with one falling as much as 90% from its $10 IPO price. The decline in post-merged SPACs comes after investors get their first earnings reports as a public company, which often show mounting losses and spotty growth.

2021 will remain a record year for SPACs regardless of how the next few months play out. Year-to-date, there have been 413 SPAC deals that have raised a total $121.7 billion.

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Robinhood CEO Vlad Tenev praises ‘diamond-handed’ investors who didn’t flip their IPO stocks

Vlad Tenev, CEO and Co-Founder, Robinhood in his office on July 15, 2021 in Menlo Park, California.
Vlad Tenev.

Robinhood CEO Vlad Tenev on Thursday praised retail investors who bought and held stocks rolled out to them via the trading app’s direct access to IPOs feature.

Users have welcomed the chance to buy into upcoming IPOs, Tenev said during a call with investors after Robinhood reported second-quarter earnings on Wednesday.

“Customers that have been participating in these IPOs have been relatively diamond-handed, so to speak,” Tenev said. “They’ve been holding on to these stocks for over 30 days and haven’t been flipping them.”

Diamond-hands” is a term commonly used by Reddit’s Wall Street Bets community that means an investor is holding onto a stock or cryptocurrency, regardless of the risks or headwinds involved. Conversely, an investor with “paper hands” is one who sells easily.

The IPO Access service, launched in May, enables Robinhood users to buy shares of companies at the IPO price, before the stock starts trading on the open market. IPO shares would otherwise typically go to institutions or wealthier investors.

Tenev said the fact that users have been holding onto their IPO stocks addresses misconceptions about retail investors. Traditionally, only professionals have had access to the IPO market, partly because retail investors were expected to snap up a hot new stock and sell it for a huge profit only hours or days later.

“We do expect to deliver more IPOs that customers can have access to as it becomes clearer to companies and issuers that this is a valuable constituency and invaluable to them as well,” Tenev said.

The trading app’s second-quarter revenue more than doubled to $565 million, up from $244 million a year ago, in line with the company’s forecast of $546 million to $574 million. Cryptocurrencies accounted for 51% of all its transaction-based revenue, with dogecoin making up 62% of crypto revenue, it said.

Robinhood’s shares fell 9% to about $45.41 a share at Thursday’s market open.

Read More: Adam Gitzes earns around $190 a day from remote bitcoin mining as a side hustle. He shares 2 reasons why it’s ‘a great time’ to start – and his tips for finding success with it.

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Adidas agrees to sell Reebok for $2.5 billion to a company aiming to go public this summer

Boards with Reebok store logo are seen on a shopping center at the outlet village Belaya Dacha outside Moscow, Russia, April 23, 2016.
  • Adidas has agreed to sell Reebok for roughly $2.5 billion, a sum less than what it originally paid.
  • Reebok will be bought by Authentic Brands Group, a conglomerate that also owns Brooks Brothers and Forever 21.
  • Adidas bought Boston-based Reebok back in 2006 for $3.8 billion in an attempt to compete with Nike.
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Adidas agreed to sell struggling sneaker brand Reebok Thursday for roughly $2.5 billion (€ 2.1 billion), a sum less than what the German multinational initially paid.

Reebok will be bought by Authentic Brands Group, a retail conglomerate that has scooped up other distressed brands such as Brooks Brothers, Aeropostale, and Forever 21.

ABG, a family business, is planning for its public debut that could happen as soon as this summer, regulatory filings show.

The closing of the transaction is expected to occur in the first quarter of 2022, according to Adidas. The company said it intends to share the majority of the cash proceeds with its shareholders.

Adidas first floated its intent to divest Reebok in February 2020 after a review of the brand. Around March, Adidas said it had developed a new five-year strategy that involves “further strengthening the leading position of the Adidas brand in the global sporting goods market.”

Adidas bought Boston-based Reebok back in 2006 for $3.8 billion in an attempt to compete with Nike.

But despite recent attempts of Reebok to position itself as a go-to brand for athletic individuals by partnering with UFC and Crossfit, its sales have not been able to keep up.

“With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success,” Kasper Rorsted, CEO of Adidas AG, said in a statement.

Adidas said the sale of Reebok will have no impact on its financial outlook for 2021.

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Robinhood drops 12% in volatile public-trading debut after IPO valuing it at $32 billion

Vlad Tenev, CEO and Co-Founder, Robinhood in his office on July 15, 2021 in Menlo Park, California.
Vlad Tenev, CEO and co-founder, Robinhood.

  • Robinhood whipsawed in its trading debut on Thursday, with shares initially jumping 6% before falling as much as 12%.
  • The online trading app was valued at $32 billion when it priced its IPO at $38 per share on Wednesday.
  • Robinhood raised $2.1 billion from its IPO and allocated a portion of shares to its user base.
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Online trading app Robinhood whipsawed in its post-IPO debut on Thursday, with shares climbing 6% before falling as much as 12%. Shares hit a high of $40.22 before falling to a low of $33.60.

The company priced its IPO late Wednesday night at $38 per share, representing the bottom end of its targeted range of $38 to $42 per share. The IPO raised $2.1 billion for the company and gave it a valuation of $32 billion.

Robinhood last raised $3.4 billion earlier this year, with shares trading on private secondary markets at a valuation around $40 billion. The company raised the money amid a surge in retail trading in meme-stocks like GameStop and AMC Entertainment.

The company has seen explosive growth amid the COVID-19 pandemic and government stimulus checks, with millions of Americans becoming first time investors in the stock market. Robinhood has more than 18 million accounts and 17.7 million active monthly users.

While the brokerage firm is not yet profitable, the company saw revenue grow 245% to nearly $1 billion in 2020. That revenue growth accelerated in the first quarter of 2021, surging 309% to $522 million, according to its S-1 filed with the SEC last month.

Much of that growth is coming from options and crypto trading, two highly speculative areas of markets than often lead to either big losses or massive fortunes.

Unique to Robinhood’s IPO is the company’s decision to allocate up to 35% of its IPO shares to users of its app. Retail investors are often restricted from investing in IPOs at the pricing afforded to institutional investors.

While Robinhood’s IPO represents a big milestone for the company, there is still a long way to go before co-founders Vlad Tenev and Baiju Bhatt can cash in on their hefty compensation awards. Both founders will be awarded $1.4 billion if Robinhood’s stock price reaches $101.50 by 2025.

Robinhood trades on the Nasdaq under the symbol “HOOD.”

Read more: Top 16 meme stocks this week on Reddit: Tesla tops the charts after record earnings while Chinese stocks get smacked amid brutal regulatory crackdown

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Robinhood prices IPO at $38 per share, valuing the online brokerage app at $32 billion

Robinhood on cellphone
  • Robinhood priced its IPO at $38 per share on Wednesday, valuing the company at about $32 billion.
  • The online brokerage app revealed surging growth in its S-1 filing amid the COVID-19 pandemic and government stimulus checks.
  • Robinhood is set to trade on the Nasdaq under the symbol “HOOD” on Thursday.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Robinhood priced its IPO at $38 on Wednesday, valuing the online brokerage app popular with retail investors at roughly $32 billion. The Wall Street Journal first reported the pricing.

Robinhood’s IPO pricing came it at the bottom end of the price range it had initially been targeting during its roadshow of $38 to $42 per share. Robinhood last raised $3.4 billion earlier this year, with shares trading on private secondary markets at a valuation around $40 billion.

The company has seen explosive growth amid the COVID-19 pandemic and government stimulus checks, with millions of Americans becoming first time investors in the stock market. Robinhood has more than 18 million accounts and 17.7 million active monthly users.

While the brokerage firm is not yet profitable, the company saw revenue grow 245% to nearly $1 billion in 2020. That revenue growth accelerated in the first quarter of 2021, surging 309% to $522 million, according to its S-1 filed with the SEC last month.

Much of that growth is coming from options and crypto trading, two highly speculative areas of markets than often lead to either big losses or massive fortunes.

Unique to Robinhood’s IPO is the company’s decision to allocate up to 35% of its IPO shares to users of its app. Retail investors are often restricted from investing in IPOs at the pricing afforded to institutional investors.

While Robinhood’s IPO represents a big milestone for the company, there is still a long way to go before co-founders Vlad Tenev and Baiju Bhatt can cash in on their hefty compensation awards. Both founders will be awarded $1.4 billion if Robinhood’s stock price reaches $101.50 by 2025.

Robinhood is set to trade on the Nasdaq under the symbol “HOOD” beginning on Thursday.

Read more: Top 16 meme stocks this week on Reddit: Tesla tops the charts after record earnings while Chinese stocks get smacked amid brutal regulatory crackdown

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Robinhood CEO says the company is all-in on crypto and that users can expect new crypto features at ‘some point’

Baiju Bhatt_Vlad Tenev_Co Founders and Co CEOs
Baiju Bhatt and Vlad Tenev cofounders and CEOs of Robinhood

  • Robinhood CEO Vlad Tenev says the company is focused on expanding its crypto offerings.
  • He said users can expect a crypto wallet at “some point.”
  • It’s a glimpse at the company’s future ahead of it’s highly anticipated IPO.
  • See more stories on Insider’s business page.

Robinhood CEO Vlad Tenev announced Saturday that crypto is a lynchpin of the retail investment app’s future, and a wallet could be in the works.

“We’ve been doing a lot of work behind the scenes to provide our crypto customers with the functionality that they’ve been asking for,” he said. “We know you want wallets.”

Users can expect a beta release of new crypto features at “some point,” he said, but did not provide any further timeline. It’s a more tentative proclamation than he’s previously made. Back in March, Tenev promised users a crypto wallet “as fast as possible.”

Robinhood users currently can’t transfer crypto assets in and out of their account, potentially driving some customers to platforms like Coinbase. However, Tenev said that will be fixed as well.

“We want to introduce new features safely,” he said. “And there’s a lot of items we have to get right from the start.”

Tenev’s statements came during Robinhood’s public roadshow Saturday, where the company’s top executives fielded questions from the public about its upcoming IPO, planned for Thursday.

It’s been clear for awhile that Robinhood, founded in 2013, was veering into the crypto world. In the company’s S-1, it revealed that 17% of its first quarter revenue came from cryptocurrency transactions.

But the company has admitted that crypto trading might be a liability. Dogecoin made up 34% of Robinhood’s first quarter crypto-trading revenue, according to its IPO filing. If interest in the meme coin declines, the company said it could be a risk to the business.

Especially in light of the many, many headlines about the company, Robinhood’s IPO is highly anticipated. In its regulatory filing, the company said it’s aiming to raise as much as $2.3 billion, with a market valuation at $35 billion at the top range. In line with company’s mission to “democratize finance,” it will offer a third of its shares directly to customers through its app.

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Robinhood promises to fix ‘the issues’ that outraged customers when it restricted trading in meme stocks

Robinhood logo stocks investing
  • Robinhood CEO Vlad Tenev acknowledged the company angered many customers after it blocked them from trading GameStop and other red-hot stocks.
  • On Saturday, Tenev promised to learn from past mistakes and “ensure they never happen again.”
  • Saturday’s roadshow event comes just days ahead of the commission-free trading app’s hotly anticipated IPO.
  • See more stories on Insider’s business page.

Robinhood knows it angered many retail investors earlier this year when the trading app halted buying of GameStop, AMC, and other meme stocks amid an epic rally – and the company has pledged to earn back the trust of frustrated customers.

In a roadshow event Saturday ahead of its planned initial public offering, Robinhood cofounder and CEO Vlad Tenev said the company is “focusing on is making sure we fix the issues that led to customers being upset.”

The app’s growth has been “amazing,” he said, but “it has led to some real challenges.”

“We’re committed to learn from these experiences and help ensure they never happen again,” he said.

Robinhood drew customers’ ire when it halted the buying of GameStop and other meme stocks during a Reddit-fueled frenzy in January, only allowing users to sell. Outraged traders flooded the app with one-star reviews on Google, lowering its user rating. Many said they would stop using the app in protest, and Redditors on the investing thread Wall Street Bets called for legal action.

Despite the blowback and ensuing regulatory scrutiny, Robinhood, which was launched in 2013 with the mission to “democratize finance for all,” saw a huge jump in new users in the first quarter, according to its S-1 filing. Monthly active users jumped by 6 million in the first three months of 2021 to 17.7 million from 11.7 million at the end of December, an increase of 51%.

The company on Saturday also outlined its plans to continue to grow revenue if US regulators ban payment for order flow, at the heart of its business model. Payment for order flow, or PFOF, is the practice of a brokerage receiving payment from a market maker to send customers’ shares to it. PFOF has drawn criticism from investor advocates who say it encourages brokerages to maximize their revenue at the expense of customers.

The company’s chief financial officer, Jason Warnick, defended PFOF as “a better deal for our customers versus the old commission structure.”

“That said, as we continue to add products and features to our platform we anticipate we will expand the sources of revenues we generate for the company,” he added.

Robinhood said it plans to expand its securities lending business, invest more into Robinhood Gold, its subscription service, and expand internationally. It also said it’s all-in on crypto.

Robinhood’s IPO, planned for Thursday, is among the most highly anticipated of the year. The company will be offering a third of its shares directly to customers through its app, a far greater amount than is usually offered to individual investors during most IPOs. Its livestreamed roadshow was also unique — open to retail investors in what is an event usually reserved for institutional investors.

The Menlo Park, California-based firm in its regulatory filing said it is aiming to raise as much as $2.3 billion in its IPO. It is offering 55 million shares priced at $38-$42, putting its market valuation at $35 billion at the top range.

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Didi has fallen a stunning 52% since its US IPO as China’s crackdown pummels the ride-hail giant

FILE PHOTO: The logo of Didi Chuxing is seen at a Didi station in Beijing, China January 2, 2019. REUTERS/Jason Lee
FILE PHOTO: The logo of Didi Chuxing is seen at a Didi station in Beijing

  • Didi is vying for China’s worst US IPO this year as its stock has lost more than half its value.
  • Not long ago, Didi was eyeing a $70 billion valuation. Less than a month from its debut, it is now worth less than $40 billion.
  • Didi has been spared the title of worst IPO this year by RLX Technology, a vaping company that has fallen 78%.
  • See more stories on Insider’s business page.

Didi is vying for China’s worst US IPO this year as the besieged ride hailing company’s stock has lost more than half its value.

Compared to the market open price on the day of its IPO, Didi has crashed as much as 52.1% on Friday. The company’s IPO listing price was $14, but the stock opened at $16.65 on its first day of trading. It now sits around $8, having fallen 31% this week alone.

Not long ago, Didi was eyeing a $70 billion valuation. Less than a month from its debut, it is now worth less than $40 billion.

That was the second-worst US listing for a Chinese company so far this year, of which there have been 37, according to Bloomberg. Didi edged out Full Truck Alliance, the so-called Uber for trucks that went public a week before Didi, which has lost 50.5% since its market open.

Both companies have been casualties of China’s rapidly enveloping cybersecurity probe. They have been barred from registering new users as the cyber ministry digs into alleged data-privacy risks for Chinese users.

Still, Didi has been spared the title of worst IPO this year by RLX Technology, a vaping company that has been buffeted by planned regulations to rein in China’s exploding e-cigarette usage. RLX has collapsed nearly 78% and is trading at less than $5 after debuting at $22 in February and peaking at $30.

Didi was trading at $8.04 as of 1:54 p.m. ET, down 21.2% so far on Friday.

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