NEW YORK, Oct 10 (Reuters) – The blank-check acquisition firm that agreed to merge with former U.S. President Donald Trump’s social media company postponed on Monday its shareholder vote to Nov. 3 after failing to garner enough support to win a 12-month extension.
At least 65% of the shareholders of Digital World Acquisition Corp (DWAC.O) needed to agree to the extension. The special purpose acquisition company (SPAC) opted to push back the deadline to try to find more votes.
Digital World, which had already pushed back the deadline for its shareholders to vote on the 12-month extension several times over the past month, fell short of that threshold on Monday.
Register now for FREE unlimited access to Reuters.com
At stake is an over $1 billion private investment in public equity (PIPE) financing that Trump Media & Technology Group (TMTG) stands to receive from Digital World, which inked a go-public deal with the social media company in October 2021.
Digital World last month said it had received termination notices from PIPE investors who were pulling out about $139 million of the total financing commitment.
The transaction with TMTG has been on hold amid civil and criminal investigations into the circumstances around the deal. Digital World has not yet received approval from the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal.
Digital World is set to liquidate on Dec. 8, after managing to extend its life by three months in September.
Reuters reported last month that executives behind Digital World had failed to pay Saratoga Proxy Consulting, their proxy solicitors, for its work rallying shareholders for the vote.
Register now for FREE unlimited access to Reuters.com
Reporting by Echo Wang in New York, additional reporting by Svea Herbst-Bayliss; Editing by Will Dunham
Our Standards: The Thomson Reuters Trust Principles.
July 5 (Reuters) – The NFT dream isn’t dead, but it’s taken a big non-fungible beating.
The market shone gloriously last year as crypto-rich speculators spent billions of dollars on the risky assets, pumping up prices and profits. Now, six months into 2022, it’s looking ugly.
Monthly sales volume on the largest NFT marketplace, OpenSea, plunged to $700 million in June, down from $2.6 billion in May and a far cry from January’s peak of nearly $5 billion.
Register now for FREE unlimited access to Reuters.com
Register
By late June the average NFT sale sunk to $412, from $1,754 at the end of April, according to NonFungible.com, which tracks sales on the Ethereum and Ronin blockchains.
“The crypto bear market has definitely had an impact on the NFT space,” said Gauthier Zuppinger, co-founder of NonFungible.com.
“We have seen so much speculation, so much hype around this kind of asset,” he added. “Now we see some sort of decrease just because people realise they will not become a millionaire in two days.”
The NFT market has collapsed along with cryptocurrencies, which are typically used to pay for the assets, at a time when central banks have jacked up rates to combat inflation, and risk appetite has withered.
Bitcoin lost around 57% in the six months of the year, while ether has dropped 71% .
DIP OR DEATH SPIRAL?
For critics, the crash confirms the folly of buying such assets, tradable blockchain-based records linked to digital files such as images or videos, often artwork. read more
The Malaysian businessman who bought an NFT of Jack Dorsey’s first tweet for $2.5 million last year struggled to get bids of more than a few thousand dollars when he tried to re-sell it in April. read more
But Benoit Bosc, global head of product at crypto trading firm GSR, sees the downturn as the perfect time to build a corporate NFT collection – the crypto equivalent of the fine art traditional banks display to impress clients.
Last month, GSR spent $500,000 on NFTs from what Bosc calls “blue-chip” collections – those with large online fan bases.
His purchases include an NFT from the Bored Ape Yacht Club, a set of 10,000 cartoon monkeys made by U.S.-based company Yuga Labs and promoted by the likes of Paris Hilton and Jimmy Fallon.
Such is the hype surrounding Bored Apes that Yuga Labs raised $285 million in April by selling tokens it says can be exchanged for land in a Bored Apes-themed virtual world it has not yet launched. read more
Yet the average sale price for a Bored Ape tumbled to around $110,000 in June, having halved since its January peak of $238,000, according to market tracker CryptoSlam.
In his New York office, Bosc put up three screens on which to display his NFTs, which include various pixelated characters and a Bored Ape bought for $125,000.
“For us, it’s also a brand exercise,” Bosc said. Owning a valuable NFT and using it as a profile picture on social media is a way to establish “respectability, authority and influence” in the crypto sphere, he said.
GAME OVER? GAME ON?
Nonetheless, the future of NFTs is distinctly uncertain, as the era of low interest rates which encouraged investors to take risky bets comes to an end.
Some market watchers say the influence of NFTs on the art market will shrink. Meanwhile, even though the much-hyped vision for a blockchain-based metaverse hasn’t materialised yet, enthusiasts expect NFTs to shake up the gaming industry, for example by allowing players to own in-game assets such as avatar skins. read more
“Everyone believes games are going to be the next big thing in blockchain,” said Modesta Masoit, chief financial officer at blockchain tracker DappRadar.
This risky combination of gaming and financial speculation may face difficulties, though. Most gamers prefer games which do not include NFTs or “play-to-earn” components, according to John Egan, CEO of technology research firm L’Atelier.
Although the groundbreaking new crypto regulations agreed by the European Union last week mostly excluded NFTs, Spain is separately seeking to clamp down on the way video games sell virtual assets for real money. read more
Meanwhile, the biggest NFT-based game, Axie Infinity, has seen its in-game token collapse to less than half a cent, down from a peak of 36 cents last year.
For L’Atelier’s Egan, the NFT market is unlikely to recover in its current form.
“Ultimately it’s a situation where extraordinary amounts of money are being paid for extraordinarily limited assets that don’t really produce any cash flow,” he said.
But the underlying concept of creating unique digital assets is still “fundamentally important” and will have “massive applications” for the financial sector in future, he said.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Elizabeth Howcroft; Editing by Pravin Char
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
A bitcoin representation is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/File Photo
Register now for FREE unlimited access to Reuters.com
Register
June 7 (Reuters) – As the crypto winter creeps into June, the first signs of a thaw are emerging.
Some investors are now betting that bitcoin is bottoming out, judging by the money heading into listed cryptocurrency funds, which represent just a slice of the market yet are popular among institutional and retail players alike.
Overall flows into such funds turned positive last month, with a weekly average inflow of $66.5 million, a reversal from a dismal April when they saw a weekly average outflow of $49.6 million, according to data provider CryptoCompare.
Register now for FREE unlimited access to Reuters.com
Register
“It’s largely institutional, and to a degree retail investors, recognizing that the pain is already endured, and we’re closer to the bottom than we are to the top,” said Ben McMillan, chief investment officer of Arizona-based IDX Digital Assets.
“If you’re getting into crypto at these levels, a little near-term volatility could be worth a long-term payoff,” he added. “A lot of institutional investors are starting to look at crypto as a source of longer-term growth potential.”
It’s hard to know whether the tentative flows will last, though, or if the nascent trend will be replicated across the wider market.
Many people will also think twice before piling into the market again, having been mightily clobbered as crypto was buffeted by worries over global monetary tightening and rising inflation. Bitcoin has lost roughly half its value since a November peak, it is down by a third in 2022 and has been languishing at around $30,000 for a month.
The data from funds nonetheless indicate some investors are returning to crypto, albeit into the perceived safety of exchange-traded products (ETP) with their promise of greater liquidity and security.
The assets under management of several bitcoin-futures ETFs have risen in the past week, according to Kraken Intelligence. The assets of the ProShares Bitcoin Strategy ETF’s have grown 6%, while those of the Global X Blockchain & Bitcoin Strategy ETF (BITS.O) and VanEck Bitcoin Strategy ETF have climbed over 3%.
BY comparison, ProShares’ bitcoin fund saw outflows of over $127 million in April.
The bullish trend has extended into June, with global bitcoin ETP holdings jumping to an all-time high of 205,008 bitcoin in the first two days of the month, Norway-based crypto research firm Arcane Research found.
“This is a promising sign for what’s to come,” said Arcane analyst Vetle Lunde.
In an indication investors are being selective and cautious, only bitcoin funds have received inflows while funds focused on ethereum and other crypto still experienced outflows.
Reuters Graphics
Reuters Graphics
STILL IN THE RED
But let’s not forget, while the fortunes of some funds may potentially be turning up, most have posted poor returns this year as the crypto market has tanked.
U.S. digital assets funds have lost 46% on average so far in 2022, posting losses of 22% in May, according to Morningstar.
All listed digital asset investment products tracked by CryptoCompare lost money in May, with the worst performer being Grayscale’s Digital Large Cap Fund product, with a 38.5% fall.
“Bitcoin has been rangebound in concert with the broader market activity of late, investors are looking for a bottom and are uncertain where that is,” said Jack McDonald, CEO of PolySign, which specializes in digital asset custody solutions for institutional investors.
Shares of the Grayscale Bitcoin Trust (GBTC.PK) one of the biggest bitcoin funds with over $19 billion in assets, are trading at a 29% discount to net asset value, around its steepest discount since inception and indicative of low demand for the product.
And despite the pick up in May, many market watchers expect inflows to crypto funds to remain subdued until macroeconomic and regulatory risks become more clear.
“We’re waiting for a high conviction bid to come back into the markets,” added McMillan at IDX. “There’s still a lot of wood to chop on the macro front.”
Crypto and blockchain ETFs
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru
Editing by Vidya Ranganathan and Pravin Char
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
NEW YORK/MUNICH, May 17 (Reuters) – Germany’s Allianz SE (ALVG.DE) agreed to pay more than $6 billion and its U.S. asset management unit will plead guilty to criminal securities fraud over the collapse of its Structured Alpha funds early in the COVID-19 pandemic.
Allianz’s settlements with the U.S. Department of Justice and U.S. Securities and Exchange Commission are among the largest in corporate history, and dwarf earlier corporate settlements obtained under President Joe Biden’s administration.
Gregoire Tournant, the former chief investment officer who created and oversaw the now-defunct Structured Alpha funds, is also being indicted for fraud, conspiracy and obstruction, while two portfolio managers entered related guilty pleas.
Register now for FREE unlimited access to Reuters.com
Register
Once with more than $11 billion of assets under management, the Structured Alpha funds lost more than $7 billion as the spread of COVID-19 roiled markets in February and March 2020.
Prosecutors said Allianz Global Investors US LLC misled teacher pension funds, clergy, bus drivers, engineers and other investors by understating the funds’ risks, and displayed “significant gaps” in its monitoring of the funds. read more
Investors were told the funds employed options that included hedges to protect against market crashes, but prosecutors said the fund managers repeatedly failed to buy those hedges.
The managers also inflated fund performance to boost their own pay, collecting 30% of excess returns over relevant benchmarks as a performance fee, prosecutors said.
Tournant’s pay was the highest or second-highest in his unit from 2015 to 2019, including $13 million in 2019, court papers show.
At a news conference, U.S. Attorney Damian Williams in Manhattan said more than 100,000 investors were harmed, and that while U.S. prosecutors rarely bring criminal charges against companies it was “the right thing to do.”
Investors “were promised a relatively safe investment with strict risk controls designed to weather a sudden storm, like a massive collapse in the stock market,” he said. “Those promises were lies…. Today is the day for accountability.”
BLAME COVID, DEFENDANT’S LAWYERS SAY
Also known for its insurance operations, Allianz is among Germany’s most recognizable brands and an Olympic sponsor.
Its namesake arena near its Munich headquarters, meanwhile, houses Bayern Munich, one of world’s best-known soccer teams.
Tuesday’s settlement calls for Allianz to pay a $2.33 billion criminal fine, make $3.24 billion of restitution and forfeit $463 million, court papers show.
Williams said the fine was significantly reduced because of the compensation Allianz offered to investors.
Even so, the payout is close to twice the $3.3 billion that the Justice Department collected in corporate penalties for all of 2021.
Allianz also agreed to a $675 million civil fine to settle with the SEC, one of that regulator’s largest penalties since the implosions of Enron Corp and WorldCom Inc two decades ago.
The company previously set aside enough money to cover the settlement. While the debacle had frustrated shareholders and prompted some top Allianz managers to cut their own pay, the group’s shares closed up 1.7% in Germany after the total payout broadly matched its provisions.
Two former Structured Alpha portfolio managers, Stephen Bond-Nelson and Trevor Taylor, agreed to plead guilty to fraud and conspiracy charges and entered cooperation agreements.
Tournant, who joined Allianz in 2002 and founded the funds three years later, surrendered to authorities on Tuesday morning in Denver, and according to his lawyers will fight the charges.
“Greg Tournant has been unfairly targeted,” his lawyers Seth Levine and Daniel Alonso said in a joint statement. “We have faith that the justice system will reject this meritless and ill-considered attempt by the government to criminalize the impact of the unprecedented, COVID-induced market dislocation.”
Lawyers for Bond-Nelson and Taylor declined immediate comment.
VOYA PARTNERSHIP
Allianz’s guilty plea carries a 10-year ban on Allianz Global Investors’ providing advisory services to U.S.-registered investment funds.
As a result, Allianz agreed to move about $120 billion of investor assets to Voya Financial Inc (VOYA.N), in exchange for up to a 24% stake in Voya’s investment management unit.
Regulators said the misconduct included a situation where he and Bond-Nelson altered more than 75 risk reports before sending them to investors, to reduce projected losses in market-stress scenarios.
The SEC said projected losses in one market crash scenario were changed to 4.15% from the actual 42.15%, simply by removing the “2.”
Allianz’s alleged oversight lapses included a failure to ensure that Tournant was using his promised hedges, though only people in his group knew of the misconduct before March 2020.
“No compliance system is perfect, but the controls at AGI didn’t even stand a chance,” Williams said.
Bond-Nelson, at Tournant’s direction, also lied to Allianz’s in-house lawyers after the company learned about the altered reports and the SEC probe, prosecutors added.
“Unfortunately, we’ve seen a recent string of cases in which derivatives and complex products have harmed investors across market sectors,” SEC Chair Gary Gensler said in a statement.
Investors have also filed more than two dozen lawsuits against Allianz over the Structured Alpha funds.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Jonathan Stempel in New York and Tom Sims and Alexander Huebner in Munich; Additional reporting by Luc Cohen in New York; Editing by Chizu Nomiyama and Tomasz Janowski
Our Standards: The Thomson Reuters Trust Principles.
April 20 (Reuters) – Billionaire investor William Ackman liquidated a $1.1 billion bet on Netflix (NFLX.O) on Wednesday, locking in a loss of more than $400 million as the streaming service’s stock plunged following news that it lost subscribers for the first time in a decade.
Ackman’s hedge fund Pershing Square Capital Management made an abrupt U-turn, selling the 3.1 million shares it had bought just three months ago as Netflix’ shares tumbled 35% to $226.19.
In January, the investor funneled over $1 billion into the streaming service just days after a disappointing forecast for subscriptions pushed the share price lower. Now a second bout of negative news about subscribers – the company said it had lost 200,000 – prompted the fund manager to turn his back on a company he had showered with praise only weeks before.
Register now for FREE unlimited access to Reuters.com
Register
In a brief statement announcing the move, Ackman said proposed business model changes, including incorporating advertising and going after non-paying customers, made sense but would make the company too unpredictable in the short term.
“While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote.
Pershing Square, which now invests $21.5 billion, buys shares in only about a dozen companies at a time and needs a “high degree of predictability” in its portfolio companies, Ackman said.
Rather than wait around for things to improve at Netflix, Ackman locked in losses that are calculated to be more than $400 million, people familiar with the portfolio said. After the sale, Pershing Square’s portfolios are off roughly two percent for the year, Ackman said.
Netflix said it had lost 200,000 subscribers in its first quarter, falling well short of its modest predictions that it would add 2.5 million subscribers. Its decision in early March to suspend service in Russia after it invaded Ukraine resulted in the loss of 700,000 members. read more
Profitable hedges helped Pershing Square survive the early days of the pandemic in 2020 and then again in recent months as interest rates began to rise. The last three years have been among the best in the hedge fund’s lifetime, including a 70.2% gain in 2020.
But Ackman also acknowledged in his statement on Wednesday that he had learned from leaner times when his fund backed Valeant Pharmaceuticals, a disastrous bet that cost the hedge fund billions in losses.
“One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis. That is why we did so here,” he wrote.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Svea Herbst-Bayliss with additional reporting by Tiyashi Datta in Bengaluru; Editing by Sriraj Kalluvila, Bernard Orr
Our Standards: The Thomson Reuters Trust Principles.
NEW YORK, March 14 (Reuters) – Global investors are scooping up stakes in cryptocurrency funds and companies, as they seek exposure to a sector many believe could withstand the fallout from the Russia-Ukraine conflict.
Research firm Fundstrat, in its latest note to clients, said venture capital (VC) buyers invested around $4 billion in the crypto space in the last three weeks of February. VCs poured in another $400 million to start-ups in the sector last week, data showed.
The VC investment is consistent with broad weekly inflows. Since the beginning of the year, weekly investments in the industry have been averaging anywhere between $800 million to about $2 billion, Fundstrat data showed.
Register now for FREE unlimited access to Reuters.com
Register
New crypto funds also raised nearly $3 billion over the last two weeks as of Friday, the most so far this year.
“The conflict in Ukraine has weaponized our financial and digital economy and really accelerated blockchain adoption,” said Paul Hsu, founder and chief executive officer of Decasonic, a $50-million hybrid fund investing in both digital assets and venture capital. He added that there’s demand of up to $200 million to invest in his fund.
“We are seeing a re-allocation to crypto and blockchain away from real estate and bond funds, for instance, because of higher interest rates. I’ve seen this with my funds but unfortunately, because I’m closed-end, I cannot admit more funds nor investors,” Hsu said.
Refinitiv Lipper data showed that U.S. investors pulled a net $7.8 billion out of bond funds in the week to March 9. read more
Real estate funds saw net outflows of $707 million in the same period, after posting outflows worth $1.15 billion the previous week. read more
“Crypto native companies are still raising at very high valuations and many funding rounds are still oversubscribed,” said George Melka, chief executive officer at crypto broker SFOX. “In fact, crypto startup valuations are probably the highest I’ve seen.”
Bain Capital Ventures, a unit of private equity firm Bain Capital, for instance, announced early last week that it is launching a $560 million fund focused exclusively on crypto-related investment.
Crypto assets have outperformed traditional risk-on assets such as stocks during the crisis. Bitcoin rose 12.2% last month, while ether gained 8.8%. Since bottoming on Feb. 24 when Russia invaded Ukraine, the digital currencies have gained 14.5% and 13.5%, respectively, while the S&P 500 (.SPX) rose just 3.2%.
CAPITAL INFLOWS, HEDGE FUND RETURNS
Crypto investment products and funds saw $163 million in new institutional money in the two weeks to March 4, while inflows into blockchain equities totaled about $15.6 million, according to data from asset manager CoinShares.
The inflows of $127 million were the largest seen so far this year. Flows into the crypto sector turned positive in late January, after five straight weeks of outflows, CoinShares data showed.
Crypto fund returns have stabilized.
The BarclayHedge cryptocurrency traders index was down at 1.5% for the month of February, according to data posted on Monday, with 39 funds reporting or about 43% of the total crypto asset managers it tracks. In January the index fell nearly 13% and in December it fell 10%.
“There’s really no panic even with the Ukraine conflict,” said Joe DiPasquale, chief executive officer at BitBull Capital, which manages a crypto fund of funds and two hedge funds.
BitBull’s two hedge funds, which employ market-neutral strategies, were up on the year, DiPasquale said, benefiting from the recovery of bitcoin and ether in the month of February.
“People are starting funds, encouraged by the appreciation in prices over the last couple of years,” he said.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Gertrude Chavez-Dreyfuss; Editing by Alden Bentley and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
NEW YORK, Feb 11 (Reuters) – (This Feb. 11 story has been corrected to delete reference to consumer vehicles in second paragraph)
Billionaire investor George Soros bought nearly 20 million shares of electric truck startup Rivian Automotive Inc (RIVN.O) in the quarter ended Dec. 31, securities filings showed Friday.
The 19,835,761 shares, worth about $2 billion at the time, makes Soros Fund Management among the most prominent investors in the company. Rivian, which is 20% owned by Amazon.com Inc , is expected to provide the e-commerce company with more than 100,000 electric trucks.
Irvine, California-based Rivian said in December it expected production to fall “a few hundred vehicles short” of its 2021 target of 1,200 due to supply chain constraints, highlighting the likely challenges in ramping up production to take on EV leader Tesla Inc (TSLA.O).
Shares of Rivian fell 9% Friday and are down 43% for the year to date. The stock price is down 67% from the high of $179.46 it touched on Nov. 16, less than a week after it raised $12 billion in the largest stock debut of 2021.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by David Randall; Editing by Richard Chang
Our Standards: The Thomson Reuters Trust Principles.
Dec 10 (Reuters) – The U.S. Department of Justice has launched an expansive criminal investigation into short selling by hedge funds and research firms, according to two people familiar with the matter.
Investigators are probing firms’ trading records, public reports the firms issued on certain stocks, and the web of relationships some may have used to push stocks lower, the people said.
The Justice Department, which declined to comment on Friday, issued subpoenas to more than two dozen companies early this year and is scrutinizing trades in dozens of stocks, according to the two sources.
Register now for FREE unlimited access to reuters.com
Register
Bloomberg News firstreportedthe probe on Friday, adding that authorities are examining whether the funds engaged in insider trading or other abuses.
Anson Funds and Marcus Aurelius Value are among the firms under the scanner of the investigators, according to Bloomberg.
The companies did not immediately respond to a request for comment.
Among the stocks whose trading activity the Justice Department is examining are Luckin Coffee Inc and GSX Techedu Inc (GOTU.N), on which Carson Block’s Muddy Waters Capital and Andrew Left’s Citron Research circulated research, Bloomberg said.
In a statement, Citron Research said it “knows of no wrongdoing and has cooperated fully with the government’s investigation.”
Trading in short targets such as Santa Ana, California-based Banc of California Inc (BANC.N) and Mallinckrodt Plc (MCDG.MU) is also being examined, Bloomberg reported.
The Justice Department probe comes after the U.S. securities regulator earlier this year said it is considering measures to require big investors to disclose more about short positions, or bets that stocks will fall and the use of derivatives to bet on other stock moves.
The regulator also moved to protect small investors from trading apps that use features common to video games in order to boost risky trading activity.
The review of rules by the Securities and Exchange Commission was prompted by January’s GameStop (GME.N) saga and the meltdown of Archegos Capital.
Citron, one of the world’s best known short-sellers, in January said it would publicly stop detailing companies’ shortcomings following backlash against it and others who said retailer GameStop’s stock is not worth its price.
Register now for FREE unlimited access to reuters.com
Register
Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru and Chris Prentice in Washington; Editing by Shailesh Kuber and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
BENGALURU, July 23 (Reuters) – Shares of food delivery firm Zomato Ltd (ZOMT.NS)nearly doubled on Friday in a stellar first listing of a local unicorn in India, setting the pace for a slew of such debuts by internet-based startups that are thriving during the COVID-19 pandemic.
Berkshire Hathaway Inc-backed (BRKa.N) Paytm, hospitality company Oyo Hotels and ride-hailing firm Ola, both backed by SoftBank (9984.T), are among the Indian startups set to enter markets, riding on support from foreign funds and local investors.
Shares of Zomato soared 82.8% after opening at 116 rupees in pre-open trade, a 53% premium to the offer price of 76 rupees for the 93.75 billion rupees IPO, valuing the company at about $12 billion.
China’s Ant Group holds a 16.53% stake in Zomato, while its top shareholder is online technology company Info Edge (India), which holds a 18.55% stake.
“Today is a big day for us…we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem,” Zomato’s founder and Chief Executive Deepinder Goyal said in a blog post.
Goyal, 38, an alumnus of the Indian Institute of Technology in Delhi, launched Zomato in 2008 with fellow graduate Pankaj Chaddah. As of March 31, it operated in about 525 cities in India and has partnered with close to 390,000 restaurants.
It is the first startup to go public in India’s food delivery market, which research firm RedSeer estimated is worth $4.2 billion. It offers home delivery of food, allows customers to book tables for dining-in and collates restaurant reviews, making it a competitor to SoftBank-backed Swiggy and Amazon.com’s (AMZN.O) food delivery service.
The company’s offering last week drew bids worth $46.3 billion, making it more than 38 times oversubscribed, with big institutional investors placing major bets. read more
“Growth is key here. Zomato might not be profitable but it is growing exponentially and is enviably positioned to keep that momentum,” said Danni Hewson, a financial analyst with AJ Bell, an investment platform in England.
Zomato’s loss for the year ended March 31 narrowed to 8.13 billion rupees, while revenue from operations fell slightly year-on-year to 19.94 billion rupees.
“We are…not going to alter our course for short term profits at the cost of long term success of the company,” Goyal said.
($1 = 74.5250 Indian rupees)
Reporting by Chandini Monnappa and Anuron Kumar Mitra in Bengaluru; Editing by Arun Koyyur and Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
