Doughnuts on a production line inside a Krispy Kreme Doughnuts store in Times Square in Manhattan.
Angus Mordant/Bloomberg
Krispy Kreme
is leading a group of six companies to the public markets on Thursday.
Besides the doughnut chain,
Acumen Pharmaceuticals,
D-MARKET Electronic Services & Trading,
Evercommerce,
Torrid Holdings,
and the
Glimpse Group
opened for trading.
So far this week, 17 companies, including the current six, have listed their shares. There are no initial public offerings on tap for Friday because of the holiday weekend. On Wednesday, 10 companies went public, with
Didi Global,
the Uber of China, trading flat and closing at $14.14, 14 cents above its offering price.
On Thursday, Acumen Pharmaceuticals (ticker: ABOS) was one of the first to begin trading. The stock opened at $25.07, hit a high of $26.98, and recently changed hands in afternoon trading at $20.98, up 31% from the offering price.
The solid performance came after Acumen increased the size of its deal by nearly 20%. The biotech company, which is developing therapies to treat Alzheimer’s disease, collected about $160 million. It sold roughly 10 million shares at $16, the top of its $14-to-$16 range.
The Glimpse Group (VRAR), which develops and commercializes virtual and augmented reality software products, also opened. Shares kicked off at $11.75, peaked at $16.44, and recently traded at $12.95, up nearly 85%. Glimpse delivered Thursday’s smallest deal. The company collected $12.3 million, after selling 1.75 million shares at $7, the midpoint of its $6-to-$8 price range.
Torrid Holdings (CURV) began trading, with shares rising 15% from its offering price to $24.18 in afternoon trading. The plus-size, direct-to-consumer women’s retailer increased the size of its deal twice. It filed to offer 8 million shares at $18 to $21, which it boosted Wednesday to 10 million. It ended up selling 11 million shares at $21, the top of its expected range, raising $231 million. Sycamore Partners, the retail-focused private-equity firm, will own nearly 76% of Torrid after the IPO.
Krispy Kreme (DNUT), the most well-known of Thursday’s group, kicked off at $16.30, peaked at $20.17 and recently changed hands at $19.57, up 15% from the offer price. The doughnut chain increased the size of its deal by 10% but priced well below its expected range to raise $500 million. Krispy Kreme had planned to offer 26.7 million shares at $21 to $24 each, but ended up selling 29.4 million shares at $17 each. JAB Holding, the European investment firm, will own about 39% of Krispy Kreme after the IPO
D-Market Electronic Services & Trading, or Hepsiburada (HEPS), jumped 8% from its offer price and is trading at $13. Hepsiburada, which means “you can find anything you want here” in Turkish, is a leading e-commerce platform from Istanbul. The company raised $680 million after selling 56,740,000 American depositary shares at $12 each, the midpoint of its $11-to-$13 price range. Each ADS represents one class B ordinary share.
Lastly, Evercommerce (EVCM) also began trading. The stock opened at $20, hit a high of $21 and recently changed hands at $17.46, up nearly 3% from the offer price. Evercommerce’s IPO came in at $325 million after selling 19.1 million shares at $17, the middle of its $16-to-$18 range. The company provides SaaS software for small and midsize service businesses.
Fertitta Entertainment Inc, owned by billionaire Tilman Fertitta, said on Wednesday it has expanded its agreement to go public with blank-check company FAST Acquisition Corp to include a few hospitality and restaurant entities.
Steakhouse chain Vic and Anthony’s, restaurant chains Catch and Mastro’s, hospitality group Pleasure Pier, and a handful of smaller restaurant concepts will be added to the merger deal, the company said.
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“According to the amendment, the company has agreed to contribute certain operating businesses not originally included as part of the business combination with FAST for no additional debt,” the company said in a statement.
The expanded deal implies an enterprise value of $8.6 billion for restaurant and gaming company Golden Nugget and restaurant-chain operator Landry’s, its parent Fertitta Entertainment said. The agreement announced in February had valued the combined entity at $6.6 billion.
SPAC INSIDERS CAN MAKE MILLIONS EVEN WHEN THE COMPANY THEY TAKE PUBLIC STRUGGLES
Fertitta, who also owns basketball team Houston Rockets, will be the chairman, president and chief executive officer of the merged entity. He will own about 72% stake.
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The company also said it expects pro forma net revenue for the quarter ended June 30 to be between $917 million and $920 million, and pro forma adjusted EBITDA estimated between $270 million and $275 million.
(Reporting by Aakriti Bhalla in Bengaluru; editing by Uttaresh.V)
WASHINGTON—Robinhood Financial LLC has agreed to pay nearly $70 million to resolve sweeping regulatory allegations that the brokerage misled customers, approved ineligible traders for risky strategies and didn’t supervise technology that failed and locked millions out of trading.
The enforcement action is a blow to the fast-growing online brokerage, which was launched in 2014 and has won over users with commission-free trades and its sleek mobile app. The company took on millions of new customers and attracted more scrutiny this year as many investors accessed Robinhood to speculate on so-called meme stocks such as GameStop Corp. and AMC Entertainment Holdings Inc. Its forthcoming initial public offering is one of the most anticipated of the year.
Robinhood’s growth has continued, with its biggest source of revenue, stemming from customer trading, more than tripling in the first quarter, even as many customers complained about its technology snafus and limited customer service. It enraged clients earlier this year when it restricted trading in some popular stocks that had become so volatile that Robinhood’s clearinghouse told the brokerage to post billions of dollars in additional collateral.
The Financial Industry Regulatory Authority, the front-line inspector of broker-dealers, unveiled the settlement Wednesday. Robinhood neither admitted nor denied the claims.
Hilton Worldwide Holdings Inc. Chief Executive Chris Nassetta worked from home in Arlington, Va., with his wife, six daughters and two dogs for two weeks before returning to the hotel chain’s nearly empty headquarters for the rest of the past year. Sharmistha Dubey has been leading Match Group Inc. from her dining room table near Dallas. Herman Miller ’s Andi Owen has her dog Finn to keep her company while working from her home office in Grand Rapids, Mich. Moderna Inc. CEO Stéphane Bancel relishes twice-daily 30-minute walks between his home in Boston and the vaccine maker’s Cambridge offices, where he resumed working in August, so he can crystallize his priorities and reflect on the day. The Wall Street Journal photographed them and 11 other business leaders in their pandemic office spaces as they discussed the past year and what’s to come.
More than a year after the coronavirus upended the way we work, the business leaders said they have found that more communication, flexibility and transparency have been crucial in staying connected to their employees.
Heads of companies across sectors including finance, hospitality and technology spoke from their current workspaces about what they’ve learned from the largely remote year, what challenges they faced and what changes they plan to leave in place during the next phase of work.
Brad Karp, chairman of the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, predicted his schedule will remain less hectic after the pandemic is over: “Personally, I can’t see myself reflexively flying cross-country for an hour-long presentation or meeting.”
Big U.S. companies are discovering that “hybrid” work comes with plenty of complications.
As employers firm up plans to bring white-collar workers back into offices while still allowing them to do some work at home, many are encountering obstacles. Companies are grappling with what new schedules employees should follow, where people should sit in redesigned offices and how best to prevent employees at home from feeling left out of impromptu office discussions or being passed over for opportunities, say chief executives, board directors and others.
The insurer
Prudential Financial Inc.,
PRU -0.08%
which expects most of its roughly 42,000 employees to work in the office half the time starting after Labor Day, wants to make certain not all staffers choose to stay home Mondays and Fridays and then work in the office midweek. At the travel company
Expedia Group Inc.,
EXPE -2.41%
executives are trying to figure out how to have in-person meetings that don’t disadvantage those who aren’t in the room. Other employers, including the software company
Twilio Inc.,
predict that the new era of work could lead to shuffling between teams, with staffers gravitating to bosses who embrace their preferred styles of working.
Hybrid work “is going to redefine expectations, rules, permissions,” says Kevin McCarty, chief executive officer of the Chicago-based consulting firm West Monroe, which employs 1,360 people, and is rethinking when its employees should work at home or come into its offices.
The new style of work is bound to be another transition for workers who a year ago had to adjust to life at home. Though executives say it would be easier to manage if every employee returned to an office, or all stayed remote, surveys have repeatedly shown that most workers want a mixed approach as more adults are vaccinated. In a February survey of 1,000 companies commissioned by LaSalle Network, a national staffing and recruiting firm, the majority of companies said they would adopt a hybrid model.
Companies have also polled their organizations to find out how employees feel. At
Prudential,
PRU -0.08%
most employees indicated that they enjoyed working remotely but missed the planning, ideation and collaboration that takes place in person, says
Rob Falzon,
vice chair of the company.
Prudential has been redesigning its office space floor by floor and repurposing most of it for meeting rooms, collaboration and open space so people will be more likely to interact. Mr. Falzon says he insisted on adding video capacity in more small meeting spaces, not just conference rooms, so people working from home won’t feel excluded.
Like many employers, the company is reducing its physical footprint so there won’t be available desks for people who want to go to the office more frequently, with exceptions for some employees including traders. “We don’t have a desk for you every day,” Mr. Falzon says. “We have a desk for you three days a week.”
Hybrid models range by company. The technology company
Adobe Inc.
plans to allow employees to work from home up to two to three days a week, with staffers able to make reservations for office desks, says
Gloria Chen,
the company’s chief people officer. Other companies are hesitant to put out a specific number on days allowed at home. Factors including the length of a commute, type of job and an employee’s seniority could determine how often an employee needs to visit an office, executives say.
“We won’t prescribe” from a company level, says
David Henshall,
CEO at the technology company
Citrix Systems Inc.
“Based on the type of role you have, you’ll find that right balance.”
Prominent tech companies are embracing remote work in the midst of an exodus of skilled labor from Silicon Valley. WSJ looks at what that could mean for innovation and productivity and what companies are doing to manage the impact.
With flexibility can come challenges. If a team comes together in-person, but not all can make it, that potentially creates a subpar experience for those not in the room, says Expedia CEO
Peter Kern.
The travel company opened the first phases of an expansive campus—complete with Wi-Fi-equipped rocks —on the shores of Seattle’s Elliott Bay before the pandemic, and plans to initially permit spaced group team meetings at its headquarters.
Mr. Kern, though, says he has questions about whether those on Zoom will get the same level of learning, encouragement and career growth as those in the room. Then there are the scheduling issues.
Managers may need to “set up group meetings according to some crazy algorithm of: Who’s available when? Who’s got a flexible day, when?” Mr. Kern says. “There’s a lot of friction in all of that. It’s a lot easier to say, ‘Everybody go to work.’ Now someone calls a meeting, and you’re all there.”
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A new way of working will require the company to think differently about performance, Mr. Kern says. Managers must be careful not to have biased judgments against those who may spend less time in the office, requiring the company to be “really thoughtful about how we assess people and give people opportunity so that we don’t end up with skewed outcomes.”
Training and onboarding might be more challenging in a hybrid environment, especially if new employees have a harder time grasping the company’s culture without regular, in-person interaction with colleagues, says Tom Gimbel, CEO of LaSalle Network. With younger employees, “for them to learn anything, they need to be around the more experienced people,” he says.
Other companies have said they would allow for remote work in limited circumstances. In a memo, executives at the
New York Times Co.
said the company planned to reopen its main offices in September and didn’t intend to become fully remote. The company would “approve remote work only in places where the team and nature of the work can accommodate it.”
Some human-resources professionals say companies will have little choice but to accommodate workers’ demands, as an inflexible workplace could drive employees away as the economy rebounds, and because many workers have proven themselves adept at working anywhere.
“The employer before just could say, ‘Our culture is this,’” says
Tara Wolckenhauer,
a human-resources executive at the payroll processor
Automatic Data Processing Inc.
“Employers have to take a step back and think about it very differently.”
—Krithika Varagur contributed to this article.
Write to Emily Glazer at emily.glazer@wsj.com and Chip Cutter at chip.cutter@wsj.com
LONDON—The world’s airlines are betting on vaccinations to restart international travel.
Two of Europe’s biggest airlines, British Airways and budget carrier Ryanair Holdings PLC, have started allowing fliers to provide Covid-19 vaccination and test-result details alongside personal data, like passport numbers and visa information, during bookings. The airlines say the move will eventually help passengers show they have been inoculated when landing at destinations that have started to welcome vaccinated travelers.
Across the U.S., domestic travel is picking up amid stabilizing or falling Covid-19 cases and a relatively quick vaccination drive. That rebound isn’t yet happening with international traffic, where a patchwork of travel bans, quarantine rules and testing requirements have stymied cross-border flights.
U.S. domestic carriers have increased scheduled capacity by more than 50% between September and March, according to aviation analytics firm Cirium. Global capacity across all international routes, meanwhile, has increased just a little over 7%.
British Airways, Ryanair and other airlines dependent on international travel are hoping to boost ticket sales by capitalizing on nascent optimism over vaccinations. Their move isn’t quite the sort of vaccination passport that some governments and international agencies are exploring to help unlock pandemic-stricken economies. Countries have considered documents that would allow vaccinated residents to visit bars and restaurants, or go to the office or a sporting event.
When you’re exploring another planet, the last thing you want to have to deal with is tire damage when AAA is millions of miles away. It’s a concern that prompted NASA to develop an airless titanium tire that’s flexible like rubber, but nearly indestructible. As has been the case with many of NASA’s inventions over the years, that space age tire technology will soon be available to consumers.
Using air-filled rubber tires on a vehicle just isn’t a practical solution for exploring nearby celestial bodies whose natural terrain is covered in rocks and sharp objects. So for the handful of wheeled vehicles that NASA has sent to the moon and Mars, metal wheels are a better alternative. For the Lunar Rover, which Apollo 15 brought to the moon, wheels made of hollow metal springs were created that could absorb bumps to make the ride more comfortable for astronauts. But most metals lose their shape over time and become brittle when repeatedly flexed, resulting in misshapen wheels that don’t roll as well, and even worse, severe damage that prevents them from rolling at all.
As an alternative, NASA has spent several million dollars over the past seven years developing Nitinol: a metal alloy made of aluminum and titanium that behaves differently. Metal springs eventually lose their ability to spring back to their original shape because the bonds between their atomic structures become so stretched they’re no longer able to return to their initial arrangements. But Nitinol features a more ordered atomic structure and exhibits something known as the shape memory effect, which allows it to be deformed but return to its original manufactured shape again and again without permanent damage. It allows metal tires to be created that can deform to absorb the impact of uneven terrain like rubber, without the possibility of a flat tire occurring.
Image: The Smart Tire Company
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It’s incredible technology that will soon be available in the coming years for a vehicle that will probably never leave Earth’s atmosphere: your bike. A startup called The Smart Tire Company has announced that it’s creating a metal bicycle tire using NASA’s Nitinol alloy that never needs to be inflated, will never spring a leak, and will probably survive a lot longer than the bike itself.
Called the METL (Martensite Elasticized Tubular Loading) tire, its creators are hopeful it will be available as an alternative to premium bike tire options as early as 2022. It remains to be seen just how much a titanium alloy bike tire will cost, but you can assume that it will be a long time before kids find a bike with Nitinol wheels under the Christmas tree. For cyclists who are happy to spend tens of thousands of dollars on their bikes, however, the METL tires could be the last set they ever have to buy, although they’ll still require regular maintenance.
Image: The Smart Tire Company
The most common problem with airless tires is that they often feature open structure designs that can allow debris to get inside and throw off the balance of the wheel. Using a structure made of metal instead of rubber further complicates things because the smooth finish means the tire doesn’t have much grip. To solve this, the METL tires will also be finished with a rubber-like tread made from a material called Polyurethanium that adds grip and makes them suitable for riding on all terrains, including pavement, gravel, and dirt. Over time the tread will wear out and need to be reapplied, but that maintenance is expected to be a lot cheaper than having to regularly replace a set of tires.
The METL tires won’t suitable for every rider. They are, after all, made of metal, and are expected to be heavier than the premium lightweight tires used by professional cyclists and athletes. But for most other applications, including athletes who use larger bikes on off-road terrains, the tires won’t feel any different during a ride.
The Smart Tire Company is making a lot of promises about the advantages of its Nitinol tires over rubber ones—see this extensive FAQ on its website touting the virtues of the technology—and there’s good reason to be excited about the technology. Obviously NASA felt it was important enough to spend millions of dollars on its development. But we’ve been promised airless tires for many years now, from industry giants like Bridgestone who have the manufacturing capabilities to make them a reality. They’re still not here, though, not even for bikes, which is just about the least demanding application for the technology.
There’s little doubt that one day flat tires will be a thing of the past, but will it be thanks to this startup’s efforts? If it can deliver the METL tires in the next couple of years as it intends to, there’s good reason for Michelin, Goodyear, and Bridgestone to be concerned.
The Utah Jazz have been winning a lot this season, but not as much as their new owner.
Just look back at three days in late January. The Jazz — which Ryan Smith bought for $1.66 billion late last year — beat the Dallas Mavericks for their 10th win in a row on Jan. 27, the same evening that Qualtrics International Inc.
XM,
+2.83%,
the software company Smith co-founded with his father Scott and brother Jared in 2002, set the price for its $1.55 billion IPO. The next day, Qualtrics shares would soar 52% in their trading debut, giving the software company a market valuation of $27.3 billion; a day later, the Jazz would win their 11th straight, putting them solidly at the top of the NBA standings.
So it’s good to be Ryan Smith. At the NBA All-Star break, the Jazz have a league-best record of 27-9. At the same time, Qualtrics is a major mover in a market estimated to be worth $60 billion, and topped Wall Street estimates for earnings and sales in its first quarterly results as a publicly traded company Tuesday.
The combination of a successful basketball team and another large, publicly traded tech company are helping to secure an even loftier goal for Smith: Making the Utah region known for something more than majestic mountains and the Church of Jesus Christ of Latter-day Saints.
“His goals and objectives have never been anything but over the top,” Todd Pedersen, CEO of Vivint Smart Home Inc.
VVNT,
+0.40%,
told MarketWatch.
Qualtrics got its start in the Smith’s basement, which is near Pedersen’s home. And it’s not just Smith and Pedersen who are neighbors — their companies are right next to one another as well. And they can now watch the NBA team that Smith owns play at an arena that bears the name of Pedersen’s company, as they recently did for a nationally-televised Jazz game against the defending champion Los Angeles Lakers.
The Jazz won.
Handling double duties
Smith sits in a position occupied by few in the history of corporate America: head of a publicly traded company, and owner of an unrelated sports franchise. There is no such owner in the National Football League, Major League Baseball nor the National Hockey League, though Wayne Huizenga once owned franchises in all three while leading Blockbuster Video.
The NBA seems more willing to welcome public-company executives to its ranks, even while denying bids from Oracle Corp.’s
ORCL,
-0.10%
co-founder Larry Ellison. Another recent majority owner is Alibaba Group Holding Ltd.’s
BABA,
-1.34%
co-founder and Executive Vice Chairman Joseph Tsai, who snapped up the Brooklyn Nets for a record $2.35 billion in 2020. The reclusive Robert Pera, CEO of Ubiquiti Inc.
UI,
-0.68%,
is also owner of the Memphis Grizzlies.
Vivek Ranidive was still chief executive of Tibco Software Inc. when he led a group that bought the Sacramento Kings in 2013, and Miami Heat owner Micky Arison led Carnival Cruise Inc. for more than a decade while leading his franchise. In Pera’s first attempt to buy into the NBA, a bid for the Philadelphia 76ers, he was topped by a group that included AMC Entertainment Holdings Inc.
AMC,
+1.92%
CEO Adam Aron, who also served as CEO of the Sixers for the first two years the group owned the team.
Read more: 5 things to know as Qualtrics prepares for its IPO this week
Smith has adroitly navigated the corporate and professional sports worlds by delegating day-to-day operations at each organization.
“As executive chairman, my job during the day is running Qualtrics with [Chief Executive] Zig [Serafin]. My job with the Jazz is at night, and I leave it to the coaches, players, and executives in charge of the team,” Smith told MarketWatch. “The product is proof of their abilities.”
At Qualtrics, CEO Zig Serafin and Smith are self-described “co-builders” of a company that has grown in the four-and-a-half years since Serafin joined as chief operating officer. (Serafin, who was named CEO nine months ago, says he and Smith are “joined at the hip” in their vision.) During that time, Qualtrics has expanded employees (from 1,100 to 3,500), customers (3,000-4,000 to 13,500), and revenue (from less than $200 million annually to $763.5 million last year, the company reported Tuesday).
As the NBA’s newest owner, “One of Ryan’s leadership styles is to delegate. He lets people think big, but by doing so through smart decisions,” Jim Olson, president of the Utah Jazz, told MarketWatch.
To that end, the Jazz use Qualtrics’ data analytics technology to improve team performance on the court and off, down to traveling, sleep, and diet for players and coaching staff.
The rise of Silicon Slopes
Illustrated by Terrence Horan
Such partnerships have fueled not just the success of the Jazz and Qualtrics but the larger Salt Lake City-Provo-Orem area.
“The Jazz and Sundance [Film Festival] are the two most identifiable brands in this state, and Ryan is smartly leveraging the Jazz for global reach,” says Domo Inc.
DOMO,
+1.20%
CEO Josh James, who coined the term “Silicon Slopes” for the region and started the non-profit organization of the same name. “Ryan Smith used to be just another successful tech founder,” he said. “Now he is universally known as Ryan Smith, owner of the Jazz. This is a much larger megaphone and platform for the community.”
For example, the Jazz use Qualtrics software to collect and analyze fan data to improve their experience at home games on everything from concessions and apparel to parking and in-game entertainment. The two organizations have also teamed on 5 For The Fight, a nonprofit that invites everyone to give $5 for the fight against cancer. It is the Jazz’s official jersey patch, a rarity in the corporate-skewed NBA.
The winning ways of Smith and Qualtrics, amid a wave of freshly minted unicorns in the Salt Lake City region, underscores the rise of Silicon Slopes as one of a handful of regions in the U.S. to successfully mold itself after Silicon Valley. From the days of computer-networking pioneer Novell Inc. and word-processing maker WordPerfect Corp. in the 1980s, Utah has stood out as a tech outpost, albeit in the shadow of Silicon Valley and Seattle, but its recent string of triumphs has considerably raised its profile.
Indeed, the Provo-Orem area was deemed the best regional economy in America, according to rankings released in February by the Milken Institute.
Even COVID-19 hasn’t dampened the state’s can-do mindset.
Utah has among the most-open vaccination criteria in the nation. Starting in early March, anyone 50 and over is eligible for a jab—as well as those 16 and older with pre-existing conditions. By emphasizing “speed over perfection,” Nomi Health Inc. CEO Mark Newman says, the state has been able to send kids back to school since September, reduce the unemployment rate of 3% to a pre-pandemic level, and attain a budget surplus.
“The states that figure it out will have a long-tale of success over those states that don’t,” said Newman, whose direct healthcare company is partnering with the state of Utah and Qualtrics in bringing mass testing sites and vaccinations.
“Utah as a state has a get-it-done attitude,” says Newman, who moved to the state in 1993. “That goes back to Utah’s pioneer roots.”
James says Utah’s tech history can be divided into three phases: The first in the late 1980s and early ‘90s led by Novell and WordPerfect; a second in the late 1990s and 2000s, with internet plays Overstock Inc.
OSTK,
-2.18%,
Omniture (acquired by Adobe Systems Inc.
ADBE,
+0.69%
), Altris Corp. (bought by then-Symantec Corp.), Iomega (acquired by then-EMC Corp.), and dozens of companies that were sold for millions each; and the current one of big independent enterprise companies like Qualtrics and Domo, and consumer plays like Vivint.
“A giant crop of companies are coming behind us,” James said, mentioning such unicorns as MX Technologies Inc., Lucid Software Inc. and DivvyPay Inc. “This feels like Silicon Valley in the ‘90s. It’s a really exciting time.”
“Silicon Slopes is doing great, building off the great history of [tech pioneers] Novell and WordPerfect in the state,” Steve Case, the co-founder of AOL who now leads venture-capital firm Revolution, told MarketWatch. The latest iteration, he added, is the byproduct of the region’s focus on enterprise technology and “strong collaboration in building a community.”
Overstock CEO Jonathan Johnson credits Utah’s “rich entrepreneurial spirit” to a “business-friendly environment where constant innovation, great employment opportunities, and real technological advancement are present.”
“Utah is a mixing bowl of cultures,” says Serafin, whose previous stop was 17 years in Redmond, Wash., all of them at Microsoft Corp.
MSFT,
-0.10%.
“Utah is close to the coast, and San Francisco and Los Angeles. It’s not much different than Silicon Valley folks who moved to Nevada.”
An ‘interesting journey’
In a state increasingly bustling with unicorns, none arguably have been hotter than Qualtrics, which went public in late January.
The company’s XM tracker stands for experience management, a software category that Qualtrics coined. Qualtrics, whose software lets businesses gauge how customers use their products so those products can be improved, has about 13,000 customers from about 9,000 two years ago. The company’s sales jumped 30% in the first three quarters of 2020 to $550 million, from $413.4 million a year earlier.
Smith’s “rare and unique ability to spot markets before they exist” gave him an vision of the experience economy that has helped evolve the way enterprises think about culture, brand, products, and people,” says ServiceNow Inc.
NOW,
-1.32%
CEO Bill McDermott, who was previously CEO of SAP
SAP,
-0.10%
when it owned Qualtrics.
Read more: 5 things to know as Qualtrics prepares for its IPO this week
Smith co-founded Qualtrics with his father and brother in 2002. On the cusp of going public in 2018, Qualtrics was acquired by SAP for $8 billion, making it the largest private enterprise-software acquisition in tech history when the deal closed in early 2019.
“It’s been an interesting journey,” Smith says. “For one-and-a-half to two years with SAP, they took our name everywhere while keeping our company independent and keeping the management team together, which is rare. It retained our culture, with an option to IPO.”
“To be in this spot as a public company, so many things had to go right,” Smith said. “It’s freakin’ incredible.”
The outlook for a rebound in travel this year has dimmed after the global pandemic ravaged the industry and hurt tourism-dependent economies, with travelers postponing plans amid vaccine delays and border restrictions.
Tourist destinations from Thailand to Iceland had been hoping Covid-19 vaccines would allow countries to reopen their borders and drive a much-needed recovery in 2021. Now, with vaccine rollouts delayed in some places and new virus strains appearing, it is looking more likely that international travel could be stalled for years.
After declaring that 2020 was the worst year for tourism on record, with one billion fewer international arrivals, the United Nations World Tourism Organization says prospects for a 2021 rebound have worsened. In October, 79% of experts polled by the agency believed a 2021 rebound was possible. Only 50% said they believed that in January, and some 41% didn’t think travel would reach pre-pandemic levels until 2024 or beyond.
James Sowane, who owns a transportation company catering to tourists in Fiji, called a staff meeting earlier this month and told employees to start looking for other jobs. He recently took advantage of a government-assistance program and had brought back some laid-off workers, optimistic that vaccines could spark a travel rebound as early as April.
But now Mr. Sowane doesn’t think tourists will return until next year, and he and his wife can’t afford to keep paying wages at their company, Pacific Destinations Fiji. He is borrowing from his bank to keep a few core employees.
When America’s amusement parks and baseball stadiums no longer must serve as COVID-19 mass vaccination sites, some investors believe that households pocketing pandemic financial aid from the government might start to splurge.
While a consumer splurge could initially boost the parts of the economy devastated by the pandemic, a bigger concern for investors is that a sustained spending spree also could cause prices for goods and services to rise dramatically, dent financial asset values, and ultimately raise the cost of living for everyone.
“I don’t think inflation is dead,” said Matt Stucky, equity portfolio manager at Northwestern Mutual Wealth Management Company. “The desire by key policy makers is to have it, and it’s the strongest it’s ever been. You will see rising inflation.”
Wall Street investors and analysts have become fixated in recent weeks on the potential for the Biden Administration’s planned $1.9 trillion fiscal stimulus package that targets relief to hard-hit households to cause inflation to spiral out of control.
Economists at Oxford Economics said on Friday they expect to see the “longest inflation stretch above 2% since before the financial crisis, but it’s unlikely to sustainably breach 3%.”
Severe inflation can hurt businesses by ratcheting up costs, pinching profits and causing stock prices to fall. The value of savings and bonds also can be chipped away by high inflation over time.
Another worry among investors is that runaway inflation, which took hold in the late 1970s and pushed 30-year mortgage rates to near 18%, could force the Federal Reserve to taper its $120 billion per month bond purchase program or to raise its benchmark interest rate above the current 0% to 0.25% target sooner than expected and spook markets.
At the same time, it’s not far-fetched to argue that some financial assets already have been inflated by the Fed’s pedal-to-the-metal policy of low rates and an easy flow of credit, and might be due for some cooling off.
U.S. stocks, including the Dow Jones Industrial Average
DJIA,
+0.09%,
S&P 500 index
SPX,
+0.47%
and Nasdaq Composite
COMP,
+0.50%
closed on Friday at all-time highs, while debt-laden companies can now borrow in the corporate “junk” bond, or speculative-grade, market at record low rates of about 4%.
Read: Stock market stoked by stimulus hopes — what investors are counting on
In addition to rallying stocks and bonds, home prices in the U.S. also have gone through the roof during the pandemic, despite the U.S. still needing to recoup almost as many jobs from the COVID-19 crisis as during the worst of the global financial crisis in 2008.
This chart shows that jobs lost to the pandemic remain near to levels seen in the aftermath of that last crisis.
Job losses need to be tamed
LPL Research, Bureau of Labor Statistics
Fed Chairman Jerome Powell said Wednesday that he doesn’t expect a “large or sustained” outbreak of inflation, while also stressing that the central bank remains focused on recouping lost jobs during the pandemic, as the U.S. looks to makes serious headway in its vaccination program by late July.
Treasury Secretary Janet Yellen on Friday reiterated a call on Friday that the time for more, big fiscal stimulus is now.
“Broadly, the guide is, does it cost me more to live a year from now than a year prior,” Jeff Klingelhofer, co-head of investments at Thornburg Investment Management, said about inflation in an interview with MarketWatch.
“I think what we need to watch is wage inflation,” he said, adding that higher wages for upper income earners were mostly flat for much of the past decade. Also, many lower-wage households hardest hit by the pandemic have been left out of the past decade’s climb in financial asset prices and home values, he said.
“For the folks who haven’t taken that ride, it feels like a perpetuation of inequality that’s played out for some time,” he said, adding that the “only way to get broad inflation is with a broad overheating of the economy. We have the exact opposite. The bottom third are no where near overheating.”
Klingelhofer said it’s probably also a mistake to watch benchmark 10-year Treasury yields for signs that the economy is overheating and for inflation since, “it’s not a proxy for inflation. It’s just a proxy for how the Fed might react,” he said.
The 10-year Treasury yield
TMUBMUSD10Y,
1.209%
has climbed 28.6 basis points in the year to date to 1.199% as of Friday.
But with last year’s sharp price increases, is the U.S. housing market at least at risk of overheating?
“Not at current interest rates,” said John Beacham, the founder and CEO at Toorak Capital, which finances apartment buildings and single family rental properties, including those going through rehabilitation and construction projects.
“Over the course of the year, more people will go back to work,” Beacham said, but he added that it’s important for policy makers in Washington to provide a bridge for households through the pandemic, until spending on socializing, sporting events, concerts and more can again resemble a time before the pandemic.
“Clearly, there likely will be short-term consumption increase,” he said. “But after that it normalizes.”
The U.S. stock and bond markets will be mostly closed on Monday for the Presidents Day holiday.
On Tuesday, the only tidbit of economic data comes from the New York Federal Reserve’s Empire State manufacturing index, followed Wednesday by a slew of updates on U.S. retail sales, industrial production, home builders data and minutes from the Fed’s most recent policy meeting. Thursday and Friday bring more jobs, housing and business activity data, including existing home sales for January.