Unicorn IPOs | Flow Traders Investment Competition | Week 24

It has been another exciting week for global financial markets as investors continue to closely follow the recent string of Unicorn tech IPOs amid political controversies in the U.S. Major markets were closed for Easter Friday, but still managed to post modest gains. Stateside, the S&P500 and Dow Jones Industrial Average indexes etched another +0.15% and +0.81% for the week. Meanwhile, the Eurostoxx 50 index of the largest European companies rose +1.46% and the Dutch AEX index closed +1.20% higher on Thursday. Overall, global markets rose +0.64% as measured by the highly diversified FTSE Global All-Cap Index fund.

On Wall Street, much attention has been drawn to the IPOs of Pinterest and Zoom as investors remain optimistic despite Lyft’s post-IPO slide of more than 20% since going public last month. Clearly these new issues are believed to be different than that of the ride-hailing platform as both are likely to go public above their expected price range. On Wednesday, Pinterest reportedly priced its shares at $19 which would value the company at $12.6 billion. Although the image sharing application is yet to turn a profit, some investors are disappointed as its shares were once priced higher during a private issuing. As for Zoom, the video-conferencing start-up is expected to achieve a valuation of $10.5 billion –almost ten times its previous (private) valuation in early 2017. Of course, no weekly news update would be complete without mentioning President Trump. This week, Democrat-controlled Congress issued a subpoena to Deutsche Bank as part of their investigations into Trump’s business dealings and suspicions of foreign influences. Meanwhile, Apple began the lengthy process of suing U.S. chip producer Qualcomm for supposedly overcharging royalties on its chips used in iPhones.

In Europe, meanwhile, thousands watched with horror as the Notre Dame cathedral in Paris became engulfed in flames. The fire broke out on Monday and has caused considerable damage to the 850-year iconic structure, triggering responses from across the globe. French President Macron has dismissed suspicions of arson and announced that he aims to have it rebuilt within five years. Many French as well as foreign individuals and organizations are donating to help finance the rebuilding of the cathedral.  Three of France’s richest families have pledged a combined $700 million to the cause and oil company Total announced it would contribute a further €100 million. In other European news, the German government has gone against the advice of the U.S. and contracted Huawei to help build its 5G network. The U.S. Justice Department accused the Chinese telecoms giant of intellectual property theft and fraud, while suspecting it of spying through its devices on behalf of the Chinese government.

In other news, on Easter Sunday there were a series of bombings in Sri Lanka which are reported to have claimed the lives of more than 200 people and injuring 450 (as of this writing). The blasts took place in three churches and three luxury hotels and are believed to be committed by religious extremists, according to the government. In response, a nation-wide curfew has been introduced and social media has been blocked temporarily.

It was another eventful week for our investment groups with Omega snatching second place thanks to their investments in Flow Traders and Emmerson. Meanwhile, Negotium Novum is the riser of the week –soaring five places with their position in Microsoft and a China ETF. MBA Investors also had a good past couple of days, generating a solid return from their risky Amazon turbo long position and shares in Sylvania Platinum (which shot up 10% last Thursday). Not all groups had an equally fruitful week, however. Borsa Valori lost five places from their position in PayPal while Fides Investments lost on their India ETF (it also closed its position in Dutch-Belgian pharmaceutical company Galapagos). But don’t forget there are still quite some weeks left until the end of the competition, so anything can happen!

Written by Jasper Thouin