—— AWS Chief to Step Down; NY to Redevelop Brooklyn Coastline; Uber Buys Taiwan Delivery Business; Fed Disappointed in Inflation Progress; GameStop Hard to Rally Like 2021; EQT-Backed Waystar to Go IPO; De Beers to Be Sold or Spun Off
1. AWS Chief to Step Down
Adam Selipsky, the head of Amazon.com Inc.’s cloud-computing division, is stepping down and will be succeeded by Matt Garman, the current top sales and marketing executive of the unit.
Selipsky, who has been leading Amazon Web Services since 2021, will leave his position next month to pursue new challenges, according to an email from Amazon CEO Andy Jassy to employees on Tuesday. Garman will take over the role on June 3.
AWS, Amazon’s cloud division, is the leading provider of rented computing power and data storage, contributing significantly to Amazon’s operating income. This division has been a major source of cash flow, enabling the parent company to invest heavily in other areas.
Last quarter, AWS reported its strongest sales growth in a year and is on track to surpass $100 billion in annual revenue for the first time.
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2. NY to Redevelop Brooklyn Coastline
New York City is set to take control of 120 acres along Brooklyn’s coastline, aiming to transform the rugged area into housing, retail spaces, green areas, and a modern, eco-friendly port.
This no-cash deal, to be announced on Tuesday, marks the city’s largest real estate transaction by physical size in at least twenty years. The redevelopment zone spans over a mile, from the southern edge of Brooklyn Bridge Park to the Red Hook neighborhood, extending in some places a block inland. Currently, most of this land is under the control of the Port Authority of New York and New Jersey.
In a related deal, New York City will transfer ownership of its 225-acre portion of the Howland Hook Marine Terminal on Staten Island to the Port Authority. This move consolidates all of Howland Hook under the Port Authority’s control and aims to facilitate future expansions of the port, which is already one of the region’s most significant container facilities.
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3. Uber Buys Taiwan Delivery Business
Uber Technologies Inc. is acquiring Delivery Hero SE’s Foodpanda business in Taiwan for $950 million, strengthening its hold on a key Asian market as it seeks to expand in the region.
Uber, whose meal delivery business performed exceptionally well globally in the most recent quarter, aims to finalize the all-cash deal by the first half of 2025. This acquisition, one of the largest in Taiwan outside of the semiconductor industry, also signifies Delivery Hero’s withdrawal from Asia. Both companies emphasized that the takeover is subject to regulatory approval, which could be challenging given that Uber and Delivery Hero are currently the two dominant players in the market.
Foodpanda and UberEats have been close competitors in Taiwan’s food delivery sector for years. As of August 2023, Foodpanda held a slight lead with 52% of food delivery order volume compared to UberEats, according to data from Measurable AI, a Hong Kong-based firm that tracks business receipts.
Delivery Hero stated that it plans to use the proceeds from the deal to repurchase convertible bonds.
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4. Fed Disappointed in Inflation Progress
Shares of Zeekr Intelligent Technology Holding Ltd., the premium electric vehicle subsidiary of Zhejiang Geely Holding Group Co., surged up to 40% following an expanded initial public offering, marking the largest U.S. listing by a China-based company since 2021.
Zeekr’s American depositary shares (ADS) debuted at $26 each on Friday after the company successfully sold 21 million shares—3.5 million more than initially planned—at the top of its marketed price range of $18 to $21. By midday in New York, the shares traded at $28.70 each, valuing the company at approximately $7 billion.
The IPO’s underwriters have the option to buy up to an additional 3.15 million ADS in an over-allotment option. If exercised fully, this would increase the total offering to 24.15 million ADS, which would represent about 9.1% of Zeekr’s issued share capital.
Prior to the offering, notable investors such as Geely Auto, Mobileye Global Inc., and Contemporary Amperex Technology Co. Ltd. expressed interest in subscribing for up to $349 million worth of shares, as stated in Zeekr’s filings.
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5. GameStop Hard to Rally Like 2021
GameStop Corp. shares are soaring again, with the internet buzzing about someone known as ‘Roaring Kitty.’ However, unlike the meme stock frenzy of 2021, there’s a notable absence of the bullish options buying that previously drove a 1000% surge.
Since Friday’s close, GameStop shares have nearly tripled, fueled by the social media return of Keith Gill, who spearheaded the 2021 retail mania. Day traders have also flocked to other favorites like AMC Entertainment Holdings Inc., Rivian Automotive Inc., and Lucid Group Inc.
As shares surged and traders bought short-dated call options, sellers of these contracts hedged their positions by purchasing the underlying stock, further driving the rally. Nearly 700,000 options contracts changed hands on Monday, the highest number since 2022.
While the dynamics of 2021’s frenzy, such as outsized call buying and euphoric stock trading, are similar, the scale is different. The number of outstanding call options for GameStop is about 25% of its 2021 peak, and Monday’s volume of calls was only one-tenth of what moved in January 2021.
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6. EQT-Backed Waystar to Go IPO
Waystar Holding Corp. is aiming to raise up to $1 billion in its US initial public offering, according to sources familiar with the matter.
The EQT AB-backed firm could be listed as soon as June, though the sources requested anonymity as the information is confidential. Waystar publicly filed for a Nasdaq listing in October and has been monitoring market conditions to determine the best timing for the IPO, Bloomberg News reported.
Details of the offering might still change, the sources noted. The Wall Street Journal earlier reported on the IPO timing and mentioned that the company is likely to target a valuation between $5 billion and $6 billion.
A representative for EQT declined to comment, and a representative for Waystar did not immediately respond to a request for comment.
In its filings with the US Securities and Exchange Commission, Waystar disclosed growing revenue. The company reported a net loss of $51.3 million on revenue of $791 million in 2023, compared to a net loss of $51.5 million on revenue of $705 million the previous year.
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7. De Beers to Be Sold or Spun Off
The diamond industry is already under pressure due to slumping prices, Russian sanctions threatening trade, and the rise of lab-grown gems cutting into traditional markets.
Adding to these challenges, Anglo American Plc announced on Tuesday that it will spin off or sell its De Beers business, ending an almost century-long association with the industry’s most renowned name. This decision, part of a broader restructuring effort to fend off a $43 billion takeover attempt by BHP Group, represents a seismic shift for the diamond world.
The uncertainty surrounding the future operations of a newly independent De Beers is unsettling some of the industry’s biggest players. The entire supply chain is accustomed to how an Anglo-backed De Beers functions in a market it largely dominates. The prospect of a new owner could disrupt the established methods of diamond sales, causing significant concern within the industry.
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.