Good morning and happy Friday.
The IPO market is open for business. Shares of chip designer Arm were priced at a healthy $51, launched at $56.10, and ended the day at $63 yesterday, an increase of 25% that left the company’s valuation at $65.2 billion—roughly double the price Masayoshi Son’s SoftBank paid for it in 2016. That will help the legendary investor get over his WeWork debacle. It’s the biggest IPO since carmaker Rivian debuted in 2021.
Don’t expect a big flood of IPOs to follow. Arm’s price got an extra boost from investor enthusiasm about AI, which has increased demand for Arm chips. But still the IPO can be seen as one more sign that the market slowdown is nearing an end. For the right companies, markets are ready to pay.
That won’t stop Citigroup CEO Jane Fraser from pursuing a major restructuring, however. “We will be saying goodbye to some very talented and hardworking colleagues,” she wrote in a memo to staff yesterday. Analyst Mike Mayo of Wells Fargo said the move was designed to address Citi’s “worst-in-class efficiency.” The bank did not specify exactly how many people would be losing their jobs.
Enjoy the weekend. I plan to spend it reading Walter Isaacson’s new book on Elon Musk. Not quite sure what new the book has to say about the Tesla CEO, but it has certainly proven Isaacson is without peer in book promotion. “Exclusive” excerpts have already appeared, well, everywhere, as have interviews with the author. I’ll give my review on Monday.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
‘All garbage’
Low-quality items, often made in China, are making sellers wary of TikTok’s new e-commerce offering, with one influencer calling products sold on the social media app “all garbage.” Brands are also frustrated with TikTok’s unwillingness to share customer data. Developer ByteDance is hoping TikTok Shop in the U.S. will replicate its success in China, where consumers spent over $200 billion on products last year. Fortune
Stacey Abrams on outreach
Companies trying to downplay their ESG and diversity efforts won’t succeed in tamping down political blowback, former Georgia state minority leader Stacey Abrams said at Fortune’s Impact Initiative conference. “When you are silent,” she says, it’s “often seen as consent.” Abrams said companies need to do more outreach to minority communities as a source of talent: “You make more money when more people can afford to use your products,” she says. Fortune
Flexport runs aground
Revenue at logistics startup Flexport fell by almost 70% in the first half of the year. The startup also burned through $300 million in cash, particularly due to recently-pushed-out CEO Dave Clark’s drive to hire tech talent. Freight rates have collapsed as the COVID-era boom in ecommerce ends, pressuring Flexport’s business and encouraging founder and executive chair Ryan Petersen to return as CEO. The Information
AROUND THE WATERCOOLER
Mike Bloomberg might actually have a point with his absurd claim that remote workers are all playing golf every Friday by Jane Thier
Databricks, a leading IPO candidate, is valued at $43 billion in new funding round from T. Rowe Price, Nvidia, a16z and others by Luisa Beltran
Bolt CEO: ‘America’s FedNow service has much to learn from India’s breakthrough payments system’ by Maju Kuruvilla
Global JPMorgan strategist says oil price surge ‘doesn’t seem worth losing sleep over in 2023’ by Eleanor Pringle
This edition of CEO Daily was curated by Nicholas Gordon.
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