10 BARRON’S November 22, 2021
REVIEW
35,601.
Dow Industrials:-498.
Dow Global Index:-2.
10-year Treasury note:-0.
FROM IPO TO BUYOUT
Waiting Game
Gold surged following September in-
flation data. Crypto fell. Stocks rose on
strong consumer spending and revised
job-creation numbers, then wavered,
then ended mixed. Investors appeared
to be waiting for the White House’s
pick to run the Federal Reserve—and,
of course, Thanksgiving. On the week,
the Dow industrials fell 1.38%, to
35,602.18; the S&P 500 gained 0.32%,
to 4697.97; and the Nasdaq Composite
rose 1.24%, to 16,057.44.
Guardrails
After signing the infrastructure bill,
President Biden met virtually for three
hours with China President Xi Jinping.
Both agreed they needed to manage
U.S. and China conflicts. While they
failed to set “guardrails” over Taiwan,
they did begin arms talks. Meanwhile,
House Democrats moved to vote on a
second infrastructure bill, after the
Congressional Budget Office said it
would slightly boost the deficit. Minor-
ity Leader Kevin McCarthy delayed the
vote with a nearly nine-hour speech,
but Democrats passed the $2 trillion
bill on Friday morning anyway.
Trading Carbon
COP26 ended with organizers squeez-
ing out more pledges on emissions
cuts and climate-change funding.
After long talks, participants finally
agreed on rules to create, value, and
swap carbon credits. The key: a U.N.-
certified carbon credit.
Covid: The Battle Goes On
Pfizerlicensed its Covid-19 pill for
distribution globally, contracted to
sell the U.S. 10 million courses for
$5.3 billion, and applied for the treat-
ment’s regulatory approval. Also,
Pfizer andModernawon authoriza-
tion for vaccine boosters for all U.S.
adults. Meanwhile, Europe battled
another Covid surge, with countries
from Ireland to Austria beginning to
lock down, particularly targeting the
unvaccinated.
Duxit
Oil giantRoyal Dutch Shell, under
pressure from Third Point, said it
would jettison its dual-nation share
Casper’s
Bumpy Ride
Just before going public in February 2020,Casper
Sleeptouted a $432 billion “global sleep economy”
growing at a compound annual growth rate of 6.3%.
“Sleep has entered the global wellness equation,” the
mattress company said.
The equation didn’t compute. This past Monday,
Casper agreed to a buyout from private-equity firm
Durational Capital Management for $6.90 a share.
That’s nearly double Casper’s recent stock price and
the deal news sent the shares soaring 88%, finishing
the week at $6.55. But it’s far from a win for Casper
shareholders.
In February 2020, Casper priced its initial public
offering at $12 a share. Agreeing to a buyout at less
than half the IPO value is a major disappointment for
the mattress company, which helped pioneer a whole
category of direct-to-consumer businesses. While the
IPO market has thrived in recent years, the Casper
deal is a reminder that economics usually win out.
And Casper’s were challenged, to say the least.
While Casper became a venture-capital favorite—it
raised as much as $300 million and reached the $1 bil-
lion “unicorn” valuation threshold before going public—
retail investors saw it as one more heavy-handed mat-
tress pitch. When Casper went public, it had to slash its
price. Ultimately, the IPO raised $100 million at a $
million valuation, less than half the company’s private-
market value.
Casper’s value sagged from there. Durational’s buyout
values the company at some $300 million.—Alex Eule
$13.3 K
Recent cost to ship a container
across the Pacific, down 26%
last week, the biggest drop in
two years
1.7%
Rise in retail sales in October,
up 16% in a year, a good start
to the holiday shopping season
11 %
Percentage of Americans who
will buy nothing over the holi-
days, twice that of last year,
from a Deloitte survey
$81.3 K
Average U.S. nurse’s salary in
the first nine months, up 4%,
compared with 3.3% in 2020
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THE NUMBERS
HE SAID
“It scares me
when I see what
we’ve given up in
natural prudence
and caution.”
Loomis Sayles Vice Chairman
Dan Fuss, on fears that investors
are taking on too much riskstructure and shift its tax residence to
the United Kingdom, citing, among other
issues, a Dutch withholding tax that lim-
ited dividends and buybacks. The Neth-
erlands then rushed to abandon the tax,
while threatening an exit charge. A
Dutch court has also ordered the com-
pany to rapidly decarbonize.
Annals of Deal Making
Elon Musk sold some $9 billion inTesla
shares, and the company was separately
sued byJPMorgan Chasefor $162 mil-
lion. The bank alleged a breach of contract
over stock warrants after Musk’s 2018
take-private tweet...KKRand Global In-
frastructure Partners agreed to buy data-
center operatorCyrusOnefor $15 billion,
whileAmerican Towersaid it would
acquireCoreSite Realtyfor $10 billion...
Carlyleis spending $2 billion for Swiss-
based AutoForm Engineering, an indus-
trial software maker...China Evergrande
said it would sell its stake in a film pro-
duction company to raise cash, taking a
$1.1 billion loss...Deereworkers approved
a new six-year contract, ending the
strike...Unileveris selling Lipton Tea
to CVC Capital for $5 billion. Illustration by Elias Stein; To Come Credit; Photo By Christopher Goodney/Bloomberg