The week in investor relations: Divestments over lobbying and unusual IPOs
– Storebrand, the Nordic investment manager with more than $90 bn in assets, divested from mining and energy companies over their lobbying activities related to climate change, reported the Financial Times (paywall). The firm sold holdings in ExxonMobil, Chevron, Rio Tinto and Southern Company, as well as German chemicals group BASF. ‘Storebrand’s move is thought to be the first example of a big investor explicitly divesting from oil producers and miners for alleged lobbying against tougher environmental standards,’ noted the article.
– The value of US tech company Apple grew larger than the combined market capitalization of the FTSE 100, reported the BBC. On Wednesday, the iPhone maker was valued at $1.7 tn, compared with $1.5 tn for the UK’s blue-chip index. US tech stocks have soared since March, while European shares have struggled. ‘The FTSE 100 is a dinosaur, full of rather lumbering old-world stocks with precious little growth to offer,’ commented Neil Wilson, chief market analyst at Markets.com, in the article.
– The NYSE’s proposal to allow a new type of direct listing went on hold after the Council of Institutional Investors intervened and asked the SEC to review the plan, according to the Wall Street Journal (paywall). In the past, reviews of this kind have taken months, noted the article. The council said the changes could allow companies to avoid certain protections that are part of a traditional IPO. An NYSE spokesperson said: ‘The ability to raise capital with an NYSE direct listing represents an innovative new path to the public markets, and we intend to ask the SEC to lift its stay to make this important resource immediately available to issuers and investors.’
– The London Stock Exchange is set to host a major IPO for the first time since the Covid-19 outbreak after The Hut Group, a UK e-commerce firm, announced its plans to go public later this month, reported CNN Business. The Manchester-based company aims to raise £920 mn ($1.2 bn).
– Meanwhile, the US is gearing up for an IPO the likes of which Wall Street ‘has never seen’ before, reported the FT. Palantir, which provides software and consultancy mainly to the US government, has announced plans for a direct listing on the NYSE. The company is heavily loss-making and does controversial work, such as developing highly sophisticated surveillance tools. It is also a ‘lightning rod for a polarized America,’ noted the article, given the backing co-founder Peter Thiel gave Donald Trump during the 2016 presidential election campaign.