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The Borsa is worser.
Borsa Italiana listing disappoints + greedflation
Only weeks after agreeing to pay $8.9 billion to tens of thousands of people that claimed its baby powder gave them cancer, Johnson & Johnson is ready to spin off its ‘health’ division. The bewildering part is that the market can’t get enough of the deal and so the IPO will be priced in the upper range. Presumably other products in the consumer health range include cigarettes, fireworks and chicken that was left in the car overnight but might still be OK.
The lowdown
🧴 Johnson & Johnson prices the IPO of its consumer health division Kenvue at upper end.
📈 US Federal Reserve raises rates for the tenth time since March 2022.
🏦 Regional bank chaos continues with PacWest the latest to weigh options.
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Credit: Midjourney
Greedflation
‘Greedflation’ refers to a situation where businesses and investors exploit inflationary conditions to increase their profits, often at the expense of consumers.
The concept suggests that during periods of inflation, companies may use the economic environment as an excuse to raise prices excessively, which in turn contributes to further inflation. This creates a feedback loop where higher prices lead to even higher prices, ultimately affecting the overall economy and hurting consumers.
Is this what is happening now? Well the FT argues that it may be at least partially responsible due to the fact that higher prices have coincided with higher profits for the S&P 500 ($).
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Credit: REUTERS/Claudia Greco
Borsa Italiana listing disappoints
Europe may have just given companies another reason to list in New York. Italian gambling group Lottomatica listed in Milan on Wednesday and shares in the company promptly fell and finished down about 9% at €8.2 per share.
This came after the group had already priced its IPO at the bottom of the range at €9 a share, valuing the company at €2.26 billion – significantly below initial expectations.
Recent IPO activity in Europe has been relatively scarce, with only a handful of companies braving the turbulent markets this year. The mixed results have not provided encouraging signs for those looking to list in Europe. In another example, Milan-based Design Brands announced it would proceed with its listing at a price that values the company at €293 million, also below initial expectations. London may no longer be an IPO destination of choice, but it appears that the Borsa is worser.
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Off-balance sheet items
Next time you’re having trouble sleeping, perhaps you could watch one of the most weirdly relaxing videos on the internet. Alternatively, you could read one of our rival business and finance newsletters – they always put me to sleep.
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