Gig Economy Doubts
Some of the U.K.’s biggest asset managers are avoiding the hotly anticipated initial public offering of Deliveroo Holdings Plc on ethical grounds.
Legal & General Investment Management, Aberdeen Standard Investments and Aviva Investors all said this week they wouldn’t be investing in the food-delivery company partly over concerns its treatment of riders doesn’t align with socially responsible investing practices.
Like rival Uber Eats, Deliveroo’s employment practices are increasingly under scrutiny as calls for gig economy workers to get more benefits and protection gain traction. U.K. competitor Just Eat Takeaway.com NV has already pledged to offer U.K. workers hourly wages, sick pay and pension contributions.
What’s next? While Deliveroo gathered enough investor demand to cover the full deal size within hours of opening the book, according to terms seen by Bloomberg News, this isn’t an issue that’s going away.
“We would question its potential for expansion in markets like Europe given that the European Commission is considering a shakeup of how the gig economy operates,” said Susannah Streeter, senior analyst at investment firm Hargreaves Lansdown.
The downward slide in Bitcoin is having an outsized impact on the biggest fund tracking the cryptocurrency.
Grayscale Bitcoin Trust dropped sharply this week, closing over 14% below the value of its underlying holdings on Wednesday — a record discount — according to data compiled by Bloomberg.
It’s another sign of how the crypto-rush has slowed since Bitcoin hit a record high of $61,742 in early March. Speculation the latest round of U.S. stimulus checks will be spent in the real economy rather than on markets has cooled interest in assets popular with retail investors, including the likes of Bitcoin and the ARK Innovation ETF.
What’s next? “GBTC has a fixed supply and acts like a leveraged play on Bitcoin,” Bloomberg Intelligence analyst James Seyffart said. “As price goes down, sentiment goes down, GBTC is going to fall further than Bitcoin. Same thing happens on the way up.”
Microsoft Corp.’s latest takeover target is video-game chat platform Discord Inc. The two companies are said to be in talks for a potential $10 billion acquisition.
It’s the latest attempt by Microsoft to tap assets that provide access to online content-creating communities. Last year it sought to buy social-media app TikTok and held talks to acquire Pinterest Inc. after previously successfully buying GitHub and LinkedIn.
Microsoft was one of the many tech giants that thrived during the pandemic, as people forced inside by lockdowns used its enterprise cloud offerings and played its Xbox game console. Shares are up over 48% over the past year.
What’s next? “Microsoft buying Discord would be a really strategic move — it shows that Microsoft understands the power of community in the context of the pandemic,” said Christophe Jammet, a managing director at consultancy Gather. “While Discord has always been a persistent black sheep in the team/productivity comms space, it’s ubiquitous as a community platform for gamers and myriad sub-cultures.”
On Tuesday Intel Corp. unveiled a plan to create a new foundry business that will manufacture chips for other companies. The company will spend an initial $20 billion on two plants in Arizona and will also use rivals’ factories to outsources production of more of its own products.
It’s a major change for the company…