Latest News Today: WeWork IPO may be Delayed, GST Cut for Automobiles, Zomato Streaming Platform

Ritesh Agarwal gets approval for $1.5bn stock buyback. WeWork IPO might be delayed. Zomato says its OTT service is only to increase user engagement, not to compete with Netflix, Hotstar etc. GST cut for auto and biscuit manufacturers on the cards?

 

SOFTBANK

Ritesh Agarwal gets regulatory approval for $1.5bn stock buyback.

Oyo Dos Tres: The Competition Commission of India has given its nod to Oyo’s Ritesh Agarwal to undertake a $1.5bn stock buyback alongwith pumping in an additional $500mn into the Gurugram-based company. This transaction, to be conducted through a Cayman-registered entity, RA Hospitality, will see Agarwal’s shareholding rise to an estimated 30%.

WeWork’s IPO might be postponed.

For Another Day: WeWork’s parent company, We Company is reportedly expected to postpone the coworking space firm’s IPO amid valuation concerns and doubts over its corporate governance.

Pressure mounts on Softbank and its investments.

Softbank Faces Hardtimes: WeWork’s IPO fiasco comes on the heels of less-than-flattering IPO performances of Uber and Slack. Amidst all this, Softbank, which has invested in all these firms – including Oyo – has come under fire. (Its valuation gain from Oyo was funded largely by Agarwal himself, who financed this purchase with the help of some Japanese financial groups which in turn count Softbank as a client.) These events have brought regulatory clouds over Softbank. Its Vision Fund has transformed the tech sector in the past two years, but the recent hiccups have added to its debt and hurt its share price. More on this here.

 

WeWork IPO may be Delayed, GST Cut for Automobiles, Zomato Streaming Platform

 

ZOMATO

Zomato says its OTT services is only to increase user engagement, not to compete with Netflix, Hotstar etc.

Zomato Stream: Zomato might have started providing OTT streaming service on its platform but that doesn’t mean it’s looking to participate in the stream wars. The 2,000+ three-to-15 minute videos comprise shows, recipes and Sneak Peek restaurant stories.
 
While the company has plans to probably monetise the streaming feature sometime in the future, this foray into OTT, Zomato says, is purely to increase user engagement and support its food-tech business. (Which is probably a smart thing to do, since competing with giants like Netflix, Hotstar and Amazon Prime, which have a lot of expertise and money, could prove to be a drain on Zomato’s resources.)

Delivery executives take to the streets to protest revised pay and incentives structure.

Hit the Streets: Hundreds of delivery executives have taken to the streets in Bengaluru after Zomato reportedly revised its pay and incentive structure. The new structure, which pays less for long distances travelled and provides fewer incentives to complete more orders per day, has been criticised by delivery agents, who argue it would mean their salaries would take a hit.

 

ECOMMERCE

No slowdown, Amazon says of e-commerce sales. Amazon and Flipkart prepare for their annual shopping festivals – on the same dates.

Every Slowdown Has a Silver Lining: Though talk of slowdown has dampened virtually all sectors of the country’s economy, e-commerce is reportedly still going strong. Amazon, which hosts its annual six-day Great Indian Festival from September 29 to October 4, said it expects sales this year to be better than before. Five lakh sellers are expected to participate in the event, and the rate of sellers being onboarded has reportedly not seen any slowdown in the last 12 months.
 
The same goes for Flipkart, whose six-day sale – Big Billion Days – is scheduled for the same period. (More details about these e-commerce festivals here.)

 

WeWork IPO may be Delayed, GST Cut for Automobiles, Zomato Streaming Platform

 

POLICY

Auto and biscuit manufacturers hope for rate cut ahead of the GST Council meeting on Friday.

Days of Hope: GST Council may announce some reduction in levies on cars, biscuits and some other consumer goods in its meeting on Friday in an attempt to spur demand ahead of the festive season. 
 
Biscuit manufacturers are hoping for a reduced tax burden on lower-priced biscuits or those priced below INR100 per kilo from the current 18% to 5%. Sectors such as hotels, cement and textiles are also betting on some tax relief.

Every Action has an Equal and Opposite Reaction: On the flipside, “sin goods” such as tobacco products may see a rise in cess as the Council tries to cover for the revenue loss. 
 
Interestingly however, Rajiv Bajaj, Managing Director, Bajaj Auto recently opined that the slowdown in the auto sector was largely due to “overproduction and stocking” by companies, emphasizing that there is no need for a cut in GST rates.

Shares of MMTC and STC tank over 16% upon shutdown rumors.

Things Fall Apart; The Centre Cannot Hold: Shares of MMTC and State Trading Corp of India (STC) fell as much as 16% each after a ToI article reported that the government was planning to shut these state-owned trading firms.

 

US CORPORATE

Netflix secures streaming rights for Seinfeld.

Netflix Gets Its Unagi Back: The streaming giant may have lost big now that its two most popular shows – The Office and Friends – will be leaving the platform. But it managed to score big recently when it secured the rights to stream the iconic sitcom Seinfeld. Netflix has landed a five-year contract with Sony Pictures Television to stream all 180 episodes of Seinfeld in the US and around the world from 2021.

Purdue Pharma files for bankruptcy.

Purdue Gets Its Due: Purdue Pharma has filed for bankruptcy even as it negotiated a multi-billion dollar settlement to resolve thousands of lawsuits. The company has been blamed for fuelling the opioid crisis in the US, where prescription painkillers and illegal opioids caused over 400,000 deaths in the last two decades.

 

FIN.

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