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By Swissquote Analysts
Published on 22.10.2021
Morning news

WeWork Shares Rise on First Day of Trading, Two Years After Failed IPO

Topic of the day

The shared-office company WeWork started trading publicly Thursday, capping a journey to a listing that included the implosion of its initial public offering in 2019 and the ouster of its co-founder and chief executive, Adam Neumann. The company went public through a combination with BowX Acquisition Corp., a special-purpose acquisition company. Shares rose $1.40, or 13%, to $11.78. In 2019, WeWork's IPO fell apart as the company faced questions about its corporate governance and how much it was worth. Now the entity that is making its debut on the New York Stock Exchange has undergone a refresh under Chief Executive Sandeep Mathrani. It has closed locations, renegotiated leases and cut thousands of jobs to reduce expenses during the Covid-19 pandemic. The deal with BowX Acquisition earlier this year gave WeWork a roughly $8 billion equity value. The combination provides WeWork with cash proceeds of about $1.3 billion, the companies said. SPACs, also known as blank-check companies because they raise money with the purpose of seeking a target to merge with and take public, have risen in popularity as companies seek alternatives to a traditional IPO. Share prices for listed SPACs have retreated this year, leaving many blank-check companies trading below their debut prices.

Swiss stocks

Sentiment on the Swiss stock market was rather subdued on Thursday after some domestic companies published disappointing business figures or pessimistic outlooks. The SMI gained 0.2 per cent to 12,039 points. Among the 20 SMI stocks, there were twelve losers and eight gainers. 31.77 million shares were traded (previously: 32.09 million). ABB slumped by 6.2 percent. The third-quarter figures were considered solid by the market, although sales fell short of expectations due to supply chain issues. The online pharmacy Zur Rose had also scaled back its growth expectations. This pushed the share price down by 7.7 per cent. Supply chain problems and higher costs also gained ground for lift manufacturer Schindler (participation certificates -6%), which nevertheless reaffirmed its annual targets. Index heavyweight Nestle (+0.8%) supported the SMI. The shares continued to benefit from the strong figures published by the food company on Wednesday. In the pharmaceutical sector, Roche (+1.6%) recovered from the losses of the previous days. Novartis, on the other hand, fell by 0.2 per cent and thus did not benefit from an agreement with Biontech to produce its vaccine in another plant of the Swiss company.

International markets


European stocks drifted lower on uncertainty about the economic outlook and as investors fretted over Chinese property group Evergrande's potential debt default. The Stoxx Europe 600 index closed 0.1% lower at 469.7 points. In Paris, the CAC 40 and the SBF 120 gave up 0.3% and 0.2%, respectively. In Frankfurt, the DAX 40 lost 0.3%, while the FTSE 100 in London slipped 0.5%. Rexel (-9.4%) reported a 12.6% increase in sales but slightly below analysts' expectations for the third quarter of fiscal 2021, for which its forecast remains unchanged. Eurofins (-7.1%) achieved organic growth of 11.7% in the third quarter, beating analysts' expectations of an average 10% increase. Technip Energies (-6.2%) adjusted its guidance for the 2021 financial year, being notably less optimistic for sales due to the continuing restrictions related to Covid-19 and difficulties encountered by supply chains. Soitec (+8%) raised its guidance for the year ending March 2022. BioMérieux (+4.4%) had an "explosive" third quarter, according to Invest Securities. Unilever (+1.1% in London) saw its underlying sales rise by 2.5% in the third quarter, thanks to sustained growth in the priority markets of the US, China and India. The Anglo-Dutch consumer goods maker also confirmed its forecast for a stable margin for the full year 2021.

United States

The S&P 500 inched higher to a record close Thursday, continuing a weekslong upward march driven by strong corporate earnings and optimistic numbers on the labor market. Thursday’s close of 4549.78, up 13.59 points, or 0.3%, eclipsed a September peak in the index, which had stumbled last month on worries about Chinese growth and stubbornly stuck supply chains. The Dow Jones Industrial Average ticked down 6.26 points, or 0.02%, to 35603.08. Shares of International Business Machines, a Dow component, fell $13.57, or 9.6%, to $128.33. The company reported weaker revenue than analysts had expected in the latest quarter. AT&T shares fell $0.15, or 0.6%, to $25.76 after the company said it expected full-year earnings to reach the high end of its target. Blackstone shares gained $3.83, or 3%, to $132.52 on net income that almost doubled in the third quarter. Of the 80 companies on the S&P 500 to have reported through Wednesday, 81% had topped analysts’ earnings forecasts, according to FactSet, better than the roughly 75% that did so each quarter in 2019. HP raised its dividend and outlook for the 2022 fiscal year, and shares jumped $1.98, or 6.9%, to $30.57. Tesla added $28.20, or 3.3%, to $894 after the auto maker said late Wednesday it had notched a third-straight record quarterly profit. The Consumer Financial Protection Bureau (CFPB), the authority in charge of protecting financial services users in the United States, has opened an investigation into the payment activities of technology giants to determine how they monetise data on their customers' purchasing behaviour. The CFPB said in a statement that it had asked Google, Apple (+0.2%), Facebook (+0.3%), Amazon (+0.6%), Square (+3.8%) and PayPal (-5.8%) to provide information on "their products and practices".


The stock markets in East Asia show slight gains at the end of the trading week. The faltering Chinese real estate group Evergande has averted a default and rises by 4.3 per cent on the Hong Kong stock exchange. The Hang Seng Index is up 0.4 per cent in Hong Kong, supported by property stocks. On the Chinese mainland, the Shanghai Composite advances 0.1 per cent. On the Tokyo Stock Exchange, the Nikkei index gains 0.3 per cent to 28,808 points. The Kospi in South Korea was trading 0.2 per cent higher. Shares of Hanwha Aerospace and Korea Aerospace Industries fall 4.1 and 4.4 per cent respectively after the launch of the country's first homegrown space rocket failed on Thursday.


In the bond market, the US Treasury yield closed 4 basis points higher at 1.676%, up from 1.660% on Wednesday evening. The yield on the German Bund with the same maturity was -0.097%, compared with -0.124% on Wednesday evening.


Deutsche Bank increases Sixt target to EUR 170 (145) - Buy
Berenberg lowers target Rio Tinto to 5,000 (5,400) p - Hold
Deutsche Bank lifts Deutsche Börse target to EUR 179 (178) - Buy

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