Shein’s Latest IPO Attempt & WD-40’s Winning Formula

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**Ann Berry** (0:29)
Paramount and Warner Brothers, the saga continues with today a dozen states suing to block the mega merger. We have the latest on the unfolding Hollywood drama. Wd-40, we dig into the mythology and the sales numbers that have greased the company's stock price up over 25% this year. And Shein, after a few starts, the fast fashion giant is heading toward an IPO. Will the third time be the charm? Over Monday, July 13th, it's Brew Markets Daily and I'm Ann Berry.
More market details to come, but first, fast fashion giant Shein is one step closer to going public. That's after Chinese regulators approved a Hong Kong IPO, a sign of the opening of a key global market that we're watching closely. Well, the news comes as a major breakthrough for Shein after the company's earlier plans to list in either New York or London fell apart. The e-commerce giant with revenues estimated to be $40 billion a year first explored a US listing in 2020 But the company abandoned those plans amid rising tensions between Washington and Beijing. So Shein tried this path again in 2023, having moved its headquarters to Singapore in a bid to downplay its Chinese roots, confidentially filing paperwork with the Securities and Exchange Commission to float on the US stock market and aiming then for a potential valuation of $80 to $90 billion.
But increased scrutiny over its supply chain, which included alleged use of forced labour, plus onerous disclosure requirements put an end to all that. So next, Shein shifted its sights to a London listing. But that effort stalled as UK regulators pushed for more detailed disclosures again on supply chain risks, and in this case as Chinese regulators looked reluctant to let a Chinese company, still one in their mind, go overseas for a listing. Now just to put that in context, a bit of a story here. In June 2021, the ride hailing company Didi listed on the New York Stock Exchange. I remember this. Well, shortly after that $4.4 billion IPO, China's cybersecurity regulators launched probes into Didi's data practices and ordered the removal of its app from Chinese app stores, ultimately pushing the ride share company to formulate a plan to exit the United States, which Didi did, delisting just 11 months after that IPO. And by the way, IPOs are expensive. And in the process, the company sent a chilling message to other Chinese companies considering overseas listings. Well, now Shein is expected to face its Hong Kong Stock Exchange listing hearing later this week, maybe on Thursday, with the IPO of up to 8% of the company potentially following as quickly as in this August. Well, the offering is expected to value the company at between $40 and $50 billion, which is well below its roughly $100 billion private valuation in 2022, reflecting just a tougher market for IPOs with tariff uncertainty when it comes to being an apparel retailer, which Shein is in a big way, and also in the face of growing competition from rivals like Temu.
So for US investors, this IPO matters for a couple of reasons. First of all, it could become one of the biggest global IPOs of the year and serve as an important test of investor appetite for consumer and e-commerce companies. And second, it does offer access to a major player in that major Chinese market, an all-important one, and a way to diversify as tech sentiment in the United States remains hot. We're going to keep on watching.
Coming up in a moment, we survey blowout earnings from WD-40 and ask how one product can power a multi-billion dollar business. But first, a few headlines from the day's trading session, kicking things off in Hollywood with the latest development in Paramount's purchase of Warner Brothers because today a coalition of 12 states sued to block the mega merger, arguing it would reduce competition in the film and television industry and as a result harm consumers. Well, the Justice Department had to prove the merger relatively quickly and regulators in many international markets have already signed off as well. So this antitrust case marks the biggest obstacle that the deal has faced so far, other of course than the fight with Netflix to win it in the first place.

**John** (4:57)
Right. And speaking of Netflix, in a published response to today's lawsuit filing, Paramount reiterated its argument that scaling up is the only way for those legacy studios to compete with the streaming giants. Paramount saying, quote, in a press release, the practical effect of this lawsuit is to shield those dominant streaming platforms like Netflix and technology companies from much needed competition.