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Shein’s I.P.O. Presents Tests on Wall Street and Washington

In filing confidentially for an initial public offering, Shein, the ultrafast-fashion retailer, is showing ambition on two fronts.

The company and its underwriters are betting that investors will be more receptive to I.P.O.s, even though high-profile market debuts this fall largely fizzled out. Shein is also testing whether it can endure what’s likely to be an increase in political heat on the China-founded e-commerce giant.

The company has cut some of its most prominent ties to China, after drawing pushback from Washington. Some of its changes have included moving its headquarters to Singapore and de-registering its original incorporation in Nanjing. The company has also set up operations in Ireland and Indiana and hired an array of lobbyists in the U.S.

But that hasn’t been enough to erase the scrutiny. “No one should be fooled by Shein’s efforts to cover its tracks,” Senator Marco Rubio, Republican of Florida, wrote in a letter to other lawmakers.

Accusations of forced labor are a major concern. Shein has been dogged by allegations that it has sourced material from Xinjiang; the U.S. has sought to ban imports of clothing from the region in northwest China, citing human rights abuses of the Uyghur ethnic minority there.

Last year, Bloomberg reported that some Shein products were made with Xinjiang cotton. Members of Congress and state attorneys general have pushed the S.E.C. to require that the company certify through an independent process that it doesn’t use Uyghur forced labor. (The company has said it has “zero tolerance” for the practice and has no manufacturers in Xinjiang.)

Shein is also hoping that investors will welcome an I.P.O. Bankers had hoped that the long-moribund market for new listings would reopen this fall with offerings from the chip designer Arm, the grocery delivery service Instacart and the sandal maker Birkenstock. Instead, those debuts quickly busted.

But deal-makers say 2024 is a better bet for I.P.O.s because of improving economic and market conditions. (And both Arm and Birkenstock have since seen their shares climb above their listing prices.) Shein — which is working with JPMorgan Chase, Goldman Sachs and Morgan Stanley — also has high hopes for its valuation, now said to be at $66 billion.

The retailer isn’t the only well-known company betting on an I.P.O. revival: Reddit is reportedly testing the waters for an offering, and the luxury sneaker maker Golden Goose is said to be taking steps toward a listing as well.

Israel and Hamas extend their cease-fire. The tenuous agreement opens the door for more aid to flow into Gaza and the potential release of more hostages and prisoners. It comes a day after Benjamin Netanyahu, Israel’s prime minister, and Elon Musk toured the site of a deadly Hamas attack on Israelis; Musk is seeking to allay concerns that he has fueled antisemitic sentiment on his X social media platform.

Barclays is reportedly weighing a big cull of investment banking clients. Such an overhaul is meant to cut about $1 billion in costs and raise capital, and would focus on less-profitable clients, according to The Financial Times. High interest rates and a slowing of the global economy have crimped Barclays’ core businesses like lending and deal-making.

E.U. regulators air concerns about Amazon’s $1.7 billion takeover bid for iRobot. Shares in the maker of robot vacuum cleaners tumbled on Monday after antitrust officials in Brussels warned that a takeover could hurt competition. The European Commission is planning to issue a ruling on the deal by February.

Sports Illustrated deletes articles following furor over A.I.-generated content. An investigation by Futurism found that several articles on the publication’s website carried author pictures and profiles that had been conjured up via artificial intelligence. The Arena Group, which has published Sports Illustrated since 2019, said that an outside vendor had created the questionable content.

Last year was tough for the European technology industry, as some $400 billion worth of company valuations evaporated amid market volatility and a worsening economy.

Now, 12 months later, things are looking better, according to the latest annual survey by Atomico, the venture capital firm. But the challenges that stunted growth in 2022 are likely to persist for some time.

Valuations have partially come back, according to Atomico: The total valuation of private and publicly traded tech companies rose to $3 trillion, restoring last year’s losses and returning to levels set during the boom times of 2021.

While the underlying data offer some reason for caution — most of that rise was because of rebounding public market values — there was also cause for optimism. Valuations in the private market are back to their five- and 10-year averages for the most part, though they remain down from 2021 levels.

Just seven new companies reached “unicorn” status by gaining a valuation of $1 billion. That’s down from 108 in 2021 and 48 last year. Meanwhile, the number of “dehorned” unicorns, or those who fell below the $1 billion threshold, has reached 50 in 2023, down slightly from 58 last year.

European start-ups need more capital. Total investments in the tech sector are expected to hit $45 billion this year, down 45 percent from 2022. (That’s still the third-highest year on record.) The number of so-called fund-raising mega-rounds in Europe fell to just 36 this year, down from 163 in 2022.

That’s in part because Europe saw an almost total drop in activity from those known as crossover investors, like Tiger Global and Coatue, who pour large amounts of money into late-stage start-ups. It doesn’t help, Atomico argues, that European pension funds continue to invest just a tiny fraction of their assets in the continent’s venture capital firms.

Other notable findings from the report:

  • Europe is drawing more tech workers, including from the U.S., than it’s losing. The continent now has more A.I.-focused professionals than in the U.S., though many of them still work for American tech giants including Alphabet and Meta.

  • The outlook for investors to exit start-ups remains unclear, given the still-rocky market for initial public offerings. But buyers, including both corporations and private equity firms, are still showing interest in acquiring tech start-ups.


Xi Jinping, the Chinese leader, got a warm welcome earlier this month at a banquet in San Francisco attended by American C.E.O.s hoping for a return to improved U.S.-China business ties. Details of what went on behind the scenes are beginning to emerge.

The C.E.O. of Broadcom, whose $69 billion takeover of VMware had been stymied by Beijing regulators, paid $40,000 to sit at Xi’s table, according to The Wall Street Journal. (Mastercard and Boeing were among the dinner’s underwriters.) But the expense appears to have been worth it, The Journal reports:

A few days after the dinner, China signed off on Broadcom’s deal. Beijing also gave a long-awaited green light to New York-based payments processor Mastercard to issue yuan-denominated cards bearing its brand in the country.

Some observers saw the moves as olive branches to American corporations as firms grow wary of doing business in China. The moves also show how companies can become pawns in the intensifying geopolitical competition between Washington and Beijing.

Boeing, however, hasn’t seen that level of success: It still hasn’t struck a deal to sell more planes in China.


In 2012, when Rajat Gupta, the former C.E.O. of the consulting giant McKinsey, was being tried for insider trading, his wife and four daughters sat in the front row of the spectators’ gallery day after day.

Now, his youngest daughter, Deepali Gupta, 33, has fashioned some of those moments into what she calls a musical tragedy, weaving the public spectacle of the scandal with her family’s internal struggles and her own troubled relationship with her father, writes The Times’s Anupreeta Das for DealBook. The musical, “United States v. Gupta,” ends its run tonight at the 50-seat Brooklyn performance space Jack.

Deepali, a performance artist, composer and playwright, plays herself. The story is told through her perspective, using songs, transcripts, news clips (including from DealBook) and remembered conversations. Actors play multiple roles: bombastic lawyers, courtroom artists and even Judge Jed Rakoff, who also presided over the recent trial of Sam Bankman-Fried. One actor dons a bald cap for a minute to play the former Goldman Sachs C.E.O. Lloyd Blankfein. Rajat’s family members express their boredom while sharing snacks and candy.

The focus is less on Rajat’s fall from grace than on how it devastated his family. Once an adviser to dozens of Fortune 500 chief executives and a hero to many achievement-oriented Indian Americans, Rajat was found guilty of conspiracy and securities fraud for leaking confidential information about Goldman to Raj Rajaratnam, a friend who was then a billionaire hedge fund manager. Rajat was eventually sentenced to prison.

When the play’s characters visit him, there are touching displays of familial intimacy — a mother dealing with a snacking habit (jalapeño Cheetos), a father and daughter playing a card game (Sweep) — even as they tiptoe around the elephant in the room.

Deepali said the idea for the play took shape during the trial, when she was 22. Writing it allowed her to reassess what she remembered, the media portrayals of the trial and how her family had protected her from the ups and downs, she said in an interview, adding that she found it “therapeutic.”

Since being released in 2017, Rajat has tried to rebuild his reputation. In 2019, he published “Mind Without Fear,” about his side of the case. But the play ends with a question from Deepali to her father: “Are you a good man?”

Deals

  • Jeff Shell, the former head of NBCUniversal who left after an internal investigation into inappropriate conduct, is in talks to join the investment firm RedBird Capital Partners. (WSJ)

  • “New Bidder Aims to Save Bankrupt Trucking Firm, if Treasury Goes Along” (NYT)

Policy

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