Data Dive

Data Dive: Adyen’s Big IPO Price, Apple Pay’s Festival Play And The “Golden Era of Banking”

Saturday crowned horseracing’s 13th Triple Crown Winner, with its winner, Justify, now well positioned as a cash machine for its owners. Payments saw several players jockeying for a similar place in the winner’s circle last week too: Adyen with its IPO, Apple Pay with Order Ahead, and Traditional Banking with its “golden age” thanks, in part, to deregulation. Dive in for the details.

This weekend, Justify won the Belmont Stakes to win the Triple Crown, an event that was somewhat surprising due to its timing. Just three short years ago, American Pharaoh also went home from the Belmont as a Triple Crown winner, the first in 38 years to triumph in all three races (13 horses got ⅔ of the way there only to fail on the Belmont).

Before American Pharaoh’s big win, racing experts began to opine that the Triple Crown was basically impossible for modern horses to win, and that perhaps changes to the structure ought to be made. Now that two modern horses have taken home the big prize, it seems opinions have reversed.

The moral of the story: Trying to predict horse races in general, without knowing the horses involved, makes for bad predictions. The Triple Crown was impossible in modern racing – until it wasn’t, due to two specific racers.

So, who are the horses to watch and bet on this week?
 
Adyen’s Big IPO Ambitions
 
As of this week, Adyen’s IPO got an official price for when it hits the Euronext stock market in Amsterdam later this month. According to reports in Financial Times, the Dutch payments group has an equity valuation of between €6.5 billion and €7.1 billion. If it lives up to prediction, it will be one of the EU’s largest IPOs in recent memory; Adyen is one of only a handful of European unicorns.

But despite that, the estimate has come in a bit lower than some had predicted. When the IPO was announced a month ago, the expected valuation was in the €9 billion range.

According to Adyen, existing shareholders will sell off up to 14.2 percent of the shares in the company during the IPO, for a share price of between €220 and €240 a share. The whole offering is estimated to clock in between €922m and €947m.

“This offering provides us with the freedom to keep building the company, while offering our shareholders a path to liquidity,” said Pieter van der Does, co-founder, in a statement. “Adyen will remain a company that is driven by a long-term vision and strategy. We feel that we are still in the early stages of a remarkable journey. Our focus remains on building new functionality and on helping our merchants grow.”

Adyen’s central service is providing payment services to multinational firms, including Uber and Airbnb, which are both known partners.

Apple Hits the Festival Scene

In its ongoing attempt to pump up Apple Pay into a service robust enough for more than 5 percent of potential users to actually start using it, the mobile payment service is looking to add another offering to its quiver: order ahead.

The new service got its first test run at Napa Valley’s BottleRock music festival last weekend. Located just 100 miles from Apple’s headquarters, the festival has been used to test out Apple Pay previously. Last year’s test drive included Square’s Apple Pay-ready point of sale system and special fast lanes for customers who used the payment method. Apple reported that 30 percent of all transactions at BottleRock were made with Apple Pay.

When it is rolled out this year, the order ahead feature will let users select their nearest concession stand from within the festival app and then order drinks and pay using Apple Pay, authenticating with either their face or fingerprint. Customers can then pick up their beverages at a dedicated window without the hassle of waiting in line.

In further efforts to boost its reach among consumers, Apple has also been pushing international availability of the service, as well as increased integrations with transit systems worldwide. In May, Apple ran a promotion offering customers free grocery delivery with Instacart when they made purchases via the digital payment service.

Will order ahead ignite Apple Pay?

Only if it can appeal to a bigger audience than those attending a festival in Napa Valley.

The Golden Age of Banking

Jamie Dimon is always quotable – this time, it’s on the subject of U.S. banking.

“You guys thought I was kidding when a few years ago I said, you can have a golden age of banking,” Dimon said on June 1. “I mean, you’re going to have a golden age of banking. You have a golden age of banking.”

Dimon pointed specifically to “disappearing” regulatory issues and rising satisfaction scores across the banking industry.

As satisfaction is going up – and regulators are backing down – Dimon also noted the banking industry’s favorable financial returns.

“Look at [JPMorgan’s] financial results alone — they’re extraordinary and consistent, year after year,” he pointed out.

JPMorgan’s return on tangible common equity was approximately 7 percent during the financial crisis, a metric that rose to around 14 percent in 2017.

The recent quotes followed Dimon’s affirmation in the wake of JPCM’s most recent earnings release that “2018 is off to a good start, with our businesses performing well across the board.”

Chase has 47.9 million digital customers to call its own, up from 46.7 million in the same period last year. The bank had fewer branches than it did the year before: 5,217 last year compared to just over 5,100 in the latest quarter.

Mobile, however was a particularly strong position, with 30.9 million compared to 30 million at the end of the year and 27.3 million in the first quarter of last year. Excluding commercial cards, credit card sales volume was $157 billion, with 12 percent growth over last year. Auto loans were up 5 percent year on year.

Golden era for Chase, anyway.

So what did we learn this week, other than that modern horses clearly suffered a years-long bum rap?

Always makes sense to watch a story evolve.

We’ll keep you posted.

Have a good week.

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