The best way to describe an initial public offering (IPO) that jumps double digits out of the gate? “Nothing new.”
On closer look, however, the best way to describe one that jumps more than 70 percent the first day? If you’re a skeptic, it's “too much, too fast.” If you’re anybody else: “Sizzling.”
Japanese unicorn Mercari, which came to market this week, raised $1.2 billion, pricing at the top of its range target, then saw its shares scream higher by as much as 77 percent. The stock was valued at 6,000 yen in intraday trading, and there are a number of notable asides here, too.
Mercari was among the largest on the Japanese exchange known as Mothers, which is geared toward startups. The 70-plus percent gain took its place among other heavy hitters at the intersection of finance and tech. Adyen soared roughly 90 percent on its first trading day, for example.
Yes, the company wants to branch out, and the Japanese firm is anticipated to pursue greater presence in the U.S. and other markets. That expansion has the duality of exciting investors and encouraging potential app users.
In fact, that is where the true sizzle might lie. After all, the download count stands at approximately 71 million in just five years, which indicates a pretty strong half-decade. Mercari's app is tied to a marketplace that may echo eBay — but only echo, as it has made its bones on bringing buyers and sellers for used goods.
In Japan, the clamor for trade among items that previously changed hands is mounting. Deflation is rising, as is thrift. Matching buyers and sellers is nothing new, of course, and mobile is proving to be a new conduit. That Mercari has gained a following of 71 million downloads proves there is room for marketplaces beyond marquee names like eBay and Craigslist.
Mercari's U.S. downloads stood at 37 million at the end of the first quarter, and gross merchandise volume reached 6 billion yen. That doesn't seem like much, compared to the roughly 93 billion yen logged in Japan, but it’s still sizzling when measured from a standing start.
Expansion aside, the business model is one that shows the traction, and attraction, of person-to-person (P2P) networks. Cutting out the middleman does a number of things, like speeding time to final transactions. The echoes of eBay might be there, and, yes, Mercari is known in some circles as a “flea market app.” But the Wall Street Journal noted the company is focusing on a few things that make it stand out in Japan and in general. There’s its focus on used goods, for one.
“We want to do away with throwing out things,” CEO Shintaro Yamada has said. “I think we fill a universal need.”
Technology is another leg up on postings that might be on other sites, as the Mercari database allows users to create ads just by posting photos from a smartphone. The company also emails prepaid labels to help speed the process of getting items into buyers' hands. In May, Seven-Eleven Japan joined up to let customers ship items sold through the app to 20,000 convenience stores nationwide, Nikkei Asian Review reported, and Mercari is looking to offer its own payment settlement options.
All of this goes to show that, in the digital age, one man’s trash is certainly another man’s treasure.
Furniture sales: Of the digital kind, got legs — and not just table legs, either. Sales via Amazon Furniture grabbed $4 billion in sales last year, and its tally has tripled in just three years, according to industry news sources One Click Retail and Chain Store Age. Talk about “table” stakes.
Holding bank stocks pays dividends: Shareholders in 22 of the U.S.’s largest listed banks are set to receive almost $170 billion in dividends and stock buybacks over the coming year, 25 percent more than in 2017.
Zelle: Is making leaps like a gazelle. It is on track to reach more than 27 million users in the U.S., top Venmo and grow 73 percent in 2018. P2P has certainly become entrenched in daily life.
Economic growth: Central bankers are frowning at the impact of the gross domestic product (GDP) bite that looms from the trade war between China and U.S. The feud could shave 20 basis points from the growth of the world’s largest economies, proving that there are really no winners in a trade war.
Phishing: Is on the rise via an old standby: Email scams. Most firms seem to have seen them, and a new Barracuda study shows that 90 percent of businesses have been under fire from them. Those Nigerian princes appear to want to give money to everybody!
Bithumb: The firm has gotten a thumb in the eye, reporting $31 million of its digital tokens were stolen. The news underscored the security weaknesses that continue to plague cryptocurrencies, and was enough to send bitcoin down several percentage points before recovering — a bit.