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The Information AM

Mar 24, 2021

Good morning! WarnerMedia will return to releasing movies first in theaters. Stock-trading app Robinhood has filed confidentially for a U.S. public offering. Medium announced it is offering voluntary buyouts to all of its journalists and editors.

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WarnerMedia Switches Back to Theatrical Exclusives

By Martin Peers | Source: Variety

WarnerMedia appears to be done with its 2021 experiment of releasing movies simultaneously on HBO Max and in theaters. The company has struck a deal with the Regal theater chain under which Warner films will have a 45-day exclusive window, which means streaming release would be delayed by at least six weeks after films show up in theaters.

The deal, reported by both Deadline.com and Variety, is a return to a more traditional approach for Warner, which drew intense criticism from parts of Hollywood when it announced in early December the simultaneous release approach. Warner said at the time it was doing so because of Covid, which had shuttered many theaters, and that the new approach would be only for 2021.

Still, while the Regal deal appeared to be consistent with its previous statement, Warner didn’t immediately issue its own statement. It’s possible Warner won’t release all of its movies under the new schedule outlined by Regal, preserving some lower-budget films for a streaming release.

Robinhood Files Confidentially for Public Listing

By Kate Clark | Source: Bloomberg

Stock-trading app Robinhood has filed confidentially for a U.S. public offering, Bloomberg reports. The Silicon Valley-based business plans to list its shares on the Nasdaq, according to a previous report from CNBC. Whether the company is planning a traditional IPO or a direct listing is not yet clear.

Robinhood raised several billion dollars earlier this year amid record-breaking downloads of the app, which is credited for introducing a new wave of retail investors to public stock-trading.

The business is backed by VC investors including Andreessen Horowitz, Sequoia Capital and Ribbit Capital.

• The People With Power at Robinhood

Medium Offers Buyouts to All Editorial Staffers

By Alex Heath | Source: The Information

The blogging platform Medium announced it is offering voluntary buyouts to all of its roughly 75 journalists and editors, most of whom it hired away over the past few years from publications like Fast Company and Mashable to build bespoke publications around topics like tech and health.

In a post on Medium, CEO Ev Williams said the company planned to focus more on supporting individual writers who use the site to publish—a likely acknowledgment of the rise of Substack, which has increasingly lured big name journalists to its paid newsletter platform. As part of the shift away from producing its own journalism, Williams said that Medium’s vice president of content who led its roster of publications, Siobhan O'Connor, is leaving the company.

“The bet was that we could develop these brands, and they would develop loyal audiences that would grow the overall Medium subscriber base,” Williams, who previously cofounded Twitter, wrote. “What’s happened, though, is the Medium subscriber base has continued to grow, while our publication’s audiences haven’t.”

The change comes about a month after a failed unionization effort by Medium’s editorial department. During a virtual meeting with staffers on Tuesday, company leaders acknowledged that the plan to offer buyouts was formed after the union drive, and that they wanted to give employees who weren’t happy with their roles and the shifting editorial strategy an option to leave, according to two people who heard the remarks and requested anonymity to speak without the company’s permission.

When asked by editorial staffers what they would do at Medium if they didn’t accept the buyout, Williams said one possibility would be shifting to support and edit individual writers, one of the people said. Medium’s head of communications, Sandee Roston, told The Information that staffers who stay “may continue writing for a publication, or some iteration of it.”

Delivery Startup GoPuff Raises $1.2 Billion

By Shai Oster | Source: The Information

GoPuff, the SoftBank-backed delivery startup that delivers convenience store items, said its value after a new cash injection had more than doubled to $8.9 billion.

The startup said it raised $1.15 billion from investors including D1 Capital Partners, Fidelity Management and Research Company, Baillie Gifford, Eldridge, Reinvent Capital, Luxor Capital and SoftBank’s Vision Fund.

It became popular in recent years for 30-minute deliveries of Juul pods, beer, ice cream and munchies to college campuses, and recently has been trying to focus more on regular household products as it expands into more cities.

CFIUS Opens Review of TuSimple Shareholder Ahead of IPO

By Shai Oster | Source: The Information

TuSimple, the biggest self-driving truck startup, said in its prospectus that the Committee on Foreign Investment in the United States has launched a review of one if its investors ahead of its IPO.

The company said the U.S. government agency charged with reviewing the national security implications of foreign investments in U.S. companies was looking into Sun Dream Inc., a shareholder which it said is an affiliate of affiliate of Sina Corp., one of its biggest backers and operator of the Chinese Twitter-like site Weibo. In the filing, TuSimple said Sun Dream is “ultimately controlled by” Charles Chao, Sina’s CEO.

The filing also laid out that TuSimple has lost about $300 million in the past three years, underscoring the costly challenges still posed by driver-less trucks. Long-haul trucking on highways was at one point seen as en easier problem to solve than tackling the complexities of city driving.

• New Data Show Reality Behind Self-Driving Truck Startup’s Funding

Intel Spending $20B to Build Two New Chip Plants

By Kevin McLaughlin | Source: The Information

Intel is spending $20 billion to build two new chip fabrication plants in Arizona while also rekindling plans to provide chip manufacturing services to other companies in the U.S. and Europe, CEO Pat Gelsinger said in his first major news conference since taking the helm last month.

Gelsinger also said Intel won’t be separating its chip manufacturing operations from its chip design, as some investors have called for it to do. And Intel’s efforts to develop 7-nanometer chips, which have encountered numerous delays, now appear to be back on track.

The moves–which sent Intel shares up more than 7% in after-hours trading–show how Gelsinger is addressing key questions about Intel’s future. The event also included appearances from Microsoft CEO Satya Nadella and IBM CEO Arvind Krishna, underscoring how Intel’s longtime business partners are still on board after several years of turmoil.

While Gelsinger described Intel’s efforts seven years ago to provide chip manufacturing services to other companies as “somewhat weak,” he said things will be different this time around. “The market is really different today, and there is strong demand for semiconductors,” he said at the event.

Hopin Acquires Two More Video Streaming Firms

By Mark Di Stefano | Source: The Information

London-based Hopin bought two more video streaming businesses as the virtual events start-up spends some of the hundreds of millions of VC-funding it’s raised.

The company, which stages online events and conferences, has benefitted hugely from the worldwide shift to working from home, raising $570 million in VC-funding since founding two years ago, at a valuation that reached $5.65 billion.

On Tuesday, Hopin CEO Johnny Boufarhart said the firm had acquired video hosting platform Streamable and video collaboration app Jamm, with both products to be incorporated into Hopin’s platform. Hopin did not reveal how much it paid for the companies.

It comes after Hopin acquired two other companies in quick succession at the turn of the year: mobile app maker Topi, for an undisclosed amount, and StreamYard, for $400 million.

Telegram Raises Over $1 Billion in Debt Ahead of Public Listing

By Alex Heath | Source: The Information

Messaging app Telegram has raised over $1 billion in debt ahead of an eventual public offering, according to founder and CEO Pavel Durov.

To secure the financing, Telegram sold corporate bonds to “some of the largest and most knowledgeable investors from all over the world,” Durov announced on his Telegram channel, where he regularly communicates with the app’s 500 million monthly active users, most of whom live outside of the United States. In a separate press release, Telegram confirmed that it sold $150 million in five-year, pre-IPO convertible bonds to Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company, and its venture firm affiliate Catalyst Partners.

The confirmation comes after The Information first reported in January that Telegram planned to raise roughly $1 billion in the form of debt that would convert to equity at a future public listing. While raising such a large sum of debt is unusual for a startup like Telegram, which doesn’t yet generate revenue, Durov has resisted pressure to sell shares in the fast-growing firm in order to maintain its independence, opting instead to mostly fund it with his personal fortune until now.

While investors in this bond deal are certainly banking on the promise of a future public listing, Durov recently announced that Telegram will start making money in the meantime by selling ads in its channels, which function like large group chats for thousands of people. The app also plans to introduce paid features, such as subscriptions and tipping. Durvov has said Telegram needs at least a few hundred million dollars per year to fund its operations and infrastructure.

• Telegram Founder in Talks to Raise Debt Amid App’s Explosive Growth

Amazon Looks to Sell $140 Million in Deliveroo Shares in IPO

By Mark Di Stefano | Source: The Information

Amazon is among a group of big-name investors looking to quickly cash-in on food and grocery delivery company Deliveroo’s initial public offering next week.

In a new filing related to the IPO, Deliveroo said Amazon will sell shares worth about $140 million, which will reduce the internet giant’s 16% stake in the company to 11.5%. That remaining stake stands to be worth more than $1 billion.

Index Ventures, Bridgepoint and Accel are among the other Deliveroo shareholders, who will each have stakes of more than 4% in Deliveroo after selling some of their shares in the IPO.

One of the reasons Deliveroo’s public debut is so closely watched is the company’s founder and CEO Will Shu will be the first to benefit from new dual-class shareholder rules ushered in by the U.K. government. Deliveroo said in its filing that Shu will hold onto a 6.2% stake, worth about $690 million, but retain 57% of the voting rights in the company.

The London-based Deliveroo is expected to make its public market debut next Wednesday, selling shares between £3.90 and £4.60. At the mid-point of that price, Deliveroo’s public valuation will be about $11.3 billion.

Compass IPO Pricing Shows Win for SoftBank

By Cory Weinberg | Source: The Information

SoftBank-backed real estate brokerage Compass priced its shares between $23 and $26 Tuesday ahead of an initial public offering, implying a roughly $10 billion valuation.

The pricing would imply a win for SoftBank’s Vision Fund, which has poured about $1 billion into Compass over the last few years. Its stake is now worth more than $3 billion.

The pricing also shows that the company expects more investor demand for real estate-focused stocks, as tech firms like such as Opendoor, Redfin and Zillow have far outperformed the market recently. Compass was last valued at $6.5 billion in 2019, according to PitchBook.

The company recorded strong revenue growth last year, particularly in the second half as low interest rates buoyed the housing market. But it still has has a long road to profits. The company showed a $270 million net loss last year.

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