Prof G Markets: Arm’s IPO, Instacart’s Valuation, and Salesforce’s Year of Efficiency
Sep 11, 2023
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Ed Elson, a PropG Media Analyst, joins the discussion to dig into the implications of Arm’s IPO and what it means for Softbank. They explore Instacart's fluctuating valuation as it prepares for its market debut, highlighting its unique business model. The conversation also covers Salesforce's efforts to boost profitability and the shifting advertising landscape, especially in light of Amazon's success. Their insights reflect broader trends in tech investments and media strategies, making for a captivating analysis of today’s financial climate.
Salesforce's Q2 earnings report showed a remarkable growth in net income due to cost-cutting measures and improved profitability.
Instacart's valuation for its IPO has dropped significantly, reflecting the company's focus on prioritizing profitability and financial sustainability.
Deep dives
Salesforce reports significant increase in net income
Salesforce's Q2 earnings report showed a near 20-fold increase in quarterly net income, rising from $68 million to $1.3 billion. The company also reported a 31.6% operating margin and raised its annual margin guidance to 30%. This remarkable growth in net income has been attributed to the company's efforts to cut costs and improve profitability.
Instacart's valuation journey takes a hit
Instacart, a popular grocery delivery platform, is preparing for its IPO. However, its journey to the public markets has seen a significant drop in valuation. After being valued at $39 billion in 2021, the latest estimates suggest that Instacart's valuation for the IPO will be around $15 billion. This substantial reduction reflects the need for the company to prioritize profitability and financial sustainability.
ARM prepares for IPO with $52 billion target valuation
ARM, a British chip maker specializing in smartphone processor designs, is gearing up for its IPO with a target valuation of $52 billion. The company counts Apple, Google, Nvidia, and Samsung among its clients. Despite the challenging market conditions for chip manufacturing, ARM's strong position in the industry and its partnerships with major tech companies has generated significant investor interest.
Consolidation predicted in the cable TV industry
The cable TV industry is expected to undergo consolidation as companies like Viacom, Time Warner, and Disney reassess their assets. These companies are likely to shed their cable TV assets or consider selling them to streamline their portfolios and focus on streaming platforms. The decline in cable TV viewership and the rise of streaming services have created the need for adaptation and a shift in business strategies.
This week on Prof G Markets, Scott shares his thoughts on Arm’s imminent IPO and what it will mean for the company’s largest shareholder, Softbank. He then takes a look at Instacart’s business model and valuation as it waits in the wings to go public as well. Finally, Scott discusses the biggest learnings from Salesforce’s latest earnings.