Spotify IPO Watch: Dealmaking Down, UK Rates Unchanged

We think that a Spotify IPO will require very frothy market conditions.  Indicators will be higher oil prices (currently low), steady interest rates (currently under upward pressure in the US), high levels of “deals” (collapsing), and higher valuation for tech stocks (currently crashing led by Apple).

The Spotify IPO Watch Signal for May 2015 is RED–no IPO in the next six months and increased risk of Spotify defaulting on its $1 billion of convertible debt.


Of the $5 trillion in transactions that were announced in 2015, almost 10 percent — $504 billion — have since been terminated. Wednesday was especially bad for bankers as two mergers valued at a combined $21 billion collapsed.

The latest cancelled deals mean 2015 has been stripped of its title as the biggest year for dealmaking, dropping to $4.06 trillion compared with 2007’s $4.09 trillion.

The companies and their bankers can blame themselves for some of the failures, said Ira Gorsky, an analyst with Jersey City, New Jersey-based Elevation LLC. Deals have grown so large, and in already consolidated industries, as to provoke the wrath of aggressive antitrust enforcers.

Read it on Bloomberg: Wall Street’s Dealmaking Goes From Boom to Bust in a Few Months

The Bank of England warned Thursday of big risks to Britain’s economy should voters opt in a June referendum to leave the European Union — a stark assessment from an institution known for being independent of political campaigns.

Members of the Monetary Policy committee said in a statement after deciding to keep interest rates on hold that a vote to leave the EU could prompt households and firms to delay spending, lowering demand for labor and causing unemployment to rise.

Read it on New York Times: Bank of England Warns About Risks of Exit From E.U.