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Could it be that Wall Street has a soft spot for refurbished internet brands? Bending Spoons, the Italian company whose stated mission is buying and overhauling left-for-dead digital businesses—such as AOL, Evernote and Vimeo—got a 40% pop on its first day as a public company on Wednesday. It was a much more impressive debut than the 4% pop scored by the other company going public on Wednesday, scooter rental firm Lime.
Both debuts, coming after SpaceX’s spectacular IPO, should reassure other companies looking to go public—including Anthropic and OpenAI—that the IPO market is well and truly open. Of course, the first day doesn’t tell us much: We’d bet Lime stock will sink in the next few days. Renting out scooters and ebikes is a tough business, given the need to spend on replacing and maintaining scooters and ebikes, relatively low margins, fierce competition and intense regulations. Ick.
Lime CEO Wayne Ting did his best to highlight Lime’s advantages, telling our reporter Julia Hornstein that AI won’t hurt Lime’s business. And while some companies are excited about “making a positive impact on Mars…I’m excited we are tackling real urban issues on Earth.” We’re not sure that will work out, but he makes a good point!
Meanwhile, the demand for Bending Spoons’ stock—it had also priced its IPO above its preliminary range—was surprising given that buying tired brands and sprucing them up doesn’t seem like a classic tech growth story. But it may be a sign that—at a time when the future of many software firms is uncertain and big tech names are burning the GDP of a small country to become leaders in AI—Bending Spoons’ differentiated business model has some appeal.
Backers include longtime investor Baillie Gifford, one of the biggest shareholders outside the founders. Peter Singlehurst, the firm’s head of private companies, told me that with acquisitions like Evernote, Bending Spoons had demonstrated the ability to cut costs and run businesses more effectively. A similar approach at newly acquired AOL could boost its profits, which Singlehurst argued is more important than growing revenue. In other words, if Bending Spoons can generate its target return on an acquisition like AOL, it doesn’t matter that the business has a finite life.
We understand the logic but we’ll see how this plays out over time.
Meta’s Cloud Aspirations
Meta Platforms may be inching closer to competing with cloud firms, by renting out some of its AI data center capacity. Bloomberg reported on Wednesday that the company was “developing plans” for such a business.
It’s hard to tell how seriously to interpret the report. Meta CEO Mark Zuckerberg has indicated several times that renting out spare capacity—as Elon Musk’s SpaceX has done—was an option. As recently as the shareholder meeting in May, Zuckerberg said the idea was “definitely on the table,” although he’s acknowledged it as far back as last fall.
Investors certainly like the idea—Meta’s depressed stock jumped 8.8%. They have been wondering how Meta would get a return from its heavy AI investment. Renting out capacity would be ideal! But don’t bet on Meta going into the cloud business in a permanent way. Zuckerberg’s comments suggest this could be an option only while its internal capacity demand—driven by consumers using its AI, for instance—is catching up with the cloud capacity it has already built.
In Other News
• Microsoft is planning to lay off thousands of employees across the company in the coming week, including in sales and engineering units, according to someone briefed on the plans. The layoffs will also include job cuts across Microsoft’s Xbox gaming organization that have been previously reported.
• 8VC, the venture firm run by Palantir co-founder Joe Lonsdale, raised a $1.5 billion fund—the firm’s seventh and largest—aimed at investing in manufacturing, defense tech and healthcare, Lonsdale announced in a post on X.
• Anthropic is backtracking spyware it rolled out covertly to track users’ locations and whether they are based in China or affiliated with Chinese AI labs, after the move sparked controversies on social media.
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