WorldWideMarkets this week: the Soccer World Cup kicks off Thursday — what will be the winning stocks? I’ve got some ideas there. Mega IPOs — we now have three. And Alphabet crashes the party.

I’m Simon Brown. This is WorldWideMarkets, episode 681 for 10 June, recorded early Tuesday afternoon. WorldWideMarkets is powered by Standard Bank Global Markets Retail and Shyft, the global money app that puts travel, shopping, payments and investments in the palm of your hand. Enjoy the cheapest forex rates anytime, anywhere — Shyft, powered by Standard Bank. Thanks to Standard Bank, thanks to Shyft.

Three mega IPOs: SpaceX, Anthropic & OpenAI

Let’s start with those IPOs. We’ve got SpaceX coming on Friday at $135. The share code is SPCX. You’ll be able to buy it on Shyft, and get CFDs on it on Web Trader, from the US open — 3:30 Friday afternoon. It’ll probably pop on the open; we’ll see how it goes.

It’s unusual that they’re doing $135 as a fixed price — take it or leave it. Usually there’s an auction dynamic: the company says it wants $140, the market says $132, and they settle somewhere in between. Here it’s $135, flat. That’s the big story. It’ll be about $1.75 to $1.8 trillion at that share price, and it’ll probably trade above $2 trillion during the course of the day as it pops. So it is going to be huge. Saudi Aramco was about $1.6 to $1.7 trillion — but getting excited about oil from the Middle East is a hard sell. This is a much more exciting sell.

But there are things happening. Last week Google said: we’re going to sell $80 billion worth of shares to raise cash, because we’re spending money on data centres — and why borrow when we can issue new shares? Fun fact: Berkshire Hathaway took $10 billion of what ultimately became an $85 billion issue.

I raise this because now we’ve also got SpaceX wanting $75 billion — so that’s $160 billion of cash in a 10-day window. Where does that cash come from? There are record amounts sitting in American cash accounts, deposits and money market funds. But I don’t think a money market investor is rushing into a SpaceX or an Alphabet capital raise — they’re probably more scared of the market. So where does it come from? You have to sell other stuff. Yes, there’s cash on the sidelines, but I think we also have to sell other things — which is why Micron was down 16% on Friday. To be clear, Micron was a 10-bagger over the last year, so 16% down still leaves you very pretty. But there’s been a bit of a sucking sound, and I think that’s what we’re seeing: we need that money. The money will flow into SpaceX, there’ll be sales, and it’ll all shake out. But in the short term, $160 billion of new capital is a lot. Berkshire came with $10 billion and that helped the party — but it’s a lot of cash that isn’t just sitting in somebody’s couch.

So we’ve got those two. Then there’s Anthropic, which filed confidentially for an IPO early last week. With the SEC, you can put in a confidential application — but at some point the documents have to become public, because you can’t IPO without public documents. Anthropic’s latest capital raise was about $1 billion, on revenue of about $40 billion — so maybe around 25 times price-to-sales. By contrast, SpaceX is about 94 times. Then this week — Monday — Bloomberg confirmed that OpenAI has also filed confidential IPO paperwork with the SEC. They’re coming to market too, on a last funding valuation of around $900 billion — a little under a trillion. I don’t know what their profits are; I think it was maybe $10 or $15 billion of revenue. So another chunky price-to-sales — sales, not profits. These are mega, mega IPOs.

To be clear, I like a lot of this. I’ve spoken a lot about SpaceX — I particularly like the space part, and the Starlink part. I do not like xAI, I do not like Twitter/X, and I’ve said before they’re going to buy Tesla within the next year or two — and I don’t like that either. The AI companies I already like; I use them. I’ve got my AI running in the background right now, doing all sorts of things for me. But I don’t know about the investability — we need to see numbers. I think Anthropic is head and shoulders the best. I used to switch between providers every couple of months, but I’ve gone so far down the rabbit hole with Anthropic — with Claude, cowork, the markdown files and all of that. My research content, my disaster-recovery file, the entire thing verbatim, is 191 pages. I’ve gone down a rabbit hole, so I’m not switching. What I do still use is Perplexity, because it lets you flip between providers — handy for fact-checking. But Claude cowork is definitely my preferred right now.

That doesn’t mean it’s a good business model or a good investment case. We’ll only know once we get the information. For now we sit, we wait, and we see — we just don’t have enough information yet. We’ll get more as those IPOs come to market, but we need them to actually come to market first.

Power Hour, 25 June: building an offshore income portfolio

Let’s get to some events. On 25 June we have a Power Hour, looking at getting paid in dollars. Everyone wants to earn dollars — or maybe euros — some hard currency. How do you get that? You could go get a job, but you can also build an offshore income portfolio, and that’s what we’re looking at. Maybe it’s for retirement, maybe it’s just to reinvest. That’s 25 June, Thursday, 5:30pm — in person or webcast. Head to JustOneLap.com/events for more information and bookings.

World Cup stocks: hotels & retail offer no edge

So, World Cup stocks. The World Cup starts Thursday — South Africa versus Mexico, an exact replica of the opening game 16 years ago at FNB Stadium, the Calabash, in 2010. That was a very cold World Cup; we’ll see how this one plays out.

Here’s the thing: how are the stocks going to do? What about some winning stocks — AB InBev, or Shoprite, because we’ll be buying more crisps and snacks? At the margins I can see AB InBev selling a little more beer and Shoprite a few extra packets of chips and biltong, but I don’t think it’ll be material.

I wondered about hotels. So I got my Claude AI to find every stadium where a World Cup match is being played, referenced each on Google Maps, then looked for hotel accommodation within 15 kilometres as the crow flies — so the actual drives might be 20 or 25 kilometres. We then scraped those websites as best we could to check accommodation availability on the day of each match. If a match is today, I looked at availability for last night and tonight — and there’s tons. I saw a stat that of the 104 games out there, something like 84 haven’t sold out. Some of those are England versus Ghana — and Ghana’s great, I loved watching Ghana in 2010 — but anecdotally the hotels are saying this isn’t happening. From the data, there was availability at every single hotel I looked at. Sometimes the only availability is the premium room, but there was availability absolutely everywhere — which means hoteliers just don’t have pricing power.

I then wondered about restaurant chains, but I couldn’t find any that would fundamentally move the dial. Looking at host cities, only about 15% of a chain’s restaurants might be in host cities. Maybe the other cities do some extra trade — you might be in East London enjoying the World Cup even though there’s no game in your town — but I couldn’t get to the data.

The kit play: Adidas & Nike

So where else? What about athleisure — the folks who make the kit? Adidas is the obvious one, and this is important: Adidas has the rights to the kit, the ball and all of that. So surely there’s some pickup there.

Adidas has an ADR in the US, trading on a 21 PE, forward 16. Price-to-book is 4.8 against a mean of 6.4, so it doesn’t look hugely expensive. EV/sales is 1.4 — not a terrifying number. One-year total return is around 20-odd percent, with a dividend yield just over 1% — not thrilling, but the share count is coming down. There are seven holds, sixteen buys and six strong buys; no sells, no strong sells. Here’s the thing: its price is $95. The low analyst estimate is $187, the average $228 and change, the high $308. According to these analysts, this stock is immensely cheap.

So I thought, maybe I’m looking at the wrong listing — the ADR. Let’s look at Adidas as it trades in… Budapest, apparently. Who knew Budapest had a stock market? There it’s trading at 57,000 forint. The low average is 58, the median 70, the high 95 — in other words, still cheap by those accounts. Maybe not as cheap, but cheap. Same PEs. So Adidas actually looks cheap, if nothing else.

I also looked at Nike, which I own — and it’s been a horror. Its one-year return is minus 30%. I was looking at it as a turnaround, with a 3.8% dividend yield, but Nike is doing many things and turning around isn’t one of them. There are analysts out there saying it’s worth $23; the average is $60, the high $120, and it’s currently $43. It has one sell, one strong sell, 20 holds, 14 buys and two strong buys. I’m not impartial — I hold it, and I’m not a happy holder right now — but I do think there’s potential. Surely there’s some turnaround. This is Nike, for goodness’ sake.

Local plays: Canal+, Sun International & Super Group

So those are the two offshore plays: Nike and Adidas. What about local? Fun fact: Canal+ listed last Wednesday — CNP is the code. It’s been trading in the UK, where it’s relatively new, and it’s very new in South Africa. We all complain about DStv charging too much, but I remember almost every big World Cup — particularly soccer — MultiChoice would say: subs up. We’ve got 10 African teams this year, versus the usual five. It was nine, then one qualified through the playoff, beating Jamaica. And Canal+ is across the entire continent. It trades at £2.79, average target 332, high 5, low 2.22, with three holds, two strong buys and five buys. The view has always been that these are banner World Cup soccer years — and across the continent, soccer is huge, far bigger than cricket or rugby. We don’t have a lot of data, but it’s at a discount: EV/sales and price-to-book both below one. Maybe there’s something here.

Except SABC Plus is streaming the games. I’ll tell you on Thursday or Friday how good that free experience is. But there’s a sense of: hang on. In the past I wouldn’t sign up for the Soccer World Cup, but I did sign up DStv for the Rugby World Cup — for six or seven weeks — and then cancelled at the end. If I could’ve got it free, I wouldn’t have done that. So there’s a challenge there.

As I said, I looked at Shoprite and AB InBev, and one other came to mind: betting. What’s going to happen loads of? Betting. Who’s the big listed name? Sun International, locally, and they’re moderately cheap — PE 7.9 against a mean of 29 (a bit skewed; over five years the mean drops to 14, still good). It has a very chunky dividend yield of over 8%, so it’s certainly not expensive. On price targets, two buys, high of 65, low of 59, with the stock at 51.91. The chart’s looking good — that break of 5250/4250 has been significant. I used to own this stock; I don’t anymore, but the chart looks nice and aggressive. Sun International is looking good.

Then there’s the other big gambling name: Super Group — the New York-listed online sports betting business, not the JSE one. Forward PE around 16, dividend yield 3.8%, which isn’t onerous. On price targets: six buys, two strong buys, average 18, low 16, high 22, with the stock currently just under 13.

Is the World Cup going to bring more betting? Surely. And the fact that these operators have made it so easy — betting in the palm of your hand via your smartphone — they’re surely going to see increased revenue, from growth and from the World Cup. I have a fundamental problem with gambling, but if you don’t, Sun International or Super Group might be worth a shout — and maybe Canal+ too, which you can buy in rand or pounds. And of course Adidas and Nike. You can get all of those on Shyft, on the JSE, in the UK or in the US. Nice and simple, some good options. I’m moderately looking forward to the soccer, and I think there are opportunities here — though not necessarily as big as some thought.

Stocks on the move: PGMs look bleak

Some stocks on the move — and things are looking bleak for the PGMs. Let’s start with the PGM miners, because every single one is popping up on the downside. All of them. Here’s platinum — a bleak-looking chart. Here’s palladium — also bleak. I would not be getting excited about the platinum stocks. I think they’re cheap, but we just haven’t seen the white metals hold. Palladium is essentially back in its target range — around 1,200 at the top, 900 at the bottom, 1,050 in the middle.

On the bullish side, we’ve flagged Glencore before as positive to the upside, and it’s been climbing. But the buy was closer to 105 than where we are now, and I can’t get excited about a stock that’s just run higher — though if you like the coal exposure, go check the valuations. On the bearish side: Mondi. It’s going to get kicked out of the MSCI. This is a horror chart, just going down and down — there was a big short at 250, another at 184, and it’s now 160. Bidvest also popped up on my bear list, but there’s not much really happening there.

So it really is the PGM stocks — pick one and expect an ugly chart. Here’s Valterra, breaking lower and looking like it wants to head back to 1,000. Here’s Implats, same story — below 190 and back at support. And Northam Platinum Holdings, also breaking lower. No surprises. What about the recyclers? Maybe something there — not looking too bad. But the problem is the PGMs themselves aren’t looking great, and that’s what’s struggling these miners right now. I’m not sure that changes in a hurry, and right now that’s the key concern.

Close

WorldWideMarkets is powered by Standard Bank Global Markets Retail and Shyft — the global money app that puts travel, shopping, payments and investments in the palm of your hand. Enjoy the cheapest forex rates anytime, anywhere. Shyft, powered by Standard Bank. Thanks to Standard Bank, thanks to Shyft.

Remember: SpaceX, SPCX — they should have just called it Space. SPCX will be trading on Shyft, both equity and CFD, from 3:30 Friday afternoon. They don’t have the IPO allocation, but if you want to get involved, there’s your chance.

I might be in Durban next week — I’m watching the weather; it’s my niece’s birthday — but we’ll do a show anyway. Until next week, my name is Simon. Look after yourself, and if you can, look after somebody else as well. Cheers, all.