MC Insider: Consumer tech reality check, an over-sized pill, finfluencer faceoff, axe on recovery agents, and more

It’s ironic. In 2021 and 2022, when the tech frenzy was still playing out, investors were stampeding to get allocation in new age tech company IPOs even when there was no sight of profit and valuations were absurd. Now, valuations have come down and profitability seems to be emerging, but there are only fewer takers. Recently, a new age tech company caught a hedge fund manager's eye. From 'a kid in a candy shop', the top boss is now becoming 'more focused', believes this fund manager. Any risk taken by this firm is actually on someone else's book, so what's not to like? But, is he buying the stock? Not yet. The stock can fall more, he reckons, maybe then!.

If it is too good to be true, it better be ignored. Investors who have lived by this rule have saved pots of money avoiding stocks that have promised the moon and not delivered. This time, a pharma company not just faced investor apathy but outright rejection of its too-good-to-be-true order. Earlier this year, the company made a disclosure on the exchange that it bagged orders worth several times its market capitalization. Since then, the stock has slipped and the buzz on the street is that the dealers are a disappointed lot. "They should have disclosed how a small company plans to execute such a large order," tells a disappointed dealer. Dealer disappointment may be understandable, but it will be interesting to see if the management indeed has an execution plans in the coming days and months.

There seems to be more than a glimmer of potential stake sale action brewing in the gems and jewellery space folks. On one hand, there are whispers that a prominent investor is looking to dilute stake in a south based player and on the other hand , we are hearing that a parent firm, which made an entry by giving an exit to a leading VC, is now mulling the purchase of more stake in another fast-growing player.

Meanwhile on the sarkari front , we hear investors are getting increasingly jittery and impatient regarding a proposed value unlocking exercise linked to this player in the defence and machinery space which is yet to take off. The carved-out land biz of this firm was supposed to get listed 3-4 months back but is still pending. Wonder what's causing the delay ? Could it be the market conditions ?

An auto major recently sold a block in an auto ancillary at a significant discount to the market price. Analysts were trying to figure out why and there are two theories that were offered as potential answers. One, the auto ancillary had sold one of its overseas operations and the market had rewarded that with higher prices. But, institutional investors weren’t convinced till the earnings growth came through. Therefore, they were unwilling to buy at the market price. Another theory is about the auto major, that it made a capital loss from sale of another asset and wanted to book capital gains on this asset to utilise the loss and minimise tax before the closing of the March quarter.

There were gunshots heard in fintwit this week. One finfluencer was miffed with another for sharing a video that called the first a scam. In retaliation, we heard, that the first finfluencer hosted a strange session of Twitter Spaces. In the session, we heard, a song with the second finfluencer’s name was played and it abruptly stopped at a gunshot. Then, in true horror movie style, the session played a jokey jingle about being caught out on naughtiness. It would be silly if the first finfluencer didn’t have a reputation of being an absconding criminal.

The company, a well known name in the lending business, recently faced a raft of allegations on social media about the way it's recovery agents harass people in connection with loan defaults. Logically, the development attracted attention of journalists who jumped on to the story and reached out to the company for comments. Since then, the firm has deployed a PR army to ring up journos to convince them why it isn't a story and hence why they should 'drop' it. The management, we hear, doesn't want the bad press. That's understandable. In the mean time, the firm has quietly taken action against the alleged recovery agents, we hear. So there was some meat in the story after all, isn't it?

This startup has been in the eye of the storm lately. But, the worst may be yet to come. Buzz is that its founder has apparently taken humungous loans against shares and the rising interest rate regime has meant that the borrowing cost is trending to high double digits. A little birdie says that the unicorn's repeated efforts at securing equity funding may have failed because it can't afford a downround. If a sizeable downround happens, it could break key valuation covenants and invite lenders to seize shares. Hmmm...