Shopify gets ready to trade

May 21: The tech company has raised more than $130 million. Plus, a Petrobras skeleton, Wall Street's short memory, and going "management free."

MORNING-PLAYBOOK-STORYIt’s time for a little Canadian tech news today, as Ottawa-based Shopify gets ready to trade on the NYSE and the TSX, after raising more than $130 million in their public offering yesterday.

Meanwhile, today is all about the minutes from the latest U.S. Fed meeting, and jobs. Yesterday’s minutes from the U.S.’s latest monetary policy meeting showed Fed Reserve officials had ruled out a June rate hike, which was initially predicted when 2015 began with a surge of optimism. Now, analysts have been predicting the hike could come in the autumn, or even later, but the Fed is still waiting for signs that the labour market has truly strengthened, and the most recent numbers have been unclear. The dollar was down this morning on the news.

Today will bring weekly jobs numbers for the U.S. (initial and continuing claims), which could add more weight to this delay, as well as March’s Employment Insurance numbers for Canada. Elsewhere, this morning has brought surprisingly strong retail numbers for the U.K., and steady manufacturing numbers for the eurozone, at 53.4 (50 separates growth from contraction for PMI.) The Bank of Japan’s two-day monetary policy meeting also begins today.

Meanwhile, the corruption scandal over the Brazilian state oil company is reaching new heights as the country’s congress said they would exhume the body of a key player in the scandal, on suspicions he had faked his own death. The politician is said to have died five years ago from heart disease.

In B.C., the provincial government signed a deal with Pacific Northwest LNG over plans for a liquefied natural gas plant on the northwest coast, which is backed by the Malaysian state oil company. The deal would still need to pass through the legislature, and has been denied Aboriginal consent by the Lax Kw’alaams.

Today is also my last day with the Playbook! It’s a sad day indeed, so let me wrap up with (one of) my  favourite topics, given that bad bankers and ridiculous tech-lingo will be covered below. Today, the fate of Greece will (once again) be discussed at the latest EU meeting in Riga, Latvia, but hopes for a sudden resolution are not high. Early next month, the country faces another debt payment of over 300 million euros, to the IMF, and the government has already said that without the EU releasing bailout funds, they cannot pay. 

Shopify shares start trading today. The Ottawa-based tech company, which makes online stores for businesses, will begin trading in both New York and Toronto today. Yesterday, the company raised more than $130 million in shares, which were substantially oversubscribed and more highly priced than the company initially indicated. Shares went for $17 a pop, valuing the company at about $1.26 billion. It was a good day for one of Canada’s bright tech stars, which began in Ottawa after its German-born founder needed a place to sell snowboards online, and ended up marketing the software for the online shop he created. The Globe has this guide to what you should know about the company, which has seen rapid revenue growth, with retailers in 150 countries and an expansion to providing software for physical stores as well as digital ones, but the company is still losing money. Are there more Canadian tech IPOs to come? Perhaps – Shopify has been repeatedly touted as the front-runner in a bustling group of Canadian tech companies, and 2015 has been called the year of the tech public offering.

Wall Street’s short memory. It is impossible to write about finance or business any day of the week, even seven years after the crisis exploded, without writing in the shadow of the financial crisis. When we talk about ultra-low interest rates, when we talk about quantitative easing, when we talk about mortgage prices or debt or sluggish recovery or fines and regulations for banks: it’s impossible, or at least it should be, to forget the lessons and the legacy of the global financial implosion. Unless, that is, you’re on Wall Street, or so Jason Kirby’s latest column in Maclean’s argues. The S&P 500 hit another record high this week, and Kirby racks up the results of a study showing bankers and traders may not have acquired a uniformly robust moral compass in the years since. (The Upshot breaks down more of the data on Wall Street’s rebound here.) Today’s news brings even more arguments to the table, as six banks settle for $5.6 billion in fines from regulators over the Libor scandal, in which foreign exchange traders at multiple international banks in London allegedly colluded over chat rooms to rig the set rate for a crucial interbank exchange rate (known as the Libor). One particular chat from a Barclays trader included this rallying call: “If you aint cheating, you aint trying.” It’s not the only market that was rigged – the interest-rate ISDAfix was also manipulated. Let’s take a moment and recall that this scandal happened after the financial crisis – from 2007 up to 2013, officially – when the horrendous fallout of bad behaviour was supposed to have made things like wanton rigging of major currency markets passé, or at least very clearly illegal. Meanwhile, even as global banks have faced stress tests and capital requirements from regulators in the major economies (including the U.S.), the head of the Senate banking committee in the United States has proposed easing the Dodd-Frank regulations on banks enacted in 2008, which would free several smaller banks from these regulatory restrictions. Conveniently, this particular senator has close links to a lobbyist for one of the banks that would benefit. In London, HSBC, one of the world’s largest banks (and recently subjected to investigations into allegations they helped clients avoid taxes using Swiss bank accounts) said banking regulation had become so onerous it would consider leaving the U.K.

The bumpy road to getting rid of the boss. When you think about a company without bosses, do you see a heavenly workplace, full of communication, independence, and personal growth? Or do you envision a fiery hell of disorganization and never-ending meetings? The no-boss method, called “holacracy” in tech-world lingo (or a “commune” in everyone else’s), is being taken up by companies, with mixed results: at the online retailer Zappos, which is owned by Amazon, more than 200 employees have left since the experiment began, and even supporters say there are a lot of bumps in the road, as managers are eliminated and replaced with self-governing “circles.” One of those bumps includes a whole different language, which comes with a laminated glossary and an excessive need for translation into normal human speech. (I would compare even the brief samplings in this WSJ story to corporate gobbledegook, on steroids.) On the other hand, the idea of non-hierarchical companies and organizations isn’t such a radical one: in Scandinavia, “flat” management and communal-style working has been standard for years. The challenge – or perhaps, the opportunity – here might be what happens when the classic Nordic style of low-key communalism meets the surrealist comedy of Silicon Valley.

Need to know: 
TSX: 15,072.83 (-48.19), Wednesday
Loonie: 81.99 (-0.24), Wednesday
Oil (WTI): $59.66, Thursday (7:50 a.m.)

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