☕️ Blame game

Good morning.

DigiCo REIT’s $2 billion IPO—2024’s biggest—is looking very wobbly, with shares down 14% to $4.30 each in the first two days of trading.

Brokers pinned the blame on “instant gratification” investors dumping stock after day-one gains failed to materialise. But Morningstar’s pre-IPO call of $3.40 per share is now feeling prophetic, with analysts slamming DigiCo’s assets as overhyped plays in a crowded, cyclical sector.

HMC’s David Di Pilla insists fundamentals are solid, telling the AFR, “this company will deliver in the future.” But sceptics are pointing to its scale problem in chasing hyperscalers as the data centre cycle heads its peak.

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Market movers

Shares in HMC Capital —DigiCo REIT’s founder, sub-underwriter and largest shareholder—didn’t escape the carnage yesterday, tumbling as investor confidence in the year’s largest IPO valuation and growth prospects waned.

The quick sync

• Ubank CEO Philippa Watson reflects on the 86 400 merger, customer migration challenges, and NAB's backing for Ubank as its youth-focused growth engine. (Capital Brief)

• The original rogue trader Nick Leeson warns 30 years after Barings' collapse that banks like Macquarie still fail to prioritise compliance, leaving markets vulnerable to rogue trading. (Bloomberg)

• Superhero pivots from share trading to superannuation, scaling a $1.7b fund portfolio while targeting long-term growth in Australia’s wealth market. (Capital Brief)

• Seer Medical’s co-founder battles Breakthrough Victoria in court over claims of coercion tied to withheld funding and job termination, spotlighting debates on public startup investments.(Capital Brief)

• CBA’s ill-timed $3 branch fee nearly blew up the bank’s political capital, sparking public fury, political backlash and a six-month policy pause. (AFR)

• NeurIPS 2024 draws 16,000 attendees, with AI breakthroughs, corporate fanfare and delayed start to avoid Taylor Swift's concert crowds. (Reuters)

Trading floor

M&A

• Honeywell considers aerospace spinoff after Elliott's $5bn stake and breakup push. (Capital Brief)

• ABC to receive a $126m boost and secure long-term funding agreements. (AFR)

• EY is selling its data centre infrastructure business, Computer Room Solutions. (AFR)

• ANZ is considering buying back its merchant acquiring business from Worldline. (Capital Brief)

• IGO acquires majority stake in Yeneena copper project. (Capital Brief)

• Tanarra Capital backs Bain Capital’s Insignia Financial bid, holding a crucial 14% stake. (The Australian)

• MCG Healthcare acquires TaylorCare Recruitment to boost its growth in Australia. (BNA)

• Brookfield is in advanced talks to acquire a minority stake in Loscam's Asia-Pacific division. (AFR)

• Fortitudo Group increases its stake in Eumundi Group and raises the takeover price. (BNA)

• Benzina Zero partners with Beam Global to tap into the $61bn e-mobility market. (BNA)

Capital Markets

• Stephen Jones excluded TikTok and Meta in talks before finalizing Labor’s tech levy. (Capital Brief)

• Rockpool’s parent, Pacific Hunter, posts $288m loss amid debt and closures. (AFR)

• Brookfield reconsiders Healthscope investment as debt covenant breach looms in March. (The Australian)

• SoftBank CEO Masayoshi Son pledges a US$100bn investment in the US over the next four years. (Capital Brief)

• Investors sue Arcadium Lithium's board over undervaluation in $6.7bn sale to Rio Tinto. (AFR)

• Cleanaway shares fall amid ACCC scrutiny of Citywide Waste acquisition. (Capital Brief)

• Brokers disappointed by DigiCo IPO failure, while Virgin Australia listing gains momentum. (The Australian)

• ASIC is suing HSBC Australia for failing to prevent and detect scam activity. (Capital Brief)

• Arbor Capital invests in Networks X, a homegrown research firm. (AFR)

• Independent publishers support Labor's tech levy but worry about fair distribution of funds, while Microsoft remains silent. (Capital Brief)

• A US court rejected TikTok's request to delay a ban, despite concerns about free speech and national security. (Capital Brief)

• AUSTRAC sues Entain over anti-money laundering violations involving Ladbrokes and Neds. (AFR)

• Databricks raises billions to fund AI and employee stock buybacks. (Capital Brief)

VC

• Precision Neuroscience secures $102m funding to challenge Elon Musk’s Neuralink in the race to develop thought-controlled brain-computer devices. (FT)

• UNSW Sydney partners with OpenAI to use ChatGPT for research and education. (Capital Brief)

• BubbaDesk partners with WOTSO to expand its childcare services to co-working spaces. (BNA)

People moves

• Chrystia Freeland resigns after economic policy clash with Trudeau ahead of election. (Capital Brief)

• Commonwealth Bank's government relations executive, Euan Robertson, is joining Blackstone. (AFR)

• Francyne Mu to exit Franklin Templeton's $886m global growth fund in January. (AFR)

• Star Entertainment's stock surged after its Gold Coast CEO, Mark Mackay, resigned abruptly amid regulatory pressures (Capital Brief)

• Ousted CFMEU officials still control a $7m trust fund. (AFR)

• Treasurer Jim Chalmers has announced new Reserve Bank board appointees, including business leaders and academics, to strengthen monetary policy and governance. (Capital Brief)

• Ben Scott, a founding partner at Barrenjoey, has left the firm. (AFR)

• Inghams CEO Andrew Reeves to retire, to be replaced by Edward Alexander. (Capital Brief)

• Snap names Ryan Ferguson as the new Australia and NZ head. (Capital Brief)

• Chinese businessman Tengbo Yang, linked to Prince Andrew and UK firms like GSK and McLaren, named as an alleged spy after a judge lifted his anonymity. (FT)

The watercooler