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  • Today's business and finance round up 8th September 2022

Today's business and finance round up 8th September 2022

Revolut undergoes major cost review

7th September 2022

Bite-sized business news from the UK and beyond

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Today's stories

  • Revolut undergoes major cost review

  • Porsche plans mega European public market debut 

TECHRevolut undergoes major cost review

What happened?Banking app Revolut is in the middle of a widescale cost cutting program according to the FT. Codenamed ‘Project Prism’ the company has rescinded on some graduate job offers with only a few days notice in a bid to right size its cost base.How did we get here?Last year London-based Revolut raised $800m at a valuation of $33bn making the seven year-old company one of Europe’s most valuable startups. But tech firms have had a torrid 2022 with worsening economic conditions and rising interest rates hammering company valuations in both the private and public markets. In May ‘buy now pay later’ giant Klarna had its valuation cut from $46bn to $7bn in a funding round and announced a wave of job cuts. The tech heavy Nasdaq index has seen its value plunge by 25% this year.Revolut has 20m customers across 36 countries and the UK is its biggest market with nearly 5m accounts. Facing a bleak economic outlook in its home market and abroad, the company is taking action to prepare for what could be a tough few months ahead. That’s not the only problem Revolut is tackling: Earlier this week the audit watchdog highlighted issues with Revolut’s audits and is pushing the company to improve its internal controls for financial reporting.A swathe of senior people have left recently including its UK money laundering reporting officer, UK chief risk officer, UK data protection officer and both UK and global heads of regulatory compliance. 

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CARSPorsche plans mega European public market debut  

What happened?This week Volkswagen Group confirmed its intention to list shares in luxury car brand Porsche in the coming weeks —  if successful the IPO  would be one of the largest in recent European history.How did we get here?Volkswagen owns a suite of carmakers including Volkswagen, Audi, Lamborghini and Bentley. Its plan to take Porsche public could value the brand between $60bn and $85bn.Although just 12.5% of the total Porsche shares will be sold to investors, the listing should raise over $10bn giving Volkswagen more financial firepower to complete the costly transition to electric vehicles.Volkswagen plans to spend close to $90bn over the next five years on electric car development, with the ambitious goal of a quarter of total sales being electric by 2026.The Porsche-Piech family, made up of direct descendants of the founder, will end up owning some 25% of voting shares in the company. They'll be hoping that Porsche shares will race higher as a result of the public listing, just like Ferrari's did in 2015 when the Italian company was spun out from its parent company, Fiat Chrysler.Zooming out: Pulling off an IPO this year would be a huge achievement for Porsche. The war in Ukraine, rising inflation and growing concerns of a recession has made 2022 a turbulent year for stock markets. Many companies have canned their plans to go public amidst the turmoil. In the first six months of this year there has been just 57 IPOs in Europe, down from 231 in the same period in 2021.

Stat of the day

25m people tuned in to the premiere of Amazon Prime’s The Lord of the Rings: The Rings of Power last week, making it the biggest debut in the streaming platform’s history

Interesting links from around the web

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