What would Biden mean for tech stocks?

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Hello! This week: What a Biden win might mean for tech stocks, a startup wants SaaS companies to securitize their subscriptions, and Ackman's SPAC plans.
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No one quite knows what sparked Thursday's dramatic tech selloff.
But one thing that could've played a part: new polls published Thursday that suggest Biden still has a healthy lead in the election race, after weeks of it seeming increasingly likely that Trump would win.
Biden could pose a threat to the tech industry, according to analysts I've spoken to this week. And investors might be starting to get a little spooked.
"If Biden gets control of both the House of Representatives and the Senate, that could potentially be the most bearish outcome for U.S. equities, at least in the long run," Schroders' Sean Markowicz told me. That's because of his proposed tax changes, which could reduce tech companies' earnings-per-share by more than 6%. Others agree: AGF's Greg Valliere said a Biden win "would be a net negative, in my opinion, because of the tax threat."
Valliere and Markowicz were split on the other big Biden threat: antitrust action. Markowicz pointed to the increased likelihood of antitrust scrutiny under a Biden presidency, saying that could have more of an impact on long-term profits than a tax hike. Valliere disagreed, saying the process "would be pretty glacial, so I don't worry that much for the industry."
But the Senate majority will be pivotal in deciding the impact Biden would have. "If [Biden] loses the Senate to the Republicans, then obviously any of that tax legislation is unlikely to pass," Markowicz explained. Valliere agreed: "If Mitch McConnell hangs on by one seat, I think that would greatly diminish the risk to the industry."
Whoever wins, one thing is almost certain: uncertainty. "It's definitely going to be a very tumultuous few weeks around November," as Markowicz put it. It looks increasingly likely that we won't get final results on election night, and there could be uncertainty for months, especially if Trump challenges the result.
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It's not often that an entirely new asset class comes along — but financing fintech Pipe thinks it's come up with one. The company lets SaaS businesses sell their customers' subscriptions to external investors, effectively offering a way to securitize recurring revenue, providing companies with a new way to raise money that doesn't involve selling equity or taking on debt.
People have talked about something like this for a while, but Pipe seems to be the first startup to actually do it. Founder and CEO Harry Hurst told me that he's not sure why no one else beat Pipe to it, but he's grateful that they didn't.
According to Hurst, the discount companies take when using Pipe is significantly less than the roughly 20% discount they'd normally offer customers to pay annually rather than monthly — and it comes without sacrificing the top-line revenue on which valuations are based.
For investors, Pipe operates in a sort of robo-adviser capacity. Investors set the amount they're willing to buy at different risk tolerances, and when those subscriptions appear on the platform, they're assigned to those investors. That allows for much faster subscription-selling, but it means investors are very reliant on Pipe's risk assessment abilities. For now, though, they seem to be fine with that.
We're still in the very early stages of this model: Hurst said that part of the challenge for Pipe is educating people about this new asset class, and given the prior chatter, it seems Pipe won't be alone in doing it for very long.
Stronger care … from anywhere, to anywhere
A strong healthcare system can scale to meet increasing patient demands. At Philips, we're charting a new way forward by moving care beyond the hospital's walls with advanced virtual health capabilities that expand clinical reach and increase care team capacity.
Thoughts/feedback/tips? Email me — shakeel@protocol.com — or tips@protocol.com. And subscribe to get Index in your inbox every week. Thanks for reading — have a great weekend, and see you next week.