Matein Khalid
I was sure the Medline IPO would be a winner since I have tracked this business since it was acquired in a $30 billion leveraged buyout by Blackstone, Carlyle and the San Fran private equity house Hellman & Friedman after the bankers priced the deal at 29, I even wrote a post several hours before the New York open, reiterating that the largest private equity incubated IPO of 2025 was worth a pop.
I calculated that MDLN would be midwifed by its syndicate and start its life as a public company at 33-$34. I was dead wrong MDLN opened at a 20% premium or $35 and rose a stellar 21% for a total first day return of 41%, something which has become unthinkable in GCC IPOs now that Brent crashed to $58. In fact, I note the terrible post IPO performance of Lulu and Talabat, both billion dollar private sector jumbo IPOs that were supposed to be a blue chip play on the UAE’s fabulous non-oil growth rate and consumer expansion. This simply did not happen. No wonder Dubizzle pulled its IPO or it would have been forced to change its name to Dufizzle IPO as it would have been another candidate to lose money for its investors.
In Saudi Arabia, the IPO scene is a disaster, several deals have had negative first day openings and even PIF financed privatization deals are now getting pulled and merchant family deals are kryptonite as Brent falls to J.P. Morgan’s target price of $30 a barrel, the Tadawul could easily lose another 20% since its EPS estimate for 2026 is a mere 2%.
Global investors only scramble to buy GCC equities when the dollar is rising but not when the dollar is tanking as is happening now. This is the reason why Tadawul fell 12% amid a spectacular bull market in emerging market equities. Any reader of mine would have benefited from our 3X trade in Argentine equities (symbol ARGT), the 45% profit in the Polish country tracker (PLN) and 30% odd return in iShares Brazil which Manju and I trade multiple times every week against our portfolio of actively managed stocks in both Sao Paulo and Brazilian ADRs listed on the NYSE, where the digital bank Nu Holdings has been a license to print money since I discovered its charms in a conversation with a Rio VC when NU traded at $11.
The icing on the cake is that Nu offers very liquid listed options on Chicago’s CBOE, which has enabled me to hugely amplify my net profit on the position as it rose from 11-17. I cannot generate extra income via covered call strategies on any GCC IPO on a credible/liquid exchange like the NYSE, London or Singapore. This is routine in the world now and GCC equities cannot hope to attract hedge funds without offering first generation risk insurance and hedging products like exchange traded options.
Saudi Arabia equities are way too expensive at 15X and I no longer want to play Russian roulette on any exchange where the smart money funds I follow are exiting and not accumulating. So, my strategy is to focus on IPOs in Poland, Latin American, Southeast Asia and the occasional 8% high div privatization IPO in Oman. Since the Sultanate can be very generous to foreign investors in the right deal priced at the right moment.
Kuwait is an old-new love for me, like a girlfriend rediscovered in old age after a span of 35 years. After all, as a young Chase Manhattan banker from New York, I was staying in the SAS Hotel in Kuwait City, a month before Saddam’s tanks rolled down the seafront Corniche to Dasman Palace to murder a very great Arab prince HH Sheikh Fahad Al Ahmed Al Sabah (RIP), whom I had first seen on the soccer field in FIFA Barcelona so long ago.
Economic reforms could mean some hot deals in Kuwait. So vastanomics will be my strategy to invest in Kuwaiti IPOs when a EM becomes hot macro play, all I can see is: yum yum, gimme some LOL.
As for Medline, the first day flippers will be selling as the free float is quite narrow and I think it at $36 early next year as the AI trade unravels on Nasdaq. At 35-36, this IPO again becomes a no brainer for me.
Also published on Medium.
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