packed concert schedule, selling tickets to people who may have already binge-watched all of “Below Deck.” The second, however, suggests that people aren’t as eager to get back to huffing and puffing at the gym as they are content to exercise at home. As restrictions lift and people feel safer in crowds, drinking and dancing appear to be higher priorities.

new book, “Noise: A Flaw in Human Judgment,” the Princeton psychology professor and Nobel laureate Daniel Kahneman, along with co-authors Olivier Sibony and Cass Sunstein, argue that these inconsistencies have enormous and avoidable consequences. Kahneman spoke to DealBook about how to hone judgment and reduce noise.

DealBook: What is “noise” in this context?

Kahneman: It’s unwanted and unpredictable variability in judgments about the same situations. Some decisions and solutions are better than others and there are situations where everyone should be aiming at the same target.

Can you give some examples?

A basic example is the criminal justice system, which is essentially a machine for producing sentences for people convicted of crimes. The punishments should not be too different for the same crime yet sentencing turns out to depend on the judge and their mood and characteristics. Similarly, doctors looking at the same X-ray should not be reaching completely different conclusions.

How do individuals or institutions detect this noise?

You detect noise in a set of measurements and can run an experiment. Present underwriters with the same policy to evaluate and see what they say. You don’t want a price so high that you don’t get the business or one so low that it represents a risk. Noise costs institutions. One underwriter’s decision about one policy will not tell you about variability. But many underwriters’ decisions about the same cases will reveal noise.

WSJ)

  • An arm of Goldman Sachs has raised $3 billion from clients to invest in later-stage start-ups. (WSJ)

  • SPACs have raised $100 billion this year through May 19, a record, but new fund listings dropped sharply last month. (Insider)

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    Oatly Stock Price Jumps in Trading Debut

    Shares of Oatly soared 30 percent on Thursday as investors jumped at the chance to take part in rapid changes in the food industry driven by consumer tastes shifting to plant-based products.

    The company, which makes an alternative to dairy milk based on oats, priced its initial public offering Wednesday night on the high end of its range, giving the company a value of about $10 billion. Shares were priced at $17 and began trading at $22.12 on the Nasdaq under the ticker “OTLY.”

    The offering comes as money is flooding into the food tech space, with investors eager to catch a ride on the next Beyond Meat — the vegan food company valued at about $6.6 billion by public investors. And investors have put a heightened focus on companies like Oatly that say they meet environmental, social and governance standards.

    “Long term, it’s an opportunity for us to create a fantastic shareholder base,” Oatly’s chief executive, Toni Petersson, said of the offering. “So E.S.G. was definitely a huge, huge part of it — so we’re excited, we’re really excited, about the outcome here.”

    complained about Oatly’s marketing around its use of sugar. But Oatly has no plans to address its sugar content.

    “We’re just replicating what nature does before it enters your stomach,” Mr. Petersson said in describing the process of making oatmilk.

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    Oatly, a Maker of Oat Milk, Is About to Have Its IPO

    Private equity has a place at the table, and so do Oprah and Jay-Z. Food giants like Nestlé are scrambling to get a foot in the door. There are implications for the climate. There are even geopolitical rumblings.

    The unlikely focus of this excitement is Oatly, producer of a milk substitute made from oats that can be poured on cereal or foamed for a cappuccino. Oatly, a Swedish company, will sell shares to the public for the first time this week in an offering that could value it at $10 billion and exemplify the changes in consumer preferences that are reshaping the food business.

    It’s no longer enough for food to taste good and be healthy. More people want to make sure that their ketchup, cookies or mac and cheese are not helping to melt the polar ice caps. Food production is a leading contributor to climate change, especially when animals are involved. (Cows belch methane, a potent greenhouse gas.) Milk substitutes made from soybeans, cashews, almonds, hazelnuts, hemp, rice and oats have proliferated in response to soaring demand.

    “We have a bold vision for a food system that’s better for people and the planet,” Oatly declared in its prospectus for the offering. The company’s shares are expected to start trading in New York on May 20.

    Stephen A. Schwarzman, Blackstone’s chief executive, was a steadfast supporter of former President Donald J. Trump, who has maintained that climate change is a hoax.

    Blackstone’s backing also helped lend Oatly credibility on Wall Street. And there was no sign that Blackstone’s involvement slowed Oatly sales, which doubled last year.

    Oatly’s image benefited from a roster of celebrity investors, including Oprah Winfrey, Natalie Portman, Jay-Z’s Roc Nation company, and Howard Schultz, the former chief executive of Starbucks. All have some connection to the plant-based or healthy living movement.

    Oatly declined to comment, citing regulations that restrict public statements ahead of an initial public offering.

    Oat milk is part of a larger trend toward food that mimics animal products. So-called food tech companies like Beyond Meat have raised a little more than $18 billion in venture funding, according to PitchBook, which tracks the industry. Plant-based dairy, which in the United States includes brands like Ripple (made from peas) and Moalla (bananas), raised $640 million last year, more than double the amount raised a year earlier.

    In the United States, milk substitutes like oat milk and rice milk make up a $2.5 billion industry that is expected to grow to $3.6 billion by 2025, according to Euromonitor. Globally, the $9.5 billion industry is expected to grow to $11 billion.

    Once a niche market, alternate milk has become as American as baseball. A frozen version of Oatly that mimics soft-serve ice cream is being sold this season at Yankee Stadium, Wrigley Field in Chicago and Globe Life Field in Arlington, Texas, where the Rangers play.

    China Resources, a state-owned conglomerate with vast holdings in cement, power generation, coal mining, beer, retailing and many other industries. The new financing helped Oatly to expand in Europe and begin exporting to the United States and China, where many people cannot tolerate cow’s milk. China Resources’ involvement undoubtedly helped open doors in the Chinese market. Asia, primarily China, accounted for 18 percent of sales in the first quarter of 2021, and is growing at a rate of 450 percent a year, according to Oatly.

    In Europe, there is growing alarm about Chinese investment in strategic industries like autos, batteries and robotics. The European Commission has begun erecting regulatory barriers to companies with financial links to the Chinese government. But so far no one has expressed fear that China will dominate the world’s supply of oat milk.

    Just in case, Oatly’s prospectus gives it the option of listing in Hong Kong if the foreign ownership becomes a problem in the United States.

    The potential of the market for dairy alternatives is not lost on big food producers. Oatly acknowledged in its offering documents that it faces fierce competition, including from “multinational corporations with substantially greater resources and operations than us.”

    That would include British consumer goods maker Unilever, which said last year that it aims to generate revenue of one billion euros, or $1.2 billion, by 2027 from plant-based substitutes for meat and dairy, for example Hellmann’s vegan mayonnaise or Ben & Jerry’s dairy-free ice cream. Unilever has not announced plans for a milk substitute.

    dairy alternatives are a poor substitute for cow’s milk because they don’t have nearly as much protein.

    Stefan Palzer, the chief technology officer at Nestlé, took issue with those who say a big company can’t move as fast as a bunch of Swedish foodies. A young team at Nestlé developed Wunda in nine months, including three months of market testing in Britain, Mr. Palzer said in an interview.

    substitutes for almost any kind of animal product. The next frontier: fish. Nestlé has begun selling a tuna substitute called Vuna and is working on scallops.

    “It’s a great opportunity to combine health with sustainability,” Mr. Palzer said of plant-based alternatives to milk and meat. “It’s also a great growth opportunity.”

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    California Is Awash in Cash, Thanks to a Booming Market

    In the early days of the pandemic, no one would have looked to the stock market for salvation. From February to late March last year, the S&P 500 suffered one of its sharpest crashes ever, falling nearly 34 percent. But once the federal government began pumping money into the markets and the economy through bond-buying programs and stimulus, the market began rebounding.

    And professional money managers kept buying stocks. Amateur investors, stuck at home, piled into the market and drove up stock prices further. After hitting a bottom in March 2020, the S&P 500 is up nearly 90 percent, creating close to $17 trillion in paper gains.

    Much of that value was created by California companies. The market value of Apple, based in Cupertino, Calif., has risen by over $1 trillion in the past year. The gains for Alphabet and Facebook, combined, have created another $1 trillion in value. Tesla, based in Palo Alto, Calif., added over $500 billion.

    The surge in market value created a significant amount of wealth for executives and workers, including in the technology sector. Executives at major companies typically have pre-established stock sale programs that are constantly converting some of their shares into cash. As they’ve sold into a rising market over the last year, those gains have been especially large; in August, Apple’s chief executive, Tim Cook, sold more than $130 million worth of his stock.

    “When the stock market does well, they do very well,” said David Hitchcock, the primary analyst on California for the bond-rating firm S&P Global, of the state’s wealthy residents. “And in fact, it’s not just the stock market but initial public offerings. Because with Silicon Valley, when entrepreneurs get stock grants that they exercise, or stock options, California makes out very well.”

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    Arrival Developing Electric Vehicles Without Assembly Line

    “This is about getting the best, optimal delivery vehicle for us,” Mr. Wake said.

    Globally, UPS operates a fleet of about 120,000 vehicles, and around 13,000 of them use alternatives to diesel engines such as batteries.

    In addition to UPS, BlackRock and the South Korean automakers Hyundai and Kia have invested in Arrival.

    Electric vehicle companies have attracted frenzied interest from investors, who hope to find the next Tesla, which is valued at more than $650 billion, more than G.M., Ford Motor, Toyota Motor and Volkswagen combined. Wall Street’s interest has encouraged a parade of fledgling companies — some, including Arrival, that are not yet selling vehicles, let alone making a profit — to list their shares on the stock exchange.

    A few have already disappointed investors. The stock of Nikola, which is trying to develop heavy trucks powered by batteries and hydrogen fuel cells, plunged after a small investment firm, Hindenburg Research, said the company had exaggerated its technological abilities. Nikola denied wrongdoing but acknowledged in a February securities filing that some of what it had previously said about its vehicles and technology was inaccurate.

    The Securities and Exchange Commission is investigating Nikola and another company, Lordstown Motors, which aims to make electric pickup trucks. Hindenburg also published a report about Lordstown, accusing it of exaggerating interest in its trucks and its production abilities. Lordstown denies Hindenburg’s claims.

    Many E.V. start-ups have acquired stock listings by merging with special purpose acquisition companies, or SPACs — businesses set up with a pot of cash and a stock listing. Such mergers allow start-ups to join the stock market without the scrutiny of an initial public offering of stock.

    Arrival completed its merger with a SPAC in March. But it remains a long way from turning its vision into a viable business. It has assembled a few prototype vans but has not yet begun testing them on public roads. The company’s shares started trading on March 25 at $22.40 but have since fallen to about $14.

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    How Can the City of London Survive Brexit?

    LONDON — Coming out of Brexit this year, Britain’s government needed a new blueprint for the future of the nation’s financial services as cities like Amsterdam and Paris vied to become Europe’s next capital of investment and banking.

    For some, the answer was Deliveroo, a London-based food delivery company with 100,000 riders on motor scooters and bicycles. Although it lost more than 226 million pounds (nearly $310 million) last year, Deliveroo offered the raw promise of many fast-growing tech start-ups — and it became a symbol of Britain’s new ambitions by deciding to go public and list its shares not in New York but on the London Stock Exchange.

    Deliveroo is a “true British tech success story,” Rishi Sunak, Britain’s top finance official, said last month.

    It was a false start. Deliveroo has since been called “the worst I.P.O. in London’s history.” On the first day of trading, March 31, the shares dropped 26 percent below the initial public offering price. (It has gotten worse.)

    impacts from Brexit were immediate: On the first working day of 2021, trading in European shares shifted from venues in London to major cities in the bloc. Then London’s share of euro-denominated derivatives trading dropped sharply. There’s anxiety over what could go next.

    Financial services are a vital component of Britain’s economy, making up 7 percent of gross domestic product — £132 billion in 2019, or some $170 billion. Exporting financial and other professional services is something Britain excels at. Membership in the European Union allowed London to serve as a financial base for the rest of the continent, and the City’s business ballooned. Four-tenths of financial services exports go to the European Union.

    The government has begun hunting for ideas to bolster London’s reputation as a global finance center, in a series of reviews and consultations on a variety of issues, including I.P.O.s and trading regulations.

    For many, the changes can’t come soon enough.

    “The United Kingdom is not going to sit still and watch its financial services move across” to other European cities, said Alasdair Haynes, the founder of Aquis, a trading venue and stock exchange for equities in London. This will make the next three or four years exciting, he said.

    But this optimism isn’t universal. The prospects of a warm and close relationship between Britain and the European Union have considerably dimmed. The two sides recently finished negotiations on a memorandum of understanding to establish a forum to discuss financial regulation, but the forum is voluntary, and the document has yet to be signed.

    Duff & Phelps found that fewer see London as the world’s leading financial center but that it topped the leader board for regulatory environment.

    Here are some of the plans.

    Mr. Sunak told Parliament on March 3, the same day a review commissioned by the government recommended changes designed to encourage tech companies to go public in London. It proposed ideas, common in New York, that would let founders keep more control of their company after they began selling shares.

    For example: allowing companies with two classes of shares and different voting rights (like Facebook) to list in the “premium” section of the London Stock Exchange, which could pave the way for them to be included in benchmark indexes. Or: allowing a company to go public while selling a smaller proportion of its shares than the current rules require.

    The timing of Deliveroo’s I.P.O. wasn’t a coincidence. It listed with dual-class shares that give its co-founder William Shu more than half of the voting rights for three years — a structure set to “closely align” with the review’s recommendations, the company said.

    But the idea may be a nonstarter among some of London’s institutional investors. Deliveroo flopped partly because they balked at the offer of shares with minimal voting rights.

    the latest craze in financial markets, having taken off with investors and celebrities alike. SPACs are public shell companies that list on an exchange and then hunt for private companies to buy.

    London has been left behind in the SPAC fervor. Last year, 248 SPACs listed in New York, and just four in London, according to data by Dealogic. In March, Cazoo, a British used car retailer, announced that it was going public via a SPAC in New York.

    Already there are signs that Amsterdam could steal the lead in this booming business for Europe. There have been two SPACs each in London and Amsterdam this year, but the value of the listings in Amsterdam are five times that of London.

    Britain’s financial regulatory agency said it would start consultations on SPACs soon and aim to have new rules in place by the summer.

    regain ground lost to Germany, France and other European countries on the issuing of green bonds to finance projects to tackle climate change.

    London’s finance industry isn’t in danger of imminent collapse, but because of Brexit a cornerstone of the British economy isn’t looking as formidable as it once did. And as London tries to keep up with New York, it is looking over its shoulders at the financial technology coming out of Asia.

    The government has continuously billed Brexit as an opportunity to do more business with countries outside of the European Union. This will be essential as international companies begin to ask whether they want to base their European business in London or elsewhere.

    When it comes to the future of Britain, it’s “almost a back-to-the-future approach of London as an international center as opposed to being an international and European center,” said Miles Celic, the chief executive of the CityUK, which represents the industry. “It’s doubling down on that international business.”

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    Shares of TuSimple, a developer of autonomous trucks, fall sharply after I.P.O. before recovering.

    Shares in TuSimple, a developer of autonomous trucks that is backed by Volkswagen and UPS, fell sharply on Thursday after its initial public offering, suggesting that investors have doubts about the company’s promise of putting its technology on the road by 2024.

    The start-up, which is based in San Diego, raised more than $1 billion in an I.P.O. that valued it at nearly $8.5 billion. Shares started trading on the Nasdaq under the symbol TSP at $40 each around noon, but quickly fell as much as 19 percent before recovering those losses by the time the market closed.

    TuSimple and other companies working on autonomous vehicles believe that long-haul trucks are particularly suited for self-driving technology. Routes along highways that trucks travel repeatedly are easier to map and present fewer challenges than local roads, where self-driving systems have to deal with unpredictable stop-and-go traffic, pedestrians and cyclists.

    TuSimple’s self-driving technology relies on several sensors but is centered on long-range cameras, which it says can map objects within five centimeters of accuracy and see as far as 1,000 meters. The company has a fleet of about 70 trucks, with 50 in the United States and 20 in Europe and Asia. As of late March, the company said it had more than 5,700 reservations for vehicles, which typically require a deposit of just $500.

    Walmart said it was investing in Cruise, the autonomous vehicle division of General Motors.

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    Kevin Durant and Nas Stand to Win Big From Coinbase Debut

    Heavy trading volume greeted the highly anticipated market debut of Coinbase on Wednesday, which ended the day worth some $86 billion. The cryptocurrency company’s coming-out party made some insiders very rich, opened up new possibilities for cementing its position in the blockchain economy and blazed a trail for other crypto companies to follow its lead onto the public markets, the DealBook newsletter writes.

    The stake held by Brian Armstrong, Coinbase’s co-founder and chief executive, is now worth roughly $13 billion. Shares held by its other co-founder, Fred Ehrsam, are worth about $6.7 billion. (Andreessen Horowitz’s stake is worth $11.2 billion, while Union Square Ventures’ holding is worth $5.3 billion.) Other investors who stand to collect big paper profits — if they held on to their shares — include the National Basketball Association star Kevin Durant, the rapper Nas and Alexis Ohanian, a co-founder of Reddit.

    The market listing makes it easier for Coinbase to negotiate mergers and acquisitions. “We want to be able to have a public mark on our stock price because it helps us do more and more M.&A.,” Emilie Choi, the company’s chief operating officer, told the technology site Protocol. “There’s so much innovation happening in the crypto ecosystem, and we can’t possibly do it all in-house.” But the listing also brings more scrutiny of the company’s internal culture, which has included accusations of unfair treatment of Black and female employees and poor customer service.

    Coinbase could lead the way for others. The tech investor Ron Conway called Coinbase “the Google for the crypto economy.” As crypto goes mainstream, others with similarly big ambitions may follow Coinbase onto the public markets, including rival markets like Binance, the biggest crypto exchange, and Gemini, the company founded by the Winklevoss twins. Exchange-traded funds that hold Bitcoin and other cryptocurrencies directly also haven’t yet been approved by the S.E.C., but proponents believe that could happen soon.

    original Hacker News post from March 2012 looking for a co-founder for his crypto venture, which drew dismissive comments like, “Because bitcoin worked out so well. Have fun with that, dude.” Bitcoin was worth about $5 then; it’s more than $60,000 now.

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