Wall Street is buzzing about Bending Spoons , an Italian tech conglomerate that buys mature internet brands and cuts their expenses using artificial intelligence. Bernstein sees 17% upside for the stock; Goldman Sachs, which led the Bending Spoons initial public offering, sees 26%; and both Wells Fargo and Mizuho see 32%. Bending Spoons own companies including AOL, Eventbrite and Vimeo. The Milan-based company went public earlier in July, and analysts like the straightforward economics behind the company’s three-step business model. That entails buying companies with established customer bases, cutting overhead by means of AI and using the gains to pursue future deals. BSP 1M mountain BSP one month. In a recent note to clients, analysts at Bernstein called Bending Spoons “the antidote to the AI trade,” citing its focus on maximizing profits rather than long-term growth. “This is good old-fashioned roll-up-the-sleeves and streamline the heck out of these aged assets using a modern digitally-powered toolkit, and repeat the playbook in perpetuity,” Mark Shmulik at Bernstein wrote. Bernstein is 51% owned by Societe Generale, one of the joint book-running managers for the Bending Spoons IPO. The big question for analysts is whether potential target companies can use AI to maximize their own profits faster than Bending Spoons, which has to first make an external acquisition and then overhaul operations. “If AI lets mature targets optimize themselves before sale, [Bending Spoon’s] improvement gap narrows, entry multiples potentially increase, and future [internal rates of return] compress,” Kirk Materne at Evercore ISI wrote in a report out Sunday. Evercore was also a joint book-running manager for the IPO. In principle, the Bending Spoons business model is similar to that of many private equity and leveraged buyout firms, but analysts see some substantial differences that extend beyond the financing. Mostly they like the Italian company’s tech-centered operational focus, which stands in contrast to the debt maneuvering employed by private equity. “BSP’s cuts are deep, way deeper than finance-focused funds, asset headcount is supplemented by their own team of [employees] that stick around, and the tech integrations are effectively permanent,” Shmulik at Bernstein wrote. “BSP probably couldn’t resell the assets even if they wanted to without breaking something.”
