Shuli Ren, Bloomberg
From an AI-fueled stock rally to China brushing off US tariff threats while posting a record trade surplus, 2025 delivered no shortage of economic marvels. Expect debates over innovation, disruption and capital to carry straight into 2026. On my watch list are four developments that may sound surprising but are far from implausible.
If WeWork managed to issue corporate bonds before going public, why couldn’t OpenAI do the same? Valued at around $500 billion and not planning an IPO before 2026 at the earliest, the AI powerhouse still has massive funding needs. Cash burn is projected at $17 billion, followed by $35 billion and $45 billion in the two years after. Unsurprisingly, OpenAI is fundraising again, reportedly seeking up to $100 billion at a valuation that could reach $830 billion.
SoftBank invested $30 billion in 2025, but will Masayoshi Son be able or willing to anchor future rounds, or accept a lower valuation if a more disciplined investor steps in? Markets are increasingly uneasy about OpenAI’s earnings potential. If venture capital appetite fades, the bond market may beckon. Other hyperscalers have gone there before. Sam Altman can’t rely forever on partners to raise debt on OpenAI’s behalf. At some point, the company may need to lever up its own balance sheet.
Then there’s Labubu. Imagine walking into a Pop Mart store and buying the toothy figurine whenever you like – no scalpers, no scarcity drama. That would delight fans and put Pop Mart’s brand strength to the test. The Hong Kong-listed toymaker is among the market’s most debated stocks. Bulls see a durable trend: young consumers splurging on small indulgences, aided by Pop Mart’s steady stream of eye-catching designs. Skeptics argue scarcity does much of the heavy lifting and that online buzz has peaked. The simplest way to settle the debate is to stock the shelves and see whether demand holds.
In Hong Kong, some perpetual bondholders of New World Development hope billionaire chairman Henry Cheng will lead an equity injection after the developer stumbled following a debt-heavy expansion into luxury retail. A recent debt swap proposing haircuts of up to 50% drew only 72% acceptance, suggesting creditors are holding out for better terms.
Speculation persists that the Cheng family could bring in new equity partners as the property market shows tentative green shoots. Because New World cannot pay dividends to new shareholders until accrued interest on perpetuals is settled, creditors appear to have leverage. History suggests caution. The Chengs are disciplined capital allocators who rarely throw good money after bad. Hong Kong tycoons are wealthy for a reason. Don’t underestimate their financial engineering.
Finally, private credit. Much has been said about its potential to trigger the next financial crisis. A quieter possibility is that the sector has already peaked. Investors are realizing private credit lacks the upside of private equity while offering little room for error as spreads compress. One bad loan can sour an entire fund. For many, the risk-reward equation no longer adds up.
Thanks for reading – and here’s to another year of spirited markets, bold bets and a few surprises along the way. [Abridged]
Courtesy Bloomberg/Shuli Ren
Shuli Ren, Bloomberg
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