Elice IPO sinks 30% as oil hits $111 after Saudi Davos cancellation

The sell-off spans multiple fronts, but the common thread is a repricing of risk. Elice's disappointing debut in South Korea shows that even a modest $150 million IPO can falter when investors are wary of AI valuations. At the same time, oil's rise to $111 per barrel despite increased Middle East supply signals that geopolitical shocks, not just fundamentals, are driving prices. The cancellation of Saudi Arabia's Future Investment Initiative after Houthi attacks on Riyadh's airport removed a high-profile venue for dealmaking and added to the unease.

In France, curfews imposed after nights of rioting and looting in Paris, with unrest spreading to Milan, pushed the French 10-year bond yield to 4.94%, a level last seen in 2002. Commerzbank's Christoph Rieger noted that the latest dynamics show signs of a global, not just French, debt crisis. This backdrop of social unrest and rising borrowing costs makes investors less willing to take chances on new issues like Elice.

Meanwhile, the AI trade itself is dividing into winners and losers. Deutsche Bank's Jim Reid observed that since October 2025, companies writing AI cheques such as Microsoft, Meta and Broadcom have generally gone nowhere, while beneficiaries like SK hynix, Samsung and TSMC are up sharply. Glenmede warns that capex depreciation will start to weigh on spenders' earnings next year, and Stifel forecasts hyperscalers will go cash flow negative this year. These dynamics suggest the AI boom's financial mechanics may be more fragile than they appear.