What's going on?

Membership Collective Group (MCG) filed for a US initial public offering (IPO) this week, but the owner of the Soho House members clubs looks like it has champagne tastes on a beer budget.

What does this mean?

MCG has been busy: the company owns a home decor retailer, nine workspaces in London, LA, and New York, and 28 Soho House members clubs around the world. The latter boast 119,000 members who each shell out a regular membership fee, as well as pay for food, drink, and other services at their venue of choice.

But not enough, apparently: the company saw its revenue slip from $642 million in 2019 to $384 million last year. Add to that a $235 million loss in 2020 and a $91 million loss in the first quarter of this year, and suddenly it�s not looking so fancy anymore. MCG, then, will be hoping investors give it a pass what with this anything-but-average last 18 months, and instead buy into its potential for future growth.

Why should I care?

For markets: That�s a lot of debt.

Investors buying into the IPO are essentially betting that Soho House will benefit now that fatcats are donning their going-out monocles again. They might also point to flexible working, which could give revenue at Soho House�s workspaces a boost. But the risks are serious: the company has $826 million in debt, which it plans to pay off using most of the money it raises from the IPO. That�ll leave very little left to invest in actually growing the business�

Zooming out: This time it�s different.�

Anything the US can do, Iceland can do better: shares of bank Islandsbanki started trading on Tuesday in the country�s biggest-ever IPO. It feels like just yesterday when Iceland�s biggest banks were being wiped out by the financial crisis, so here�s hoping things work out better this time around. And seeing as Islandsbanki�s shares initially jumped 20%, it�s off to a good start.