Romanian telco upstart will be M&A party pooper 30 Nov 2023 Originally a mobile provider for Bucharest expats, Digi Communications is expanding across Europe. It is taking market share thanks to a low-cost model and as regulators force merging rivals to shed assets. A wave of consolidation in Spain and elsewhere may yield some surprises.
AI investments carry whiff of vicious circles past 29 Nov 2023 Turmoil at Microsoft-backed OpenAI lays bare governance risks for such tie-ups. A linked, and equally concerning, problem is tech titans injecting capital in exchange for revenue, inflating valuations in the process. The mutual back-scratching evokes dangers of the dot-com era.
Temu takes edge, and shine, off Shein 29 Nov 2023 The shopping app’s huge success helped parent PDD double quarterly revenue, sending its New York stock up 18%. It puts the planned US debut of its rival, valued at $60 bln, in perspective. Shein will test appetite for hot China-linked deals but it’s not a singular phenomenon.
Capital Calls: Amazon shipping 27 Nov 2023 Concise views on global finance: The online retailing giant’s push to distribute packages itself has been a costly way to attract customers, but some numbers suggest it is becoming more efficient and speed is helping boost profit.
OpenAI’s boardroom drama is far from over 23 Nov 2023 Sam Altman will return to the helm of the artificial intelligence firm after a torrid week of resignations. In this Viewsroom podcast, Breakingviews columnists explain how the saga has raised concerns about governance, the future of AI and an alarming cult of the CEO.
OpenAI calls time on alt-governance experiment 22 Nov 2023 Sam Altman’s return as CEO cements the failure of the ChatGPT owner’s attempt at shareholder-second capitalism. The board’s mandate to protect humanity was no match for the will of its biggest backer Microsoft. OpenAI is now more like a regular company – for better or worse.
Nvidia’s AI boom outpaces China limits 21 Nov 2023 The $1 trln semiconductor company tripled revenue, despite a crackdown on exports to the giant market. Unlike Apple, which also faces risks in China, there’s no substitute for Nvidia’s chips for fueling AI. Right now, the only limit on growth is how quickly it can meet demand.
Ransomware targets will pay one way or another 17 Nov 2023 Just saying no to extortionists – as the White House wants US firms to do – might stamp out ransom attacks. But the hack of Chinese bank ICBC shows why it’s not always realistic. Companies who won’t pay up need ever-better defenses. Either way, it’s an extra cost to be borne.
Payments sector comedown creates opening for M&A 17 Nov 2023 The once-hot industry has slumped amid rising competition and a possible regulatory clampdown. For online specialists like $34 bln Adyen, the solution is to boost their customer offerings by buying startups. Older players like Nexi and Worldline, meanwhile, are ripe for mergers.
Tata Technologies sets smartly low bar for IPO 17 Nov 2023 The EV-servicing firm is the Indian conglomerate’s first listing in nearly two decades. The $2.4 bln valuation at 28 times earnings is well below peers. But most of its business comes from just five clients and Mumbai stocks are expensive. A cheap price may ensure a smooth start.
Google antitrust trial crystallizes Apple’s risk 15 Nov 2023 Court testimony revealed that Alphabet’s search giant gives the iPhone maker 36% of ad revenue generated through its devices. The cost allows Google to argue it’s in a pay-to-play market. It also suggests that Apple and its shareholders have more to lose from the deal unwinding.
Capital Calls: Goodyear, Target 15 Nov 2023 Concise views on global finance: By offloading assets, the 125-year-old tire maker is succumbing to a similar overhaul as many other iconic US industrial centenarians; the $60 bln retailer has finally taken aim at what it can control – keeping watch over inventory and costs.
Payments-app war drags banks into discomfort zone 14 Nov 2023 The US lenders behind Venmo rival Zelle, including JPMorgan and Bank of America, are now compensating victims of some online scams. They’d rather not, and technically shouldn’t have to. In the cutthroat fintech market, however, customers can be right even when they’re wrong.
China’s Singles Day shows buyers’ commitment issue 13 Nov 2023 The country’s biggest shopping event recorded meagre growth of around 2% in total volumes despite steep discounts. E-commerce giant Alibaba didn’t provide figures again, a sign of slow sales. Beijing needs consumers to power growth but shoppers look fatigued.
Meta’s China quest thaws thin layer of dense cube 10 Nov 2023 The $828 bln social media company plans to sell virtual reality headsets in the country, 14 years after its Facebook service was banned there. Hardware is a less thorny way to grab revenue. It also puts pressure on the US government to soften its stance on some Chinese tech.
Capital Calls: SoftBank 10 Nov 2023 Concise views on global finance: The Japanese conglomerate’s finance chief reckons its Vision Funds have ‘hit a bottom’. The firm’s broader surprise $6.2 bln quarterly loss, though, prompted shareholders to wipe 9% off the stock.
Adyen shows being an open book pays off 9 Nov 2023 Shares in the Dutch payment firm jumped 35% despite less ambitious revenue growth and profit margin targets. That seems inconsistent. But investors cheered Adyen’s promise of more frequent updates and its clearer business roadmap. It proves the benefits of being transparent.
Capital Calls: Arm, Insurers’ climate score 9 Nov 2023 Concise views on global finance: The $56 bln chip group said it can’t be sure when certain customer deals will translate into revenue, undermining its quest for a steadier top line; insurers are still too addicted to dirty energy, a new study shows.
Profitable Klarna poses IPO valuation conundrum 9 Nov 2023 The pay-later group is making money. Ahead of a possible float, that makes it easier for CEO Sebastian Siemiatkowski to claim he has a viable business. Yet to get an uplift on his last $7 bln price tag, he’ll have to persuade investors to value Klarna like a fintech, not a bank.
China EV champs race to make leaner green machines 8 Nov 2023 Nio is ditching 10% of its staff. Rivals won’t be far behind. While electric-car startups in the People’s Republic have proven their tech can keep pace with Tesla, their losses have been rising, in part due to a persistent price war. That makes cutting costs the next big test.