BREAKINGVIEWS

U.S. IPO market hits oversupply problem

30 July 2021

There are too many companies coming to market, even excluding record numbers of blank-check vehicles. Robinhood’s vaunted offering fell flat, battery maker Clarios delayed its debut, and fruit purveyor Dole downsized. Other IPOs did better, but investors can afford to be choosy.

Exxon saves oil that will have nowhere to go

30 July 2021

The $250 billion giant booked its highest profit in more than a year as oil prices top $75 a barrel. Darren Woods’ firm is showing restraint, getting more from pumping less. That’s important to sustain profit now. When the party ends, Exxon may have squandered an opportunity.

Andrea Orcel dives for treasure in MPS wreck

30 July 2021

Three months after taking charge of UniCredit, the veteran dealmaker is considering a takeover of state-controlled Monte dei Paschi. The Tuscan lender’s capital needs, bad debts and legal woes have scared off other suitors. Strict conditions should help calm wary investors.

Nomura trails in race to cast off Archegos mess

30 July 2021

The lender has not laid out how it lost $2.9 bln in the U.S. fund’s collapse although fellow loser Credit Suisse just did so in painful detail. With the Japanese bank’s investment unit still wilting from the hit, recovering profits elsewhere will only help to a point.

Xavier Niel makes virtue of Iliad investor myopia

30 July 2021

The French tycoon offered to buy the 29% of the telecom group he doesn’t already own at an 11 bln euro equity valuation. It’s well-timed: dividend-hungry investors have been spooked by Iliad’s rising 5G investments. Lowly valued rivals like Bouygues may look to do the same.

Grab’s tiny deal spotlights big Indonesia turf war

30 July 2021

A deal to shore up ties with a Jakarta conglomerate recalls the country’s importance for the super-app’s growth ahead of its $40 bln New York debut, and as top local rivals merge. Grab’s Southeast Asian footprint has benefits, but Indonesia carries outsize strategic value.

Evergrande’s downward spiral runs off the page

30 July 2021

Beijing managed the market impact when it allowed quasi-state entity HNA to slide into bankruptcy. It will face more complex problems if privately-run Evergrande folds. The longer authorities wait to signal support, the more pages it will need to add to its corporate disaster playbook.

New Amazon CEO will have cloud and ads in his cart

29 July 2021

Andy Jassy now has the reins at the $1.8 trln group. E-commerce is the base, but cloud services and advertising, both growing fast and with high margins, account for the bulk of operating profit. The two businesses face challenges: one from competitors, the other from regulators.

Robinhood spoons up taste of own medicine

29 July 2021

The limp day one stock performance of Vlad Tenev’s online brokerage following its $32 bln IPO says little about its prospects. Consider Facebook’s debut on the one hand, or Ask Jeeves on the other. The sour part is that rapid growth for Robinhood depends on share prices going up.

TPG-backed vacation deal is a worthy destination

29 July 2021

One of the private equity firm’s SPACs is merging with Vacasa in a $4.5 bln deal. The firm helps owners list and manage their vacation properties including on Airbnb. The management is experienced, the concept is solid and Vacasa could be a strategic fit for others down the line.

SPAC sheriff shows up not a moment too soon

29 July 2021

The U.S. Department of Justice accused electric-truck maker Nikola’s founder Trevor Milton of making false and misleading statements. He had already stepped down from the $5 bln firm. But investors have started pushing back elsewhere. These are needed steps to legitimize SPACs.

IPO U-turn is probably Didi’s most sensible route

29 July 2021

The beleaguered $40 bln Chinese ride-hailing group denied a report that it plans to go private a month after its U.S. debut. Changing course would be embarrassing and quite costly. But it may be the best way to get back in Beijing’s good graces amid a continuing crackdown.

Big Oil’s generosity has limited shelf life

29 July 2021

Royal Dutch Shell and Total will return billions of dollars to investors. High crude prices mean they can cut debt, invest in green energy and crank up payouts. Such largesse may get harder given growing pressure to cut emissions. Prudent payouts will limit future disappointment.