BREAKINGVIEWS

Biggest global discontinuity risk is to the upside

23 August 2019

As G7 leaders prepare for a non-meeting of minds, the worldwide slide into discord seems unstoppable - from Brexit Britain and erratic Trump to troubled Kashmir and Hong Kong. Markets expect more of the same, but the biggest risk now may be a step change – for the better.

EU’s 100 bln euro tech fund scratches wrong itch

23 August 2019

Brussels officials, sad about not having their own Google, are cooking up an investment vehicle to fund home-grown unicorns. The bloc’s history suggests the main result will be a lot of squabbling. More important, lack of money isn’t what holds back European tech startups.

Green fears could keep UK high-speed rail on track

23 August 2019

The so-called HS2 link from London to northern England may end up 29 billion pounds over budget. That eats into benefits of the bullet train’s potential to narrow Britain’s troubling north-south divide. Yet concerns about global warming point to the project maintaining momentum.

India gets stuck in anti-corruption crossfire

23 August 2019

After tycoons, authorities are turning to politicians, arresting opposition veteran and former finance minister P. Chidambaram. The move, months after Narendra Modi's big win, fuels fears of factionalism; it also raises concerns about the unwanted consequences of a cleanup.

Peppa Pig buyer risks going too high on hog

23 August 2019

Hasbro has found juicy slabs of fat to cut to justify the $4 bln it is paying to buy UK studio Entertainment One, home to the porcine cartoon character. The U.S. toymaker is also larding up on debt and diluting shareholders for the deal. That could leave it stuck in some mud.

Tencent e-sports stars would play better as a team

23 August 2019

Shares in China’s DouYu have crashed since its first results as a U.S.-listed company. Video-game streaming rival Huya is gaining users faster, spends less on sales, and is not as reliant on top gamers. For Tencent, a big investor in both, it’s a new reason to push for a merger.

U.S. retail can get better before it gets worse

22 August 2019

Big store chains are bucking the gloom, some thanks to their former inefficiency. Nordstrom is cutting stock, J.C. Penney is slashing costs and Target’s bid to compete with Amazon is starting to take effect. That creates room for pleasant surprises – if only in the short term.

Rivals expose WeWork’s low defensive walls

22 August 2019

Flexible-office provider Knotel just raised $400 mln. Coworking upstart Industrious could soon make money. WeWork’s huge losses and flawed governance are already enough to undermine its $47 bln pre-IPO valuation. The fragility of its first-mover advantage is another weakness.

A VW-Tesla marriage looks heartbreakingly remote

22 August 2019

The German carmaker’s CEO Herbert Diess covets the $40 bln group’s tech, Manager Magazin reported. Tesla could use VW’s cash and manufacturing nous. But boss Elon Musk has shown no interest in cooperating with rivals. And Tesla’s crazy-high valuation makes a takeover unlikely.

John Malone’s Swiss sale still faces interference

22 August 2019

Sunrise wants to gee up support for its $6.3 bln purchase of Alpine assets held by the “cable cowboy”. Yet new, higher synergy estimates lack credibility without explanation, and big shareholder Freenet rightly panned the price. CEO Olaf Swantee still has a fight on his hands.

Cigs show challenge of putting stakeholders first

22 August 2019

Tobacco companies that were run for customers rather than shareholders would aim to reduce sales of their noxious products. But less scrupulous rivals can undermine solitary socially conscious CEOs. Without collusion or new laws, corporate virtue-talk is mostly a smokescreen.

Airlines flash economic warning lights Down Under

22 August 2019

Profit at Qantas and Air New Zealand fell, hurt both by pricey fuel and headwinds at home. Corporate and discount travellers alike are pulling back, and neither carrier is offering much future guidance. Any benefits of rock-bottom interest rates are taking time to trickle down.

Walmart adds solar burns to Tesla’s challenges

21 August 2019

The U.S. retailing giant is suing Elon Musk’s $40 bln electric-car maker for negligence after its solar panels allegedly sparked fires at stores, further denting Tesla’s quality-control image. Walmart’s move also puts Musk’s odd 2016 acquisition of SolarCity back in the spotlight.