Elliott cloud-computing bet rests on dumb markets 24 Apr 2019 The activist group revealed a $1.4 billion stake in German software giant SAP, and backed its management. The fund’s own analysis implies the stock could double, but looks out of kilter with analysts’ forecasts. The bold call means SAP needs to move quickly to keep Elliott sweet.
Nissan earnings cut is one symptom of distraction 24 Apr 2019 The Japanese carmaker slashed its forecast annual operating income almost one third, a second cut in months. It blames warranty costs, weak sales, and the fracas over its ex-chairman. New woes make it harder for boss Hiroto Saikawa to steer through old ones.
China’s game makers face a shapeshifting boss 24 Apr 2019 New rules provide some clarity and point toward fewer and blander video-game titles after a freeze on approvals last year. That should be manageable for giants including the $475 bln Tencent. Yet the whims of a revamped regulator finding its feet still warrant a discount.
Singapore raises stakes for Macau casino permits 24 Apr 2019 Las Vegas Sands and Genting will invest some $7 bln and endure harsher rules to extend their duopoly in the city-state. Investors flinched, wiping $2 bln off shares. It increases the odds that the Chinese gambling hub will demand more onerous terms from Wynn, MGM, and rivals, too.
SpaceX-Amazon satellite race pits speed vs. cash 23 Apr 2019 Elon Musk’s firm hopes to soon start launching thousands of satellites for a global broadband network. Jeff Bezos also eyes the prize, and his outfit has deeper pockets. Yet regulatory and technological glitches are likely, and demand uncertain. Losses could be out of this world.
Boeing has a chance to get ahead on governance 23 Apr 2019 The $212 bln aerospace giant is facing calls to strip chair-CEO Dennis Muilenburg of the former title. Half of the S&P 500 now split the roles. Boeing's sluggish response to 737 MAX crashes shows why it makes sense. An 11 pct fall in the share price provides a handy excuse, too.
Holding: Comic sues, but joke’s on copyright law 23 Apr 2019 Heard the one about the writer who says talk-show host Conan O’Brien stole his schtick? It’s the latest case of creative types, from Radiohead to Oracle, refusing to share clever but derivative ideas. Excessive legal protections that stifle innovation are no laughing matter.
The Exchange: Marco Polo 2.0 23 Apr 2019 Italy irked the United States by backing Beijing’s grand infrastructure plan. The country needs to improve ties with the People’s Republic to sell more wine and other exports, says Rome’s top China expert. Overcoming trade barriers will, however, require an EU team effort.
Alpine stability helps Swiss scale IPO peak 23 Apr 2019 Train maker Stadler and medical devices group Medacta raised a combined $1.9 bln in Zurich listings this month, defying a European market becalmed by Brexit and trade woes. Relative stock market strength is fuelling the rush. As valuations flatten, other venues will catch up.
Twitter is the less lovable of Jack Dorsey’s twins 23 Apr 2019 While the social-media site is growing its user base and tripled its earnings in the first quarter, the other company its CEO runs has surged ahead. Square is in a sweet spot thanks to new products like a money-transfer app. Of the two, Square deserves more of his time.
Thomas Cook survival relies on risky breakup 23 Apr 2019 The indebted UK tour operator’s shares jumped on reports it could be bought by Chinese group Fosun or private equity. Either would likely see the group sell its airline, making it hard to get a good price. And the rump that remains would be even more challenged.
Casino sales merely keep its head above water 23 Apr 2019 The indebted 4.2 bln euro French retailer has sold 470 million euros of supermarkets to U.S. buyout firm Apollo. The valuation looks adequate and the group’s shares are well above September lows. But leasing back its own stores will act as a drag on Casino’s recovery.
Why open banking remains a closed shop 23 Apr 2019 It’s over a year since the UK and EU gave tech groups access to account data, supposedly boosting competition. Yet glitches and a narrow focus on current accounts mean the measures are barely used. Change requires more tech-savvy financial institutions – or more regulation.
China’s wannabe Starbucks brews a muddy IPO 23 Apr 2019 Luckin Coffee is rushing to deliver a New York listing before its business plan leaks. Its prospectus argues fair value doubled in three months, and an April round put the company’s worth at nearly $3 bln. Its money-losing model and murky corporate structure leave a bitter taste.
Auto giants convert Chinese rivals into clients 23 Apr 2019 Volkswagen and Toyota share a new strategy in the world’s largest car market. In addition to designing own-brand electric vehicles, they are letting other automakers use their technology. It could be a clever way to leverage economies of scale, and hedge against competitive risk.
P&G could gain from shaving off Gillette 22 Apr 2019 The consumer giant’s razor business, which it bought for $57 bln back in 2005, has been blunted by cheaper competition. Sales, profit and market share are shrinking. A new owner might be able to lavish more attention on Gillette, and leave P&G to focus on areas like healthcare.
Elon Musk looks guilty of distracted driving 22 Apr 2019 Tesla’s CEO is talking up autonomous vehicles, days after offering investors more say and culling the board. But the $46 bln electric-car maker has more pressing concerns, including signs that demand and vehicle quality are falling – not to mention a dwindling pile of cash.
Kraft Heinz new boss is a good palate cleanser 22 Apr 2019 Miguel Patricio is not an entirely fresh ingredient for the food company – he ran marketing at AB InBev, created by Kraft’s second-largest shareholder. Both companies have underperformed in recent years. That said, his focus on marketing may break the company’s holding pattern.
Hedge fund have-mores lord it over the rest 22 Apr 2019 Subdued returns and cheap index trackers have squeezed hedge fund fees well below the once-typical 2 pct of assets and 20 pct of gains. Yet D.E. Shaw is raising the cost of its flagship fund to 3-and-30. A handful of firms can still produce performance investors will pay for.
Saudi Arabia will feel Trump’s Iran slap too 22 Apr 2019 The U.S. president will fully enforce sanctions on Tehran’s oil exports. Riyadh must pump more to prevent crude prices spiking further, which it has the scope to do. But doing Trump’s bidding will rankle OPEC peers. And the administration has a track record of changing its mind.
Viewsroom: ‘Game of Thrones’-style war heads to TV 18 Apr 2019 HBO’s hit series is ending as parent AT&T, Amazon, Apple and Walt Disney launch their claims to the streaming-video crown. Netflix, though, will be hard to usurp. Elsewhere, India’s weeks-long election gets underway. And global economic growth collides with nationalism’s rise.
Climate risk gets the right kind of oversight 18 Apr 2019 Central banks presiding over almost half the planet’s GDP plan to treat global warming as a threat to financial stability. It’ll add heft to existing pressure from investors and make it harder for companies and their lenders to ignore the longer-term impacts of climate change.
Weed giant chooses odd way to lay down U.S. roots 18 Apr 2019 Canopy Growth has struck an unusual deal to buy an American rival for $3.4 bln – if marijuana becomes legal there. It’s a clever way of getting into the world’s biggest market. The question is why the Canadian outfit would want a company happy to accept this lopsided arrangement.
Pinterest and Zoom indulge in IPO micro-aggression 18 Apr 2019 Both tech companies sold shares for more than underwriters previously indicated. True, market debuts give little indication of long-term success. When insiders already hold supervoting shares, though, leaving a bit less on the table is a gentle reminder of who calls the shots.
Blackstone’s conversion is less than it seems 18 Apr 2019 Turning into a corporation should broaden the buyout shop’s investor base and win inclusion in indexes. Yet a similar move hasn’t done much for rival KKR, and power stays in hands of boss Steve Schwarzman and insiders. They, not passive investors, will decide Blackstone’s value.
Aramco sale would grease Mukesh Ambani’s tidy-up 18 Apr 2019 The Saudi oil giant is eyeing a stake in the energy assets of the tycoon’s $127 bln Reliance Industries. That would aid Aramco’s strategic ambitions. It would also mean India’s biggest listed group could keep expanding its consumer-to-oil businesses without adding too much debt.
Unilever could use a few Nestlé diet tips 18 Apr 2019 Decent first-quarter revenue growth at both consumer giants means their 2020 margin goals can live another day. But Unilever’s foods business expanded just 1.5 percent organically compared to 3.4 percent overall at Nestlé. The Anglo-Dutch group needs to overhaul its pantry.
Chinese millennials create M&A urgency for Kering 18 Apr 2019 Gucci’s success, especially with the mainland’s young affluent, is a blessing and a curse for Francois-Henri Pinault’s luxury empire. The Italian brand accounts for 61 pct of sales. Finding another marque, like Valentino or Patek Philippe, to balance the business won’t come cheap.
Next Ukraine leader will inherit unfunny problems 18 Apr 2019 A comedian whose TV character accidentally becomes president is the front runner to win Sunday’s election and take charge of securing billions of dollars in aid. To unlock the money, Kiev must satisfy the IMF it is tackling corruption. It’s a challenge where life may imitate art.
TSMC’s new chips will leave Samsung in the dust 18 Apr 2019 Quarterly earnings at Taiwan’s $220 bln semiconductor maker fell 32 pct to $2 bln. However, cutting-edge technology means TSMC will benefit first as 5G handsets come into use and its South Korean rival will struggle to catch up. That justifies the rich valuation gap.