Review: The legal battle for Hong Kong’s future 24 Apr 2020 In "City on Fire", lawyer Antony Dapiran offers a riveting account of the 2019 protests. While demonstrators took to the streets, Beijing and the local government used Hong Kong’s rule of law to silence opponents. Coming court battles will help determine the financial hub’s fate.
Tesla gets board street cred it sorely needs 23 Apr 2020 Hiro Mizuno, former investment chief at Japan’s $1.5 trln pension fund is joining the electric-car maker as a director. He and Tesla boss Elon Musk may bond over their views on short sellers. But it’s Mizuno’s ESG clout that will serve the governance-challenged manufacturer best.
NFL draft is an anti-capitalist oddity to treasure 23 Apr 2020 The three-day sign-up of rookie players gives first dibs to the weakest teams to ensure all get a shot at success. It’s the opposite of laissez-faire, yet also entirely American – and makes the unhelpful adherence to market forces in areas like healthcare all the more illogical.
Intel’s inside today, may not be tomorrow 23 Apr 2020 The chipmaker’s first-quarter revenue rose 23%. It is benefiting from a pandemic-driven shift to online living, with more demand for servers and PCs. Yet tech firms such as Apple are using more internally-designed chips, which will bring Intel back down to earth.
Snap’s $750 mln offering shows its staying power 23 Apr 2020 The disappearing-message app is the latest company to raise money through a convertible bond. This version includes capped calls, which will limit the upside for investors. Its nearly 45% revenue jump in the first quarter gives the $24 bln issuer some leverage others don’t have.
DraftKings capitalizes on its own dumb luck 23 Apr 2020 The fantasy sports firm is going to list shares via a complex three-step deal involving a SPAC. Blank-check vehicles are usually a last-ditch option for going public. But in an uncertain environment and a frozen IPO pipeline, this odd ball method may be DraftKings’ best hand.
U.S. Senate boss opens state-finance can of worms 23 Apr 2020 Mitch McConnell is resistant to giving states more help, especially for their pensions. He prefers letting them file for bankruptcy – currently not allowed. It’s political posturing, but just floating the idea could eventually backfire, including for his own state of Kentucky.
Blackstone becomes Wall Street’s deals backstop 23 Apr 2020 Advisory boutiques like Evercore and Moelis are putting their faith in private-equity firms to end the virus-induced merger drought. With $150 bln to invest, Steve Schwarzman’s outfit is the biggest, and ready to pounce. The juicy fees from big buyouts are a way off yet, though.
Viewsroom: The F’d up oil market 23 Apr 2020 Breakingviews columnists in London, Mumbai and Brooklyn discuss what’s going on in the global energy markets amid the coronavirus crisis, as well as Facebook’s big Indian deal and the U.S. government’s attempt to prop up small businesses with the Paycheck Protection Program.
Just Eat puts convertibles at top of bankers’ menu 23 Apr 2020 Dutch food delivery group Just Eat Takeaway.com sold 300 million euros of funky debt that converts into equity. It’s a cheap way to raise funds when stock markets are volatile. The products’ stable performance during the coronavirus crisis means investors should stay hungry.
EDF bailout would nuke Macron’s market ambitions 23 Apr 2020 Slumping power demand may force $23 bln EDF to seek fresh capital. The state utility might need at least $4 bln – but likely more. Having pledged to bail out carrier Air France, President Emmanuel Macron’s plan to back away from owning the means of production is fast unravelling.
Corona Capital: Merger bans, Moelis, Domino’s Pizza 23 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. politicians plan a curb on opportunistic M&A, advisory boutique Moelis cuts its dividend, and Domino's delivers.
Norway shines awkward light on Big Oil dividends 23 Apr 2020 Oslo’s state-owned $42 bln Equinor is slashing its first-quarter payout by 67% after oil prices turned negative this week. Bigger peers like Royal Dutch Shell really won’t want to follow suit and have some leeway not to. But a live example of caution makes it harder to hold firm.
Birkin bags are Covid-19’s most resistant nemesis 23 Apr 2020 The pandemic appears to have hit $77 bln Hermes less than luxury peers Kering and LVMH. A Chinese sales rebound suggests refined appetites of its rich clientele remain undiminished. Investors are right in betting the French group will outpace rivals in riding out of the crisis.
Private banks’ loan push will survive virus scare 23 Apr 2020 Plunging markets triggered margin calls on lending to rich clients. Yet Credit Suisse’s modest first-quarter provisions on such loans show big wealth managers can manage the pain. The promise of quick credit should ensure billionaires like SoftBank’s Masayoshi Son keep borrowing.
China’s Didi looks short on engine power 23 Apr 2020 The ride-hailing giant unveiled a three-year plan. Hard-to-compare targets and more of the same bets hardly inspire, especially as tech peers Alibaba and Meituan grab Covid-19 opportunities in health and more. Didi’s $53 bln valuation is vulnerable without a stronger drive.
Crisis paves way for South Korea’s New Deal 23 Apr 2020 President Moon Jae-in has long wanted to redirect the emphasis from exports to jobs and wages. As the pandemic’s economic toll mounts, his government has unveiled nearly $200 bln of relief measures. Fresh political support could help make the “income-led” growth plan a reality.
Uber’s next pick-up: about $4 billion 22 Apr 2020 The ride-sharing firm ended 2019 with $10.8 bln of cash, and the hit to its main business from Covid-19 means that is already depleting. Faced with the prospect of having only a tiny cushion in 2021, now would be a good time for CEO Dara Khosrowshahi to fill the tank.
Dollar-backed crypto shapes up as pandemic winner 22 Apr 2020 Cash is neither contactless nor clean, drawbacks that might have pushed money into big-name bitcoin. Instead, investors have focused on so-called stablecoins like Tether and USD Coin, linked to the U.S. currency. A revamped Libra even has a shot if Facebook gets out of the way.
Crisis gives ECB cover to cast off rating shackles 22 Apr 2020 Central banks have historically steered clear of junk bonds. But the Federal Reserve’s move to buy debt rated below investment grade gives its European counterpart an excuse to follow. Moving swiftly would help it avoid a damaging crisis if the Italian government is downgraded.
Guest view: Push the economic pain up the chain 22 Apr 2020 The crisis created by Covid-19 will leave the most vulnerable facing the biggest burdens. Courts have tools that can help spread the pain more fairly. To preserve the basic economic relationships critical to recovery this should be a top priority, argues lawyer Jamie Gamble.
Earth Day’s 50th comes at just the right moment 22 Apr 2020 Half a century ago, Americans protested in droves for cleaner air and water. But progress has slowed, or been undone, while air pollution costs the global economy $3 trln a year. The pandemic has given a taste of a less smoggy world that could bolster efforts to cut emissions.
Corona Capital: Extended Stay, Victoria’s Secret 22 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.
UniCredit offers banks some hope on bad debt 22 Apr 2020 Italy’s top lender expects the pandemic to hike provisions for dud credit to up to 1.2% of loans in 2020. The spike is chunky, but joint central bank and government action mean it’s lower than past crisis peaks. An expected fallback to pre-Covid-19 levels next year is reassuring.
Guest view: Mutual debt is spectre haunting the EU 22 Apr 2020 European leaders meet on Thursday to discuss how to tackle the economic costs of the pandemic. Collective borrowing is the most contentious item on the agenda. Carlo Altomonte of Bocconi University and Fabrizio Pagani of Muzinich explain how a joint “recovery fund” might work.
Bolloré offers Lagardere costly activist defence 22 Apr 2020 Vivendi, controlled by corporate raider Vincent Bolloré, has taken an 11% stake in the besieged French media company. That may help boss Arnaud Lagardere fend off hedge fund Amber Capital. The reward could be the chance to snap up the group’s prize publishing arm for himself.
It’s easy to like Facebook friending Reliance 22 Apr 2020 The social networking giant is paying $5.7 bln to buy 10% of the conglomerate’s Jio digital services division. WhatsApp will be able to power the retail ambitions of India’s richest man, and even potentially help build a super-app. This rare minority stake is a major step.
ValueAct nudges Nintendo to ditch the joystick 22 Apr 2020 The U.S. investor disclosed a $1 bln stake in the maker of Super Mario. Unlike the typical activist target, Nintendo is well run and outperforms rivals. But its focus on consoles looks short-sighted. As it did with Microsoft, ValueAct can push Nintendo in the right direction.
Hadas: Cheap data at last gets its due 22 Apr 2020 Faster and inexpensive connections are being appreciated now more than ever, but U.S. government inflation measures miss most of the gains. A fairer count would push up historical GDP growth, new research shows. The pandemic suggests even the revised figure lowballs the value.
Netflix locks down first-mover advantage 21 Apr 2020 Stay-at-home edicts helped the $190 bln streaming service best subscriber estimates last quarter. Reed Hastings’ firm lacks Disney’s live-sports and advertising woes, and can weather the new-content pause better than latecomers AT&T and Apple. Netflix is now even harder to beat.