Ryanair pain will be milder than rivals’ misery 27 Jul 2020 CEO Michael O’Leary is focusing on preserving cash and cut staff costs by 77% in the first quarter. Competitors that have more unionised employees can’t tighten their belts as much. Another big wave of infections would be even worse for them than the 11 bln euro budget carrier.
China’s Huawei holds a 5G trump card 27 Jul 2020 The telecom kit maker’s stack of next-gen wireless patents will be essential as a global standard for 5G emerges. So even as Vodafone and others ditch Huawei hardware, they might end up licensing its intellectual property, and doing so on Chinese terms. That could be punishing.
Hostile takeover tests Japanese love for free food 27 Jul 2020 Restaurant chain Ootoya rejected a bid from Colowide, saying it would spoil its home-style ethos. The company is hoping its retail investors will remain loyal to the dining coupons they get for holding shares. They would be better off taking the 46% premium, and dining elsewhere.
Goldman Sachs’ 1MDB scar is already fading 24 Jul 2020 It’s paying $2.5 bln to Malaysia over its role in the scandal, four times its fees. Next comes closure with U.S. regulators. The cost in cash and reputation no doubt stings, a bit. But it's too small to amount to more than one extra line on Wall Street’s mile-long rap sheet.
Saks and Neiman Marcus deserve each other 24 Jul 2020 The prospects for floggers of high-end shoes and handbags are worsening daily. But the rival retailers that sell Chanel and other lux goods overlap significantly. With Neiman in bankruptcy and Saks holding together by a thread, the only outstanding question is who will buy whom.
Review: The false economy of simple solutions 24 Jul 2020 Two new books – “The Economics of Belonging” and “Angrynomics” – lucidly unpick the roots of what is ailing the liberal world order and propose clear remedies. It’s an appealing approach, but lacks a convincing explanation for why politicians keep making bad policy choices.
Corona Capital: Movies, Sports 24 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Walt Disney is pushing back the highly anticipated movie “Mulan,” with a domino effect for “Avatar” and “Star Wars” sequels; and sport stars are still making it rain when it comes to pay.
Vodafone tower IPO may only unlock stunted value 24 Jul 2020 CEO Nick Read will float the telco’s mast unit in Frankfurt. The division could be worth up to 18 billion euros, which would boost the overall group’s equity value by 25%. But Read may only list a small chunk and growth prospects are uncertain. That points to a lower valuation.
Centrica sale stresses scale of CEO repair job 24 Jul 2020 Shares in the UK utility jumped 20% after it offloaded its U.S. arm to rival NRG Energy for $3.6 bln. The cash helps CEO Chris O’Shea lower debt and a pension deficit which together total 4 times estimated 2021 EBITDA. Declining earnings still make it hard to restart dividends.
Walmart’s UK exit will be priced to sell 24 Jul 2020 The $375 bln retailer is once again trying to flog a stake in its British chain Asda. Convincing an investor to match the $9 bln J Sainsbury offered in 2018 looks fanciful given weak growth, Brexit risks, and the legacy of the pandemic. The main appeal may be a willing seller.
E-bikes give the two-wheeled market a jolt 24 Jul 2020 Pandemic-induced fear of public transport and state subsidies have boosted the $65 bln bicycle business. Growing numbers are opting for battery-assisted pedalling. As with cars, the shift is disruptive. Leaders like Shimano and Giant will have to make space for new players.
PetroChina’s $38 bln sale unlocks reform and value 24 Jul 2020 The state-owned giant is spinning off its oil and gas pipelines in an overdue shake-up that will allow more private competition. The assets will be divested at twice the parent’s book value. It’s a reminder that Beijing can attain its goals without hurting minority shareholders.
Intel’s tech delays bite progressively harder 23 Jul 2020 Its next-generation chips are six months behind schedule – the latest in a years-long series of stumbles for the $255 bln processor maker. That’s more than just a timing issue. Rivals like AMD are hungry for a slice of the data-center pie, and there’s only so much to go around.
How U.S. made Covid-19 tests a profitable disaster 23 Jul 2020 Week-long waits for results jar with soaring share prices of firms that test for the killer virus, like Quest Diagnostics and LabCorp. Detecting Covid-19 can be financially rewarding, yet supply remains woefully short. The debacle shows market forces need a firm guiding hand.
Silver rally may have a bright, green future 23 Jul 2020 The white metal’s price is up more than gold's so far this year. Silver’s industrial uses mean it shines when lockdowns lift, but there’s a political dimension too. As an ingredient in solar panels, it could benefit from U.S. presidential hopeful Joe Biden’s clean-energy plan.
Traditional IPO is best-fit destination for Airbnb 23 Jul 2020 The home-sharing app is reviving plans to go public. Before the pandemic it favored a direct listing, but now it could use fresh capital. CEO Brian Chesky is exploring all options, including a SPAC investment. For a big name, though, a regular IPO looks the most logical route.
Viewsroom: Europe’s big money moment and baijiu 23 Jul 2020 The 750 bln-euro stimulus package agreed to by EU leaders this week was a test of the region’s political resiliency, may be a big deal for the single currency and could lead to more capital markets and M&A activity, EMEA Editor Peter Thal Larsen explains. Plus, a shot of Moutai.
AT&T boss has a lot to juggle 23 Jul 2020 The $215 bln U.S. telco is seeing steady mobile growth, if customers who currently can't pay start doing so again. DirecTV, though, is deteriorating fast. And other areas – sports, movies and TV production – are in Covid-19 disarray. John Stankey has his work cut out.
Twitter user growth trumps ad slide in long term 23 Jul 2020 Lockdowns have encouraged people to try the $29 bln social network. Users were up 34% year-on-year in the second quarter. Advertisers have pulled back. But Twitter’s problem has always been attracting more devotees. After the pandemic, newcomers will remain – and ads will return.
Brazil’s tax reform is too little, too late 23 Jul 2020 The economy minister just proposed a simplified 12% VAT – part one of a much-needed tax reform. Passage would be a positive step, but small potatoes on its own – especially as its economy could shrink by almost 8%. The window for big-time economic reform may have closed.
Hadas: Globalisation is down but not out 23 Jul 2020 Covid-19 has infected world trade and rising nationalism threatens cross-border harmony. Still, the five-century-old trend towards one world economy has survived worse. Migration, the shared thirst for knowledge and the profit motive will likely bring a resurgence in a few years.
Corona Capital: LatAm pensions, Activism 23 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Pension reform in Mexico and Chile gets a coronavirus makeover; UK chief executives catch a break during lockdown as the number of activist campaigns collapses.
Arm M&A offers SoftBank a tricky route to riches 23 Jul 2020 The Japanese group in 2016 overpaid for the $32 bln chip designer, whose results subsequently deteriorated. A sale to $257 bln Nvidia may offer better returns than an IPO. But it would also rile antitrust agencies and Arm’s customers, who compete with its would-be future owner.
Strong takeover signal refills Cellnex’s war chest 23 Jul 2020 The acquisitive Spanish mobile mast company is raising 4 bln euros from investors. That will fund another 11 bln euros of potential purchases. With mobile operators selling more towers, competition increasing, and debt cheap, it makes sense for CEO Tobias Martinez to stock up.
UK insolvency shakeup stops at Chapter 10.5 23 Jul 2020 A fast-tracked new bankruptcy code gives Covid-hit firms, like Virgin Atlantic, precious breathing space. As with the U.S. Chapter 11, directors can get protection from creditors as they try to restructure. It’s better than the systems used by EU peers, but can still be improved.
Hong Kong finance faces London’s Brexit-like fate 23 Jul 2020 Bankers might not flee all at once but new arrivals will slow as the security law takes effect. Deutsche Bank's new Asia CEO, for example, is leaning on its dual hub structure and has opted for Singapore as a base. Another thriving centre is set to lose relative appeal over time.
Nio’s Chinese rival offers family-friendlier ride 23 Jul 2020 A 200% surge in Tesla and Nio shares this year inspired China’s Li Auto to try its luck in New York. The electric SUV maker is unprofitable, but its designs are less dependent on government support, and its margin is higher than Nio’s. That makes it a safer, if less sporty, play.
Tesla’s wacky valuation has a link to reality 22 Jul 2020 At $295 bln, Elon Musk’s firm accounts for a third of the market worth of the world’s big carmakers. Its surge has helped upstarts like Rivian, Nikola and Fisker raise cash, too. Tesla is way overpriced. But as a proxy for overall electric-vehicle success, it’s not far off.
Microsoft’s cloud mostly floats above Covid-19 22 Jul 2020 The $1.6 trln software giant’s latest quarter showed the pandemic's effects, good and bad. A sharp fall in advertising showed the company can’t entirely escape the real economy. But cloud services, on-demand software, and video gaming grew rapidly, thanks to more work from home.
N.Y. Times’s next boss may not have Trump to thank 22 Jul 2020 The Gray Lady named Meredith Kopit Levien as its new CEO during an auspicious time: It’s enjoying a market value not seen in nearly 20 years. The upswing coincided with President Trump’s election and a surge of subscribers. The streak may be broken after the election.