Celebrity SPACs are buyout firms’ poor cousin 26 Aug 2020 Ex-Goldmanite and one-time Trump adviser Gary Cohn and former House Speaker Paul Ryan are joining the rush to issue blank-check companies. Once shady, SPACs are now the elite's get-rich vehicles of choice. It’s like a version of private equity minus the leverage and track record.
Palantir has “chosen sides” for its listing, too 26 Aug 2020 CEO Alex Karp says the U.S. analytics firm has done that, only working for friendly powers. After 17 years Palantir has a history of losses and just 125 customers. And it wants to perpetuate its founders' control. The firm looks to have sided with them over incoming investors.
Fed policy review will leave market put untouched 26 Aug 2020 Chair Jay Powell’s every utterance is being scoured for hints of whether a new framework will introduce innovations like average-inflation targeting. But one thing won’t change. Rate setters will backstop markets, as they have done for a decade, and investors are counting on it.
Ant squashes some Asian investment bankers 26 Aug 2020 The Chinese fintech outfit’s $20 bln IPO is set to shake up league tables. Citi gets a lift as an unexpected sponsor. Credit Suisse could miss out. And Tencent-aligned Goldman is sidelined. In a region so dependent on equities fees, more than just egos will be bruised.
Corona Capital: Davos delay, Political TV ratings 26 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: The World Economic Forum’s annual winter meeting becomes a summer gathering; and in the U.S., the Democrats’ online spectacle leads TV ratings over the Republicans’ more traditional convention.
Home working will delay not kill office recovery 26 Aug 2020 Some big firms have declared remote working to be new normal. Such fervour is making big city property a buyers’ market, with shorter and cheaper leases and less new construction. But there are still good reasons to work in offices – more spacious ones than in pre-Covid days.
German union will get half its four-day-week wish 26 Aug 2020 IG Metall wants to save jobs by cutting workers’ hours, but without proportional pay cuts. Shorter workweeks make sense for employers, staff and the economy. The per-hour wage hike only suits employees. Dire growth prospects give bosses the upper hand in negotiations.
Hong Kong skyscrapers will scale new heights again 26 Aug 2020 Take the world’s priciest offices. Add the highest vacancy rate in 14 years, geopolitical tension, a weak economy and a broad work-from-home movement. It’s no wonder owners of IFC and other towers have suffered market slumps. There are good reasons, however, to expect a rebound.
Guest view: Freeing Abenomics from Abe 26 Aug 2020 Japanese Prime Minister Shinzo Abe’s return to hospital has raised concerns about a change of power. His signature economic policy fell short even before the pandemic. A strong successor could reinvent it, but that seems unlikely, argues ex-BOJ policy board member Sayuri Shirai.
Luminar chases self-driving without speed bumps 25 Aug 2020 The startup’s autonomous vehicle technology has been mocked by Tesla boss Elon Musk. But Volvo and others are fans of the company, which is going public via a blank-check firm. Luminar faces competition, but its product is cheap and needs little capital – unlike Musk’s outfit.
Dan Loeb deal reveals good and bad of SPACs 25 Aug 2020 Shareholders of the hedge fund manager’s blank-check company backed the $2.6 bln purchase of Global Blue. The payments business gets a listing and new investors despite a battering from Covid-19. But the SPAC structure and Loeb’s extra tweaks ended up looking ragged.
The Exchange: Telecoms mogul David McCourt 25 Aug 2020 The pandemic has made connecting rural areas a global priority. The Irish-American cable entrepreneur explains to Aimee Donnellan why he returned to Dublin to roll out a 3 billion euro broadband programme, and how the Covid-19 crisis created an opportunity to transform business.
China’s Ant can gobble up $200 bln valuation 25 Aug 2020 The fintech firm’s IPO filing shows it handled $17 trln worth of online payments in the year to June. Earnings are volatile, but the trend is strongly positive. The Alibaba affiliate is well placed in the expanding Chinese market. The mooted price tag looks conservative.
Corona Capital: KFC ditches finger lickin’ 25 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: The Yum Brands’ fast-food chain made eating fried chicken synonymous with cleaning your digits with your mouth. KFC has at last realized that’s a no-no in a pandemic.
SoftBank wins most in $5 bln industrial-data M&A 25 Aug 2020 UK-listed Aveva, part of the French Schneider, is buying OSIsoft, backed by the Japanese tech investor. SoftBank gets a handsome profit on an investment made three years ago. For the new owner, justifying the price requires massive growth in sales of factory-analysis software.
Fashion can bear the costs of virtue cotton 25 Aug 2020 Most of China’s crop comes from the persecuted Uighurs’ home region. Forced labour may taint some of that, but clothes makers do not yet trace their complex supply chains back to the farms. Scrutiny from politicians and investors means careful sourcing makes financial sense.
India Insight: Ambani, a maverick Rockefeller 25 Aug 2020 Data is the new oil for the tycoon who wants his $185 bln Reliance to serve all the needs of Indian consumers. He’s backed by America’s tech monopolists. Just as the Standard Oil energy cartel birthed U.S. antitrust law, Mukesh Ambani will amass power until told to stop.
Palantir float harks back to not-so-golden age 24 Aug 2020 The data analytics firm may give its founders shares with expanding votes, ensuring their control even if they sell. It’s an absurd reboot of the golden shares governments once used to protect national champions. Palantir is a rare beast, but that doesn’t justify bad governance.
Buffett’s crisis-fighting machine is broken 24 Aug 2020 When Berkshire Hathaway takes a stake in a gold miner or cuts some bank holdings, investors notice. But these trades offer little insight into the Oracle of Omaha’s downturn game plan. Dig deeper, and it seems his philosophy hasn’t changed much – it just no longer works.
Norway’s $1.1 trln fund is a bad toy for hedgies 24 Aug 2020 Nicolai Tangen’s appointment as boss of the gargantuan rainy-day fund hangs in the balance. Norwegians mostly worry about the big investor’s conflicts, but his likely approach is a larger concern. Active trading of so much money could pointlessly disrupt global markets.
Corona Capital: Dividends, Zoom, Big-screen blues 24 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: As company bosses try to conserve cash, investors are feeling the pinch; Zoom has a back-to-school problem; and a mediocre debut for Russell Crowe’s new road-rage movie shows Hollywood is stuck in the slow lane.
EU banks’ sovereign-debt relapse brings new risks 24 Aug 2020 Lenders from Italy’s Intesa Sanpaolo to Spain’s BBVA have boosted holdings of domestic government bonds, helped by cheap ECB funds. The exposure leaves them vulnerable if euro zone breakup fears return. And it makes completing Europe’s banking union and cross-border M&A harder.
BT would be high-risk private equity double play 24 Aug 2020 The UK telecoms group is bolstering its takeover defences, according to Sky. Political baggage and a 10 bln pound pension gap help its cause. But depressed shares point to breakup potential, and a new owner may think it can manage BT’s daunting long-term investment needs better.
Ireland’s Golfgate can reveal a more responsive EU 24 Aug 2020 The Irish public are outraged about an elite golf jolly that flouted Covid-19 restrictions. One minister has resigned and European Commissioner Phil Hogan is under severe pressure. A swift departure would help Brussels look less like a technocratic refuge from popular politics.
Pinduoduo gets stung by its own shopping hype 24 Aug 2020 Investors erased $16 bln in market value from the Chinese company as orders on its e-commerce app disappointed. “Gross merchandise value” is a confusing metric and much more so when consumer sentiment is volatile. Boss Chen Lei has had a costly lesson in why hard numbers rule.
China picks lazy solution to food crisis 24 Aug 2020 Floods, a pig epidemic and more have delivered sustained double-digit inflation of edible goods. A crackdown on wasteful dining tackles corruption more than high prices: poor people are not overeating. A better agrarian policy and a truce in trade wars would be more powerful fixes.
TikTok could find a new home on Wall Street 21 Aug 2020 Potential suitors for the Chinese-backed video app go from logical – such as Twitter – to downright odd, like Oracle. But owner ByteDance could do worse than try a buyout firm like Blackstone. Private equity could bridge financial gaps and push the right political buttons.
Uber may be in the driver’s seat in labor dispute 21 Aug 2020 A California court gave the ride-hailing firm some breathing room to comply with a new law that turns gig workers into employees. Voters will decide in November if that should hold. The protracted mess gives Uber, DoorDash and others a reason to compromise on labor policies.
GE bonus reset doubles down on bad corporate habit 21 Aug 2020 Its stock having tanked, the U.S. conglomerate has replaced Larry Culp’s original sign-on bonus with one that has much less ambitious share price targets. The award was already flawed – putting in a lower hurdle in a strong stock market makes everything worse.
Viewsroom: Democrats pitch normalcy first 21 Aug 2020 The Democratic National Convention wound up four days of speeches and spectacle with no unforced errors, a broadly appealing economic message and, above all, a call for a restoration of broken norms. Next up, the Republicans. Rob Cox, John Foley and Anna Szymanski recap.