Samsung chairman bequeaths a tainted empire 25 Oct 2020 Lee Kun-hee, who transformed a noodle business into a smartphone and chipmaking colossus, has died at 78. The second-generation leader's mark on Korea Inc will endure, as do scandals that follow the family. Their challenge is to clean up the messy parts of his $355 bln legacy.
Election debate victor is big D – America’s debt 23 Oct 2020 The final televised face-off between Donald Trump and Joe Biden offered the first real side-by-side comparison of their policies. The president promised little change while his rival pledged plenty of fiscal spending. Markets will be reassured that austerity is not on the ballot.
Review: Green sceptic sheds more heat than light 23 Oct 2020 Bjorn Lomborg wants the world to understand the risks of doing too much on climate change as well as too little. The green firmament should not be immune to constructive criticism. But the Danish academic’s arguments are not convincing enough to warrant societal complacency.
Corona Capital: Gilead Sciences, Virtual Santa 23 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Remdesivir gets formal approval; Santa goes missing from Macy’s.
Jes Staley’s Barclays strategy will go stale 23 Oct 2020 The CEO’s decision to keep a big trading unit has helped the $25 bln group in 2020. That’s a minor win given a fading market boom and the lender’s low valuation. As the board plans for Staley’s eventual exit, a candidate willing to cut investment banking would be the best choice.
Renault acceleration just leaves it further adrift 23 Oct 2020 Strong pricing means the French carmaker now forecasts positive free cash flow for the second half of 2020. But German rival Daimler’s greater Chinese presence means its operating profit for the year will be level with 2019. Worse, Renault doesn’t even look particularly cheap.
Nigeria unrest throws petrol on economic bonfire 23 Oct 2020 The army is offering to deploy to quell protests against police brutality. That would fan tensions, the last thing the country needs. Africa’s biggest economy is on the ropes due to Covid-19 and low oil prices. Trouble in the oil-producing Niger Delta would bring it to its knees.
Hyundai is primed for a chaebol tune-up 23 Oct 2020 Days after heir Euisun Chung officially ascended to run the South Korean conglomerate, it warned of another $3 bln charge for engine problems. The results, however, should show how electric cars are paying off. That would provide momentum to tackle a broader restructuring.
Four-year deal delay dims the romance of M&A 23 Oct 2020 China Oceanwide’s $2.7 bln takeover of Genworth has been postponed for the 16th time since it was unveiled in October 2016. Blame politics and the pandemic for the wait. Mergers that take this long to consummate make it hard to recall the benefits they were meant to provide.
Goldman’s clawback is small but pointy 22 Oct 2020 CEO David Solomon and others will forfeit $174 mln of bonus payments to resolve the 1MDB bribery scandal. But there’s a question mark over former COO Gary Cohn, who cashed in when he went into politics in 2017. That career change shouldn't shield anyone from past sins.
Viewsroom: Asia’s richest man, China dependency 22 Oct 2020 Mukesh Ambani can divide his $200 bln Reliance Industries and still rule, says India editor Una Galani. Meantime, European and U.S. multinationals are growing increasingly reliant on Chinese growth, seeding future financial and political risks, Rob Cox and columnists discuss.
Big Tech M&A crackdown will help boring rivals 22 Oct 2020 Companies like Oracle and IBM will benefit if Congress proposes a presumptive ban on acquisitions by Amazon, Apple, Facebook and Google. The giants have bought hundreds of firms in the last five years to aid growth. Deal limits may shake up lucrative sectors like cloud computing.
Goldman fines are literally cost of doing business 22 Oct 2020 The Wall Street firm is drawing a line under the 1MDB scandal. A U.S. settlement worth under $3 bln looks trifling, but years of bad behavior cost it far more. The bank spent more on legal woes since 2012 than on rent or technology. Like those expenses, penalties are inevitable.
U.S. airline staff now need aid more than carriers 22 Oct 2020 Southwest and American’s losses continued last quarter. But they both fortified cash resources enough to fund the status quo for at least a year. Meantime, employees are the losers from the financial and political squeeze. Fresh government help needs to more clearly benefit them.
Kering can turn resale weakness into a strength 22 Oct 2020 François-Henri Pinault’s luxury empire faces a threat from the increasingly thriving market for second-hand Gucci bling. A temporary deal with $1.2 bln RealReal is a way to gain insight into the $31 bln segment, plus ESG kudos. Kering could even consider buying it outright.
Cox: China addiction looms as big corporate risk 22 Oct 2020 The People’s Republic has subdued Covid-19 while the West struggles. Its GDP grew 4.9% last quarter as consumers resumed consuming. From Ford to Durex, Hermès to Unilever, multinationals are developing a Chinese demand dependency that could backfire politically and financially.
Corona Capital: Quibi 22 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Video streaming company Quibi’s failure is in spite of – not because of – the Covid-19 pandemic.
Off-colour IAG points to prolonged air-sickness 22 Oct 2020 The owner of British Airways lost 1.3 bln euros in the third quarter. Rising infections and new lockdowns mean the next three months will be little better, dashing new CEO Luis Gallego’s hopes of breaking even by Christmas. He won’t be the only airline boss feeling queasy.
Unilever finds better recipe with new growth focus 22 Oct 2020 The Magnum maker’s sales jumped in the third quarter. CEO Alan Jope hopes price cuts and higher spending on marketing will ensure this is not a one-off. Sacrificing a goal of lifting the operating margin is the right thing to do. But more guidance would inspire more confidence.
Ferragamo’s overhaul hinges on family letting go 22 Oct 2020 Owners of the struggling $3 bln Florentine shoemaker have explored a stake sale. Bringing in private equity worked for fellow bling merchants Versace and Valentino. But Ferragamo’s plight is such that its family owners would have to allow buyout players to hold the whip hand.
Crown Resorts disabused of gambler’s conceit 22 Oct 2020 A protest vote by shareholders has belatedly targeted the $4 bln casino operator’s cosy and inexperienced board. At least it’s forcing the Australian company to concede a shakeup is needed to clean up its mess. It’s a good reminder about why the right sorts of directors matter.
Alibaba valuation hole bored deeper by Ant IPO 22 Oct 2020 The e-commerce giant's fintech stake might be crystallised soon at some $80 bln. A promising cloud computing business could be worth more, but investors ascribe hardly any value to it. Better financial disclosure would help narrow a discount CFO Maggie Wu keeps griping about.
Could Bill Ackman’s SPAC buy Bloomberg or Airbnb? 21 Oct 2020 The media firm and the home-sharing app have both been reported as possible targets for the activist hedge fund manager’s blank-check company. His $5 billion hook could land a big fish by taking a small stake. But large, well-known private firms don't need a SPAC to go public.
A Trump defeat would create an even more rabid Fox 21 Oct 2020 Rupert Murdoch’s $16 bln cable group has enjoyed an unrivaled relationship with the president. Joe Biden’s victory would rob him of his biggest celebrity. Democrats could also target the channel. And Trump might go into competition. Doubling down on division may be the cure.
Roblox IPO has just enough buzzwords 21 Oct 2020 The online video game for kids isn’t just something that entertains. It combines social media, unique content and even a cryptocurrency. The mooted $8 billion value may be a stretch, especially given the faddish nature of gaming. But Roblox is unique enough to justify it for now.
Virus tests faith in food delivery economics 21 Oct 2020 The $285 bln industry is split between companies that connect restaurants with customers online, and those that also deliver the food. The former has better margins, but the latter has expanded the market. With demand for takeouts surging, it’s time to see who’s more profitable.
Corona Capital: U.S. tests, UK loans, Man U groans 21 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Abbott Laboratories has a bumper third quarter; UK banks look at a workaround for their Covid-19 loan problem; and Manchester United reveals a predictably ropey set of annual results.
The Exchange: Private equity and the pandemic 21 Oct 2020 BC Partners is an alternative asset manager whose portfolio companies include PetSmart and Springer Nature. Partner Nikos Stathopoulos chats to Peter Thal Larsen about managing during Covid-19, new investment challenges, and why we need to get back to face-to-face meetings.
Elite Euro-soccer league is an ill-timed challenge 21 Oct 2020 JPMorgan may lend $6 bln to launch a new top-tier competition, Sky News said. Frequent mega-matches like Liverpool vs. Barcelona could boost revenue, yet it’s unclear who’d buy the pricier broadcast rights. And discarding virus-hit smaller clubs would have a political cost.
Nestlé without KitKats is logical next step 21 Oct 2020 The $340 bln Swiss giant’s food and drink business is shrinking, while CEO Mark Schneider is bulking up in pet care and health science. Covid-19 is accelerating the shift. Selling or spinning off confectionery, worth say $30 bln, could unlock value and sidestep a sugar backlash.