VF’s Supreme buy doesn’t need much kick 9 Nov 2020 The Vans owner is paying $2.1 bln to buy the cult-like streetwear brand from Carlyle. Expanding Supreme aggressively risks taking away its scarcity value. But at some 4 times sales, less than Nike’s multiple, VF has baked in room for Supreme’s growth to be no better than basic.
Pfizer’s valuation boost is more hope than science 9 Nov 2020 Good news over its Covid-19 vaccine added over $20 bln to the drugmaker’s market valuation in a day. That would only make sense if 40% of the world receives it and pays full price. Still, Pfizer may now get a kinder hearing next time politicians take aim at high drug prices.
Cox: American progress hangs on geriatric trinity 9 Nov 2020 Usually presidents wait until clinching a second term to focus on how they’ll be remembered in history. At almost 78 Biden must govern as if he has one chance to make his mark. Ditto his aging foil in the Senate and ally in the House. There may be less gridlock than expected.
Pfizer jolt delivers taste of post-Covid markets 9 Nov 2020 The pharmaceutical giant said its vaccine may be over 90% effective. Stocks surged and bond yields rose. How long that level of immunity lasts isn’t clear, and inoculating enough people will take time. But the prospect of a return to normality is a potent market stimulant.
The Donald Trump show will continue broadcasting 9 Nov 2020 The president may have lost the White House. But an army of Twitter followers and right-wing media will ensure him a platform. That will serve his many interests, from boosting his businesses and staving off looming debt payments to acting as a thorn in the side of his successor.
WTO is early test of Joe Biden’s multilateralism 9 Nov 2020 The president-elect approaches diplomacy very differently to Donald Trump. The world trade body’s snarled-up leadership race is a chance to show that. But American criticisms of global commerce rules and China were bipartisan. Biden will seek reform but do it more collegially.
Corona Capital: Warren Buffett, Burger boost 9 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Rising share prices take the sting out of Berkshire Hathaway’s Covid-19 profit hit; and McDonald’s reports a good quarter for American nugget-lovers.
SoftBank $97 bln cash pot is activist battleground 9 Nov 2020 That’s how much firepower CEO Masayoshi Son reckons his company will have after selling assets. He favours investing in artificial intelligence while pushy investor Elliott might prefer buybacks. Given the $130 bln company’s persistent discount, the latter makes far more sense.
Turkey’s new economy team will face fresh problems 9 Nov 2020 President Tayyip Erdogan installed a new central bank boss while his son-in-law quit as finance minister. Credible policymakers are more likely to hike rates. Just as well: without President Donald Trump, Ankara’s foreign policy – and the lira – are more vulnerable to sanctions.
Foxconn hitches bumpy ride with electric vehicles 9 Nov 2020 The $39 bln iPhone-assembler wants to supply parts for 10% of the world’s green cars by 2027. The stakes are high as the company weans itself from a dependency on Apple. Founder Terry Gou’s electronics expertise and deep pockets, though, puts it in a strong starting position.
Look past Chinese makeup IPO’s glossy sheen 9 Nov 2020 Unprofitable Yatsen wants to raise money for deals and data analysis. Its hot Perfect Diary line reflects tech nous targeting millennials and their growing appetite for local brands. Comparable sales multiples imply a $7 bln valuation, but that’s before applying a fad discount.
Viewsroom: What Biden bodes for money and markets 7 Nov 2020 Without a clear Senate majority, the former vice president will need to tack to the center when he occupies the White House. For Wall Street that’s a bullet dodged. For other industries, it’s a mixed bag. For multilateral institutions, it’s an improvement from Donald Trump.
Corporate America prepares for life in purple 7 Nov 2020 From finance to tech to weed to transport, companies have had plenty of time to consider what a Joe Biden presidency means. Without a clear Senate shift one way or the other, legislative gridlock appears likely. Here is what the 2020 election will mean industry by industry.
Biden win sets scene for storm before the calm 7 Nov 2020 As America’s 46th president, Joe Biden augurs predictable policymaking and decisive action on Covid-19. But he faces three big challenges: a progressive wing rejected by voters, a sore loser with months left in office and, most difficult of all, a potentially Republican Senate.
Corona Capital: Cars, Kalashnikovs, Houses 6 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Japanese carmakers put their feet down thanks to China’s bounceback; Russia’s Kalashnikov gets a new owner; and rich-country housing markets look surprisingly cheery.
Richemont hedges online bets with Farfetch stake 6 Nov 2020 The Cartier owner is investing $550 mln in the deluxe fashion e-tailer, alongside Alibaba. That should help Richemont grab a larger share of China’s booming e-commerce market. But betting on a competitor of its own struggling online unit also looks like an admission of failure.
Bank investors blithely bet on benign EU lockdowns 6 Nov 2020 Shares in lenders like Deutsche Bank, Lloyds and BNP are higher than a month ago despite new restrictions in Germany, Britain and France. Short, mild quarantines may indeed leave them unscathed. Yet that’s a risky bet since past predictions of a “V-shaped” recovery were wrong.
Alibaba will feel the Ant sting 6 Nov 2020 The e-commerce giant’s close ties with the fintech company are now weighing on its $780 bln valuation. Ant’s yanked IPO and Beijing’s new credit rules come as growth at Alibaba’s core shopping business slows. Boss Daniel Zhang will have to start pulling harder on other levers.
Macquarie hits limits of diversification 6 Nov 2020 The $34 bln Aussie financial conglomerate suffered a 32% fall in half-year net profit as its investment bank generated a rare loss. Boss Shemara Wikramanayake likes to trumpet the array of revenue sources, but even done well, the business model provides only so much of a buffer.
Fox-Disney deal creates a new greater fool 5 Nov 2020 Sinclair has written down the value of sports networks it bought from Walt Disney by over $4 bln. The Magic Kingdom had acquired them in its overpriced carve-up of Rupert Murdoch’s media empire. That leaves a wily Fox, a lucky mouse, and a hapless Sinclair holding the bag.
Biogen gets $17 bln jolt of Alzheimer’s hope 5 Nov 2020 The U.S. biotech group's market value rocketed on Wednesday after regulators hinted they were persuaded its drug worked. A vote on Friday could send Biogen stock up more. Approval may also signal an easier regulatory touch for desperate diseases. That could help the whole sector.
RSA should finally tie knot via latest altar visit 5 Nov 2020 Five years after a union with Zurich Insurance fell through, the UK insurer has a 7.1 bln pound offer from Canadian and Danish suitors. RSA will grab an all-cash bid that comes with a 50% premium. The buyers’ need for fat synergies will discourage counter-proposals.
Italy’s oldest bank risks becoming a new Alitalia 5 Nov 2020 Banca Monte dei Paschi di Siena needs another bailout. A government rescue would cost around 2 bln euros. Winding it down and selling the rump to a rival like UniCredit would be politically toxic. Like Rome’s loss-making airline, it is turning into a lasting burden on taxpayers.
Green energy valuations could use stiffer tailwind 5 Nov 2020 Siemens Gamesa and Danish rival Vestas now have over 60 bln euros of orders for wind turbines between them. But valuations look toppy even if they hit margin targets. A possible Joe Biden U.S. presidency is also less likely to supercharge renewables with a Republican Senate.
Twitter is having its cake and eating it, too 5 Nov 2020 The social network’s label on inaccurate posts by U.S. President Donald Trump might have slowed their spread. Policing lends Twitter some credibility. But misinformation can rise as uncertainty lingers. A too soft approach enables Twitter to benefit from dangerous virality.
Corona Capital: GM earnings, Third-quarter readout 5 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: General Motors swerves around Covid-19 potholes; and U.S. companies look to have emerged from a difficult three months in better shape than expected.
Bank of England offers plaster for Covid-19 wound 5 Nov 2020 Governor Andrew Bailey will buy an extra 150 bln pounds of government debt, allowing finance minister Rishi Sunak to keep spending during a new lockdown. But the pandemic’s structural shifts may leave behind workers who lack the right skills. Only the state can fix that problem.
European rivals give SocGen a lesson in efficiency 5 Nov 2020 Like the French bank, ING and UniCredit saw third-quarter net profit fall due to reduced revenue and more bad debt. Low interest rates will keep squeezing income. That puts SocGen, whose costs ate up 75% of its top line this year, at a disadvantage to its Dutch and Italian peers.
Crushed Ant is just the start of China techlash 5 Nov 2020 An abrupt regulatory halt to the company’s $37 bln IPO speaks to Beijing's waning tolerance for the clout wielded by online titans. Alibaba, Tencent and others have avoided the competition and privacy concerns dogging their Western counterparts. That could all be about to change.
Hostile Japanese deal has a lot to hammer out 5 Nov 2020 Furniture retailer Nitori is planning an unsolicited $2 bln takeover bid for DIY chain Shimachu, which has backed an offer from rival DCM. This sort of aggressive M&A is a welcome change in a clubby country. Destroying value in the process, however, might set back the movement.