Review: How drug money cost a family its name 23 Apr 2021 Purdue Pharma set in motion an opioid epidemic which killed nearly half a million Americans in 25 years. Patrick Radden Keefe’s “Empire of Pain” shows how the Sacklers repeatedly used the same tactics to harm society and reap over $10 bln. The clan’s only damage is reputational.
Capital Calls: The $2 trln toybox 23 Apr 2021 Concise views on global finance: Mattel’s 47% sales growth tees up a spree of discretionary spending, as American consumers raid pandemic savings.
EQT pays an electrifying price for U.S. bus ride 23 Apr 2021 The Swedish buyout group is acquiring two of travel operator FirstGroup’s North American units for $4.6 bln. It’s a punchy valuation. To earn a decent return, EQT will have to boost growth by converting the iconic yellow school bus network into a fleet of clean electric vehicles.
Panasonic’s $7 bln deal will leave investors blue 23 Apr 2021 The Japanese group is paying a pricey 33 times forecast EBITDA for Blue Yonder, its biggest acquisition in a decade. The target's expertise in supply-chain software and steady stream of subscription sales are appealing, but the implied return on investment is a huge downer.
Corporate “flywheel effect” is mostly bad spin 23 Apr 2021 Management guru Jim Collins coined the term 20 years ago to describe how great companies gradually improve. Now groups from fintech Allfunds to online retailer Wish claim it works for them. Given the later troubles faced by Collins’ case studies, new fans might consider a U-turn.
India’s pandemic hell could be purgatory 23 Apr 2021 There is hope rising immunity and the country’s massive vaccine industry will bring a rapid end to the misery brought about by a terrifying second wave of contagion. New Delhi has little room to act if the economy follows hospitals into a state of collapse. Cracks are visible.
U.S. ruins Japan Inc’s flirt with China 23 Apr 2021 A 3.7% stake sale by e-commerce group Rakuten to Shenzhen-based Tencent is under joint scrutiny by Tokyo and Washington. As Japan’s stance against China hardens under American pressure, a nascent rising trend in Chinese investment in the country may be cut short.
U.S. $360 bln tech investment gap needs mending 22 Apr 2021 That’s how much more Beijing is spending, relative to GDP, on R&D. A plan from Congress to increase investment, particularly in tech, helps bridge the gap. But China has been ramping up over decades as the U.S. has cut. Without more, America will get woefully behind.
SPAC ticket deal is a bet on pent-up partygoers 22 Apr 2021 LA Dodgers owner Todd Boehly’s blank-check firm is buying ticket merchant Vivid Seats in a $2 bln deal anticipating a surge in concerts and sports games. Rival Live Nation’s rising market value also augurs a financial fiesta. Cash should help Vivid Seats claim a front-row seat.
Biden’s biggest climate threat is U.S. politics 22 Apr 2021 An environmental confab of 40 world leaders returns America to the global stage. Rivals like Xi will attend, though some pledges may be vague. Given Joe Biden’s predecessor showed how easily U.S. vows can be undone, his task is to make promises stick before power shifts again.
Magic mushroom model is more service than pharma 22 Apr 2021 The fungi’s ingredient psilocybin has effectively treated depression and other ills. Startups like Field Trip jumped to develop patentable versions of the naturally occurring drug. Cutting trips from four-plus hours helps, but pricey therapist-shamans remain the key cost driver.
Capital Calls: Chubb and Hartford, Swimming pools 22 Apr 2021 Concise views on global finance: The company led by Evan Greenberg twice raised its bid for its Connecticut rival, but so far to no avail; a blowout quarter for private-pool maker Pool Corp points to buoyant wealth and spending trends, but only for some.
Viewsroom: The Super League’s short, unhappy life 22 Apr 2021 The richest European soccer clubs, including Juventus and Real Madrid, swiftly aborted plans to create a breakaway competition. But as Liam Proud and Peter Thal Larsen explain, the financial appeal of a U.S.-style sporting cartel remains irresistible. Plus, Huarong’s woes.
Credit Suisse’s safer future poses returns dilemma 22 Apr 2021 The Swiss bank is raising $2 bln of capital and clamping down on risk. It’s the right move following recent blowups. But it undermines CEO Thomas Gottstein’s strategy to boost growth and returns. A major rethink under incoming Chair António Horta-Osório is even more urgent.
Negative UK power prices bolster hydrogen hype 22 Apr 2021 British electricity prices are falling into the red more often due to wind farms cranking up output on blustery days. As with crude oil’s shock slump last year, it’s a sign of power markets working, not breaking. It also helps justify lofty valuations for hydrogen-related firms.
Anta bets Chinese shopping nationalism won’t last 22 Apr 2021 The controlling shareholder of the sportswear company will pocket $1.5 bln from a 30% share rally after consumers threatened boycotts of Western brands critical of Beijing’s Xinjiang policy. It’s smart timing by struggling Anta; patriotic outrage is a fickle sales driver.
China medical IPO comes with health warnings 22 Apr 2021 Tencent-backed We Doctor boasts the country's first e-hospital offering online consultations and more. A mooted $12 bln valuation looks punchy next to rivals focused on lucrative drug sales. We Doctor's mounting losses and untested business model may give investors heartburn.
Michigan plows pragmatic path on infrastructure 21 Apr 2021 Governor Gretchen Whitmer has started rebuilding the U.S. state’s crumbling roads despite political opposition. Employment is up, and her popularity is solid. Infrastructure spend shouldn’t hinge on short-term political gains, but without them long-term gains won’t happen either.
Jamie Dimon is the stone in green investors’ shoe 21 Apr 2021 The JPMorgan boss runs the biggest fossil fuel financer and is one of the few bankers to spurn Mark Carney’s new group of net-zero pledgers. A strong share-price performance and ample profit buy Dimon leeway. They also set his bank up as the ultimate challenge for ESG activism.
Industry roll-up turns screws on Verizon 21 Apr 2021 Competition is fierce even after the field went from four to three bigwigs. The $240 bln telco lost more subscribers than expected last quarter. That eliminates antitrust worries about the T-Mobile US-Sprint deal. But in capital heavy industries, size is punishing in other ways.
Canada hits Bank of Japan’s problem at warp speed 21 Apr 2021 The Canadian central bank will trim bond purchases due to better economic prospects. Another factor may be that after a year of buying, it owns nearly the same share of its sovereign debt as Japan built up over two decades. This reduces room to support growth in the future.
Guest view: Getting finance in shape for COP26 21 Apr 2021 The $100 trillion required to decarbonise the world economy by 2050 won’t materialise without the financial sector. But banks, insurers and asset managers need a single set of standards to assess their net-zero ambitions. That’s now happening, write Mark Carney and Nigel Topping.
Capital Calls: U.S. antitrust, Dyal-Owl Rock 21 Apr 2021 Concise views on global finance: Would-be U.S. trustbuster nominee Lina Khan suggests it’s not just tech companies to blame for Big Tech’s dominance; two U.S. investment firms’ planned merger and sale to a blank-check company has cleared a legal hurdle.
Soccer’s Super League zombie will rise before long 21 Apr 2021 The breakaway competition is on life support after six English teams pulled out. Yet the financial logic of a U.S.-style sporting cartel remains irresistible for the owners of clubs like Real Madrid and Manchester United. Barring a regulatory crackdown, the idea will return.
European chips champion is puzzle for M&A bankers 21 Apr 2021 The region’s leaders fret about their collective semiconductor shortcomings. An $85 bln union of Infineon and STMicroelectronics would bring heft, plus cost savings to mollify investors. The hard part is getting France and Italy to agree a structure that preserves their pride.
Piraeus faces Sisyphean task to end Greek tragedy 21 Apr 2021 The Athens-based bank wants to raise 1.4 bln euros to speed up bad debt sales. New shares sold at a steep discount to book value imply juicy upside if CEO Christos Megalou hits near-term profit goals. A history of capital hikes plus rocky GDP growth make it an uphill struggle.
New Zealand blends specially bright shade of green 21 Apr 2021 The United States and China are vowing to work together on decarbonisation. JPMorgan and Citi raised their sustainable-finance goals. Investors are pushing harder, too. A Kiwi plan to force banks and money managers to come clean about climate risks neatly ties it all together.
Huarong foreign bondholders get sweet nothings 21 Apr 2021 The market is stabilising around the troubled bad debt manager holding $21 bln in dollar bonds. Its key offshore unit says it has returned to profit; Beijing notes Huarong has adequate liquidity. It’s better than silence but thin gruel for a relief rally.
Netflix’s performance has just enough chill 20 Apr 2021 Shares fell 10% after the video-streaming firm nabbed fewer subscribers in the first quarter. It suggests that the pandemic bonanza is over. But Netflix has plenty of room to take share away from TV. Improving cash flow and a lower stock price tone down valuation, too.
New SEC boss’s SPAC work is already partly done 20 Apr 2021 Days after being sworn in, Gary Gensler can claim a sharp slowdown in new blank-check company floats and in the pace of SPAC dealmaking. Both reflect public warnings from the U.S. watchdog’s staff in recent weeks. Now comes the hard part of separating good features from bad.