Cobalt angst will turn carmakers into mine owners 10 May 2021 The chip shortage has taught auto groups harsh lessons in supply chain security. Cobalt’s importance to batteries is an existential risk for firms like Tesla and VW. Equity stakes in mines, rather than supply deals, would ease delivery headaches and hedge against price spikes.
Star tempts Crown with riskier game of chance 10 May 2021 The Aussie casino operator is proposing an all-stock merger valuing its larger rival at $7.1 bln, including synergies. The deal is loaded with iffy assumptions about benefits that would take time to materialise. Even so, Blackstone will be pressured to sweeten its cash bid again.
Capital Calls: Sabers down for Project JEDI 10 May 2021 Concise views on global finance: The Pentagon may end the $10 billion cloud project to consolidate U.S. military data after exhausting worse options.
India’s food delivery IPO arrives lukewarm 10 May 2021 Unprofitable Zomato is charging higher delivery fees and cutting discounts. At the same time, the pandemic hasn’t catalysed fortunes for the Ant-backed firm the way it did for peers such as U.S.-based DoorDash. That makes a $5.4 bln valuation from February look stuffed full.
Squarespace float brings tech deals full circle 7 May 2021 The website-building platform can easily justify a $10 bln valuation in its direct listing. A profitable history suggests it can appeal to investors without IPO underwriters, too. There are wrinkles, like an entrenched founder. Overall, though, it’s on-brand for a tech deal.
Capital Calls: U.S. jobs miss, Elon Musk goes live 7 May 2021 Concise views on global finance: Fed boss Jay Powell has his work to do as America adds far fewer jobs than anticipated; drawing an audience of crypto-nerds, Tesla gearheads and regulators won’t be hard for the electric-car maker boss when he hosts SNL. Drawing laughs will be.
Review: A better way of valuing the world 6 May 2021 The pandemic is one of three crises that Mark Carney dissects to show how market prices can fail, to society’s detriment. He suggests solutions in “Value(s)”. Better still, the former central banker is trying to practice what he preaches with his work on climate change.
CEO candor would help destigmatise mental health 7 May 2021 Many companies are mercifully taking stress and other psychological ailments more seriously. Few bosses discuss personal struggles, however, the way incoming Credit Suisse Chairman António Horta-Osório has. There’s a lot to gain from employees, and the top brass, from opening up.
Winner-takes-most electric car bet risks collision 7 May 2021 Tesla and Volkswagen shares have leapt as they steal a lead in the booming market for battery vehicles. Yet meeting supercharged expectations implies they will need to hold a market share of nearly 40% by 2025. Rivals’ zero-emission goals will make such dominance unlikely.
Macquarie will struggle to match market exuberance 7 May 2021 The Australian banking and investment powerhouse earned a record A$3 bln in its latest financial year. CEO Shemara Wikramanayake runs a tight and well-balanced ship. That deserves a premium, but a 14% return on equity doesn’t justify a stock price of 2.6 times book value.
SEC battles slow bureaucracy and fast technology 6 May 2021 Gary Gensler told Congress he has Robinhood, Citadel Securities and others in his sights and is reviewing matters from gamification to short selling to market structure. He has ambitious goals, and his history at the CFTC says he can accomplish them. But time isn’t on his side.
David Swensen’s Yale model is tough to follow 6 May 2021 The architect since 1985 of the Ivy League university’s $31 bln endowment has died. His early belief in alternative, uncorrelated assets and top-ranked returns changed the industry. Swensen’s long-term outlook and relative lack of greed make him particularly hard to replace.
E-book: Art of the SPAC 6 May 2021 More than 300 blank-check companies listed already in 2021, and they have struck deals worth nearly $300 bln to buy some 130 targets. It’s a record by miles, but Breakingviews has been on the case for more than a decade. A new e-book tells the story so far, and how it might end.
Viewsroom: Detailing the artistry of the SPAC 6 May 2021 Though special purpose acquisition vehicles are nothing new, the recent boom in fundraising and dealmaking has provided fertile hunting grounds for Breakingviews columnists. Lauren Silva Laughlin and Richard Beales walk through their new compilation “The Art of the SPAC.”
The art of the SPAC: from sublime to ridiculous 6 May 2021 More than 300 blank-check companies listed already in 2021, and they have struck deals worth nearly $300 bln to buy some 130 targets. It’s a record by miles, but Breakingviews has been on the case for more than a decade. A new e-book tells the story so far, and how it might end.
Biden’s vaccine shift has risky side effects 6 May 2021 The U.S. president backed waiving intellectual property rights for Covid-19 jabs to help crisis-torn countries. Yet a shortage of ingredients and manufacturing challenges mean the move may not boost supply much. And it may hurt investment in remedies during the next pandemic.
AB InBev’s new CEO will inherit debt hangover 6 May 2021 The $120 bln brewer picked insider Michel Doukeris to replace Carlos Brito. He’ll lead a shift to investing in brands, away from the M&A and cost control that defined his predecessor’s 15-year tenure. Any stumbles will threaten AB InBev’s plan to halve net debt of 4 times EBITDA.
Green shoots’ salad days have come and gone 6 May 2021 Toppy valuations for wind and solar sparked Italy’s Eni, Spain’s Acciona and others to hire investment bankers for spinoffs and IPOs of renewables assets. Rising oil prices and fears of a green bubble mean firms now need size and a track record to play. That’s a good thing.
Nintendo half-heartedly looks beyond games 6 May 2021 After a bumper year, the Japanese giant expects its next annual operating profit to drop 22% to $4.6 bln. Peak Switch also means console sales are due to fall. A new theme park and Super Mario film are promising, but boss Shuntaro Furukawa is dragging his feet on bolder ideas.
Thailand previews difficult life without tourists 6 May 2021 The country looks ill-prepared for its fresh wave of viral contagion. With a slow vaccine rollout, foreign visitors won’t return anytime soon. It needs to wean itself off this economic crutch, but political unrest deters overseas investment. That’s a trying combination.
Meatless Manila IPO offers something to chew on 6 May 2021 Quorn owner Monde Nissin is set to go public. But its control of the Beyond Meat rival has so far been only a side dish in the vegan alternatives boom. The real protein supporting a properly cooked $5 bln valuation is the company’s Philippine snacks unit.
Capital Calls: KKR 6 May 2021 Concise views on global finance: The private equity firm is investing in Charter Next Generation in an employee-friendly deal.
Uber’s path to profitability runs through rides 5 May 2021 Food-delivery sales helped plug holes left by a 65% decline in revenue for the rides division. Yet carting people has been profitable through the pandemic while delivering food has not. As the recovery takes hold, the app’s core business will put it in the black.
Apple’s App battle has only slightly epic ending 5 May 2021 A ruling against the $2 trillion tech behemoth in the case brought by video game company Epic could optically be bad for Apple and have global implications. But even if App Store sales fall in half, it would shave just 3% from Apple’s market value. Being a giant has privileges.
EU boxes smart in bout with Chinese behemoths 5 May 2021 Competition tsar Margrethe Vestager wants to stop state-sponsored foreign firms from buying European rivals. It’s a good way to protect industries while resisting mergers like Siemens-Alstom. But ensuring a level playing field isn’t enough to develop high-tech sectors like chips.
Facebook Trump ruling is step towards consistency 5 May 2021 An oversight board upheld the $900 bln social network’s ban on the former U.S. president, its biggest call to date. As in other cases, it's a transparent decision, but it applies only to Facebook – a reminder that Washington has not yet grappled with content limits for Big Tech.
The Exchange: The green transition’s financing gap 5 May 2021 Plenty of capital is focused on creating the next Tesla. Less is directed towards medium-sized players doing vital but less flashy stuff like insulating buildings. Tikehau Capital co-founder Mathieu Chabran tells George Hay how some asset managers are stepping into the breach.
Africa’s digital payments race becomes a scramble 5 May 2021 The pandemic has brought the region’s mobile-based money networks and their 159 mln users to a crossroads. Airtel and MTN may spin off their payment arms. Banks and card giants like Mastercard are joining in. The victors will hold sway over an increasingly cashless continent.
GSK CEO’s best defence is a graceful exit 5 May 2021 The $93 bln drug company is under pressure after activist Elliott took a stake. Boss Emma Walmsley is splitting the group into two, but its struggling pharma unit faces a lengthy turnaround, and may benefit from a new leader. Walmsley could run the new consumer business instead.
Capital Calls: Peloton, Honest Co, Office Depot 5 May 2021 Concise views on global finance: Treadmill recall leaves investors in the workout app stranded; shares in Jessica Alba’s consumer packaged goods company opened more than 30% above their IPO price; the office-supply company paper-shuffles its way to a higher valuation.