Dan Loeb cybersecurity IPO has winds at its back 22 Jun 2021 SentinelOne is targeting a $7 bln valuation, 100 times its worth when Third Point first invested. The fund is buying more. Connected devices and cyberattacks are both proliferating. The company is also gaining market share. If that continues long enough, the bet will pay off.
Vaccine vial maker needs to take IPO shot quickly 22 Jun 2021 Italy’s Stevanato is surfing the pandemic wave to a U.S. listing. Valued alongside high-flying medical-kit supplier West Pharmaceutical, it could be worth over $7 bln. But as the virus recedes, sales may ebb while rivals muscle in on its turf, pricking holes in the price tag.
Capital Calls: GameStop is a SPAC now 22 Jun 2021 Concise views on global finance: The meme-stock video-game retailer has raised more cash, making it look like an overvalued cash shell.
EssiLux has clear view to Dutch deal discount 22 Jun 2021 The Ray-Ban maker’s target, GrandVision, breached terms of a 7.2 bln euro takeover agreed in 2019. EssilorLuxottica can walk away, but a better option would be to negotiate a lower price. Lopping off 15% would reflect GrandVision’s weaker earnings and lack of alternative buyers.
Battery deficit risks UK driving electric jalopy 22 Jun 2021 Britain needs more so-called gigafactories to supply power for green cars, ahead of import caps and a ban from 2030 on gas guzzlers. Current expansion plans may electrify just 20% of local output from BMW, Nissan and others. Prime Minister Boris Johnson faces an uphill drive.
Chinese buyout provides instructive exit interview 22 Jun 2021 After months of talks, Japan’s Recruit is backing a $5.7 bln privatisation of employment portal 51job. Growth is patchy while rival Kanzhun’s shares have soared following its IPO. It’s a timely reminder of the occupational hazards for investors in U.S.-listed Chinese companies.
Alibaba may be Suning’s white knight in hiding 22 Jun 2021 The e-commerce giant’s 20% stake in the Chinese retailer has plunged by two-thirds in value since it bought it in 2015. The shares have further to fall as Suning faces $7 bln of debt due. Given Alibaba’s push into bricks-and-mortar commerce, a takeover could benefit both sides.
American Airlines pulls a Wall Street stupidity 21 Jun 2021 As U.S. air travel booms again, the carrier is cutting flights party due to labor shortages, something taxpayer bailouts were meant to prevent. As Merrill Lynch and other investment banks learned during previous crises, pulling the trigger too quickly on firing is a bad move.
Doctor M&A adds to U.S. healthcare code blue 21 Jun 2021 Physicians’ practices are being rapidly snapped up by hospitals, eroding one of the medical system’s few competitive features. Antitrust regulators are already studying so-called vertical integration by technology firms. In healthcare it’s less obvious, but may be more injurious.
Barry Diller’s IAC leads the spinoff sweepstakes 21 Jun 2021 The group created 11 public companies, including Vimeo and Match, worth some $100 bln for investors since the media mogul took over 25 years ago. Yet the conglomerate trades at a near-25% discount to its parts. Given the performance, investors should give IAC a bit more credit.
CNH pays hefty price for driverless tractor ride 21 Jun 2021 The Italian-American agricultural equipment group is paying $2.1 bln for Raven Industries, which makes tech for autonomous farm machines. With few cost savings, the multiple of almost 40 times EBITDA looks rich. CNH will need a big sales boost to harvest a decent return.
Capital Calls: Netflix, Flackless SPAC 21 Jun 2021 Concise views on global finance: The streaming service strikes an agreement with Steven Spielberg’s Amblin Partners; Helicopter-taxi company Blade’s phony spokesperson speaks poorly to investors.
Buyout shoppers can spend more on Morrisons 21 Jun 2021 The British grocer rejected an $8 bln bid from Clayton, Dubilier & Rice. The 30% premium looks juicy, but the private equity firm will earn a decent return if Morrisons just delivers expected sales and margins. Extra cost savings or property sales would justify a bigger trolley.
Malaysia’s $11 bln telco deal rings a softer tone 21 Jun 2021 Axiata and Norway’s Telenor are combining their local units after their bigger pan-Asian combo failed on nationalist sentiment. Some of that is still on display but the logic of a smaller tie-up is compelling and synergies ample. Equal ownership creates a fresh complication.
Iran vote makes reopening an even harder sell 21 Jun 2021 Ebrahim Raisi’s election as president means hardliners will from August control the Islamic Republic. A new deal to unwind some sanctions on the country may be signed before then. But companies that were burnt by the U.S. withdrawal from an earlier accord are unlikely to return.
Carlyle’s botched Indian lender deal is awkward 21 Jun 2021 The U.S. buyout firm’s quasi-takeover of $1.7 bln PNB Housing was halted by regulators on a technicality. The cosy plan protected state owners and side-lined minorities after fairer options failed. It’s embarrassing for star backers like Aditya Puri too. A rejig will be pricey.
China’s education crackdown flunks economics 21 Jun 2021 Tougher rules on tutoring services are hammering shares of TAL, Gaotu and others. The country’s manic competition for school admission distorts the labour supply and suppresses the birth rate. It’s a byproduct of a widening wealth gap, however. This approach could make it worse.
Airport security fast-tracker jumps the IPO line 18 Jun 2021 Clear, the U.S. firm that allows people to cut security lines for $179 a year, wants to go public. With vaccine checks on the horizon and the U.S. government as a new client, it has a promising path to fly as a public company, so long as its valuation stays in the $2 bln range.
U.S. gas tax should be guzzled while it can 18 Jun 2021 America’s truck obsession is partly due to fuel prices that are among the lowest in the world. Upping the toll could help pay for a $1.2 trln infrastructure plan. Plus combustion engines are becoming obsolete and fuel usage is falling. Lawmakers might as well seize the moment.
Review: Pandemic saga suffers from tunnel vision 18 Jun 2021 Michael Lewis explores the weaknesses in America’s response to Covid-19 in “The Premonition”. Exposing missed opportunities can offer lessons for the next outbreak. But by focusing on just one country, he risks repeating the mistakes global leaders made in tackling the virus.
Delta variant may make UK less of a virus outlier 18 Jun 2021 The pandemic hit British GDP more than that of the United States, Germany and France in 2020. An extension of UK restrictions in the face of the so-called Delta variant implies the same could happen this year. But other states are likely to have to impose fresh restrictions too.
Big Tobacco tech offers path to partial redemption 18 Jun 2021 Philip Morris is tweaking its inhalers for medical drugs, rather than recreational ones. If non-nicotine sales hit their target, the unit could be worth $5 bln. That’s tiny against the Marlboro maker’s $156 bln price tag. As a genuine health benefit, the PR value may be greater.
Capital Calls: HSBC, MRNA scramble, Cable project 18 Jun 2021 Concise views on global finance: The UK bank’s France sale disappoints; Danaher snaps up Moderna supplier for $9.6 bln; geopolitics sinks internet cable.
Green megalomania renews $80 bln Congo hydro dream 18 Jun 2021 Aussie mining magnate Andrew Forrest is behind a fresh push to turn the African river’s vast power into energy. Dam-building is a fool’s errand, though, and his Fortescue’s plan to produce hydrogen for export may not stack up financially. Less bombastic alternatives are better.
Hong Kong scion cedes hometown IPO premium 18 Jun 2021 Richard Li, the entrepreneurial son of tycoon Li Ka-shing, plans to list his pan-Asian insurer FWD in New York instead of the city where he’s a familiar face to investors. He is sacrificing both brand recognition and higher valuations. It’s a steep price for keeping more control.
CureVac’s pain may not yet have peaked 17 Jun 2021 The German drugmaker’s value halved to $10 bln after it said its Covid-19 vaccine may be only 47% effective. Investors’ concern is that its critical mRNA technology may not work as well. Separate trials on its cancer vaccine will be key to CureVac’s future health.
Wall Street’s finest take on the mighty sponge 17 Jun 2021 The $5 bln IPO of Mister Car Wash has amassed some of finance's most prestigious underwriters. No wonder: It has solid growth, is simple to understand, and shines with profit. The risk is that competition is plentiful - and includes a bucket of water and the neighbor's kid.
DraftKings’ luck tilts odds against short seller 17 Jun 2021 Hindenburg Research questioned the legitimacy of some of the online-betting firm’s business. Even if proven right, the revenue impact would be small. Like many digital stocks DraftKings looks overvalued right now. But in this market, it’s risky to bet against the momentum.
The Exchange: Hiro Mizuno 17 Jun 2021 The former chief investment officer of Japan’s $1.6 trillion Government Pension Investment Fund is now a board member at Tesla and Danone. In an interview as part of last week’s Ethical Finance 2021 summit, he tells George Hay how ESG has changed since he championed it at GPIF.
Capital Calls: JPMorgan, French SPAC, Jessica Alba 17 Jun 2021 Concise views on global finance: Jamie Dimon bulks up his nascent UK digital banking offer by buying Nutmeg; France boosts its lowly SPAC league-table position with two blank-cheque vehicles; the Hollywood star’s consumer packaged goods company Honest encounters growing pains.