Textbook supplier Chegg flunks terminal-value test 2 Nov 2021 A 48% collapse in the educational book-rental company’s shares – after it cut its sales forecast by just 6% – might seem draconian. Chegg’s misfortune shows how, for companies betting on long-term demographic trends, small shifts in assumptions can trigger huge changes in worth.
Stablecoin watchdogs suffer from own complexity 2 Nov 2021 U.S. regulators want Congress to make issuers of dollar-linked tokens, such as Tether, toe the line like banks. Rules for digital assets could in various ways both legitimize and crimp them. But it’s a bewildering task, not helped by a similarly distributed system of regulation.
DuPont financial tinkering comes at too high price 2 Nov 2021 The chemical giant’s $5 bln purchase of peer Rogers is a logical attempt to shift its focus to future-proof industries. It looks to be overpaying, though, which risks destroying value for shareholders – much like the years of buys, spinoffs and sales that preceded it.
Capital Calls: KKR, Ferrari, HelloFresh 2 Nov 2021 Concise views on global finance: The private equity company is making the most of ideal market conditions; the Italian sports car maker raises its guidance; and a positive sales update turbocharges the German meal-kit delivery firm’s share price.
EU-U.S. green steel deal shows way for COP26 2 Nov 2021 Washington and Brussels will set a common external tariff for dirtier types of the metal. It’s similar in effect to the EU’s carbon border levy, with less of the grief. The lesson for Glasgow negotiators is that sector-based deals may be a safer bet than big multilateral ones.
Unilever’s tea makes for a tasty buyout brew 2 Nov 2021 The Dove maker is selling brands like PG Tips and Pukka, worth perhaps 4 bln pounds. Bringing sales to a proper boil could give private equity giants like Carlyle or Advent an invigorating 19% return. CEO Alan Jope’s struggling personal care lines may not hit the same sweet spot.
Chinese IPOs return to New York with a whimper 2 Nov 2021 LianBio, the first Chinese company to float in the city since Didi’s catastrophic listing, fell 14% on its debut. It touts a Cayman Islands domicile and U.S. backers but most of its business is in the People's Republic. Investors who once loved such hybrids distrust them now.
Temasek’s mixed loyalties muddy poor $2.5 bln deal 2 Nov 2021 A group ultimately controlled by the state fund has floated a cash offer for Singapore Press, edging past a complex bid by conglomerate Keppel, of which Temasek also owns 21%. Topping a soft offer is fine but meddling in its holding’s M&A raises questions about the end goal.
Central bankers’ word is no longer their bond 1 Nov 2021 The Reserve Bank of Australia has for several days stopped defending a debt yield target. Such unreliability makes asset prices jumpier. Breaking faith is especially unadvisable when high inflation means rate-setters need markets and the public to trust them more than ever.
Goldman gets associate membership of SPAC mafia 1 Nov 2021 The Wall Street bank sold some of its clients a structured note that lets them dabble in blank-check vehicles in the way specialist hedge funds do, with near certain returns. Because Goldman offers financing and keeps gains above a threshold, it is playing the game itself too.
Coke dons extra armor in fight against Pepsi 1 Nov 2021 The soda company is leveling the playing field by buying the rest of sports drinks maker BodyArmor that it doesn’t already own for $5.6 bln. The fast-growing brand helps Coke grow in a category dominated by PepsiCo’s Gatorade, just as beverage sales are picking up again.
Airlines’ net-zero pledges fly on fumes 1 Nov 2021 Aviation accounts for only 2.5% of global emissions and technologies to help operators decarbonise appear numerous. Yet batteries, hydrogen, biofuels and e-kerosene all have big practical challenges and are too pricey. The risk for airlines is anxious states clipping their wings.
Jes Staley strengthens Barclays by leaving 1 Nov 2021 The American is exiting the UK bank after a regulatory probe into his relationship with sex offender Jeffrey Epstein. His six years as CEO brought better results but repeated questions over his judgment. New boss C.S. Venkatakrishnan will target the same strategy with less drama.
Russian IPO is carsharing model’s crash test dummy 1 Nov 2021 Delimobil, which is listing in New York, maintains a fleet of 18,000 cars for short trips. It’s fast-growing and EBITDA positive, helped by municipalities offering cheap parking. Its model can accelerate in richer countries, but only if taxes make owning a car too expensive.
Capital Calls: Darktrace’s stock wobble 1 Nov 2021 Concise views on global finance: The UK cybersecurity group’s share plunge reflects both short- and longer-term problems.