Boeing gets off easy as life grows harder 8 Jan 2021 The 737 MAX maker is paying $2.5 bln to settle U.S. criminal charges tied to crashes, with over 70% going to airline customers. Other companies have been hit with steeper fines and heavier oversight for lesser offenses. The penalty looks light, but Boeing only can afford so much.
Roblox float seeks to share public-listing love 7 Jan 2021 The gaming platform scrapped its IPO for a direct listing of its shares. That’s an easier financial decision with $520 mln of new funds raised at a valuation of nearly $30 bln – more than 7 times its worth a year ago. But it also offers more stakeholders a chance to participate.
Viewsroom: Siege of the Capitol, Where’s Jack Ma? 7 Jan 2021 The violent occupation of Congress by protesters contesting Donald Trump’s loss of the presidency puts America’s financial safe-haven status to a major test, John Foley tells Rob Cox. And Pete Sweeney weighs in from Hong Kong on the mystery of the Alibaba founder’s whereabouts.
ViacomCBS is stuck between blockbuster and indie 7 Jan 2021 The $22 bln media group is selling Simon & Schuster. Boss Bob Bakish should keep the M&A book open. Disney’s streaming success is turning the screws on rivals with less content and scale. Despite recently reuniting two companies, ViacomCBS needs to be either bigger or smaller.
Team Trump should be an ESG red flag 7 Jan 2021 It’s common for former U.S. officials to pop up on company boards. But cabinet members who stuck by the president as he rejected the election result can’t be relied on to respect the will of shareholders. Investors who value governance should ensure the revolving door stays shut.
Yellen can kick off Biden’s more open government 7 Jan 2021 The $7 mln the former Fed chief earned giving speeches to Wall Street and other firms could haunt Janet Yellen as Treasury secretary. For one, she’ll need progressives to back her policies. Transparency, like releasing transcripts of those talks, could help set the right tone.
Chancellor: Year of extraordinary popular delusion 7 Jan 2021 The pandemic hasn’t just provoked irrational fears; a great speculative fervour also appeared. And the froth of the year of Covid-19 in financial markets exhibits three of the conditions described in Charles Mackay’s classic book on the inflation of speculative bubbles.
Atos CEO’s risky lunge for DXC could add up 7 Jan 2021 Elie Girard approached $7 bln U.S. rival DXC Technology about a deal. At almost three-quarters of its market value, and with the French group still digesting past deals, DXC looks like a lot to swallow. But the math may work, and Girard’s go-it-alone plan is dull by comparison.
Corona Capital: Video rental stores, Conagra 7 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: A last surviving U.S. video rental chain shutters, Conagra’s boosted sales aren’t enough for investors.
LafargeHolcim’s U.S. deal is an overdue Plan B 7 Jan 2021 The $36 bln Swiss cement maker’s 2015 merger hasn’t really worked. Branching out into roofing by acquiring the U.S. division of Japan’s Bridgestone for $3.4 bln could pay off if a stateside stimulus spurs infrastructure spending. But LafargeHolcim’s bet looks relatively pricey.
Rome’s UniCredit M&A gift is of questionable value 7 Jan 2021 The lender’s shares rose after Reuters said the government may absorb 14 bln euros of its dud loans to ease a Monte dei Paschi merger. It makes a deal with the basket-case bank more palatable. But UniCredit investors should care more about legal risks and future government sway.
Forces lowering euro zone inflation aren’t all bad 7 Jan 2021 Euro zone consumer prices fell 0.3% in December from a year ago. Several factors, especially a weak economy, are to blame. Still, a long-term trend that also chips away at inflation is cheaper tech. That’s not something even ECB chief Christine Lagarde would want to see reversed.
A big Chinese backer would be roll of dice for MGM 7 Jan 2021 Investor Snow Lake wants the casino operator to sell 20% of its $6 bln Macau business to a local buyer. There are merits to the idea, including the edge it could provide for a new licence in the world’s biggest gambling hub. It would also, however, complicate other deals.
Cleanup peeks through India’s distressed deal mess 7 Jan 2021 Competing $5 bln bids from Oaktree and Piramal for collapsed housing lender DHFL look closely matched on a mix of criteria. Missed deadlines and mudslinging have marred the process. And yet better recovery rates and a jailed tycoon are good signs for the young insolvency regime.
America’s safe-haven status gets violent test 6 Jan 2021 An invasion of the seat of government by supporters of a president who defies democratic principles ought to worry those who treat dollar assets as a sanctuary. What matters for investors is whether the U.S. system prevails. Even if it does, they should not assume it always will.
NYSE zigzag symbolizes chaotic China crackdown 6 Jan 2021 The U.S. exchange flip-flopped again and will delist three PRC telcos after all. Meanwhile a White House ban on Alipay and other apps may take effect only after the current occupant leaves. And TikTok remains in limbo. Effective curbs on Beijing take more than tongue-lashings.
Stage is set for a record year of M&A 6 Jan 2021 S&P Global, AstraZeneca and Salesforce helped push fourth-quarter deal volume over $1 trln. Flush balance sheets and ultra-cheap money add momentum. So do CEOs struggling to find growth on their own. Regulators could get tougher, but the 2015 peak of $4.2 trln is within reach.
Walgreens $6.5 bln deal is a mutual back-scratch 6 Jan 2021 AmerisourceBergen is buying the drug chain’s European distribution business, in what amounts to a relatively attractive way to expand internationally. Walgreens gets a slug of cash – and CEO Stefano Pessina gets one step closer to one day potentially taking the company private.
Bad auditors need to be fined like bad lenders 6 Jan 2021 Deloitte’s 15 mln pound fine for poor audits of software company Autonomy is light punishment given shortcomings laid out in a new report. The UK’s oversight regime is being overhauled. But doling out heftier bank-style fines is the surest way to shift behaviour.
Qualtrics’ German parent will SAP its IPO value 6 Jan 2021 The survey maker’s float coincides with sky-high multiples for software peers. Its high revenue growth rate could in theory merit a price tag of $20 billion or more. Yet a potentially meddlesome controlling shareholder in European behemoth SAP argues for a hefty discount.
Corona Capital: U.S. college football 6 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: U.S. college football programs are in a talent arms race for coaches, a bit like companies' quest for top-ranked CEOs, despite the pandemic's impact on revenue.
Georgia vote may give companies half-full glass 6 Jan 2021 Democrats could eke out a Senate majority in a runoff race that’s too close to call. The slim margin would hand more power to moderates on issues like green energy and taxes, in turn helping offset greater scrutiny of firms. Either way, Corporate America can avoid the worst.
Hong Kong puts business on notice with roundup 6 Jan 2021 Police arrested over 50 opposition candidates and a U.S. lawyer in dawn raids linked to an unofficial primary race. Banks and brokerages can mostly shrug it off, but for media and tech firms that host or transmit any exchange of ideas in the city it’s the dawn of a riskier era.
Saudi gets a partial brand detox with Qatar thaw 6 Jan 2021 Ending Riyadh’s three-year embargo with Doha gives both states a minor economic boost. It also removes one of U.S. President-elect Joe Biden’s Saudi-related headaches. But its main benefit could be to reduce the extent to which foreign investors see the kingdom as kryptonite.
China takes clumsy swipe at sloppy credit ratings 6 Jan 2021 Dagong Global has been ordered to help repay bondholders in a construction company that defaulted on over $200 mln. Courts are understandably getting tough with so much unpaid debt by top-rated issuers. This sort of punishment, however, will lead to fewer not better assessments.
Li Ka-shing buybacks would rebuild value 6 Jan 2021 Cash is rolling in from $28 bln CK Hutchison’s restructuring of European and Canadian assets. The Hong Kong billionaire’s ports-to-pharmacies group plans to repurchase stock. With deal-making curtailed by geopolitics, shareholders will appreciate the gesture.
Bitcoin offers economics lesson, if little else 5 Jan 2021 The cryptocurrency’s value has more than quadrupled in 12 months. Volatility makes it a lousy currency, though, and its usefulness remains marginal. The epic price rise is a textbook case of Fed-fueled, Tesla-like speculative demand meeting scarce supply.
IPO cheerleader trend deserves zero cheers 5 Jan 2021 Pre-IPO endorsements from potential investors like BlackRock have helped produce big pops in recent U.S. debuts like C3.ai. These resemble the cornerstone investments seen in Asia, but without the shared risk. Such sweetheart deals are the last thing a frothy market needs.
The Exchange: The personal risks in short-selling 5 Jan 2021 Muddy Waters shorted stocks like health provider NMC and forest plantation group Sino-Forest, aiding their collapse. But founder Carson Block tells Dasha Afanasieva he almost quit due to the stress of facing a criminal investigation. For him, politics may be an alternative path.
Dixon: How to make COP26 climate summit a success 5 Jan 2021 Politicians and markets increasingly get the danger of climate change. And technology is advancing fast. But the climate is also deteriorating rapidly. Here are six things that can be done at this year’s summit to make sure the planet doesn’t lose the race against time.