Hasbro breakup is the monster under the bed 18 Feb 2022 An activist wants the toymaker to spin out the division that holds card game “Magic: The Gathering”. The alternative is for incoming CEO Chris Cocks to revive a plan to become a Disney-like media empire. Cocks deserves a chance, but the allure of a carve-up sets him a high bar.
Review: PayPal alumni’s age of innocence 18 Feb 2022 Elon Musk, Peter Thiel and several other entrepreneurs cut their teeth at the payments firm. “The Founders” follows its birth and the network it spawned, embodying the best of scrappy tech culture. Its human insight contrasts with the larger-than-life moguls they have become.
EDF minorities’ cash better off in their pockets 18 Feb 2022 The 25 bln euro French energy group is raising 2.5 bln euros via a rights issue to plug holes left by plant outages and state interventions. EDF is integral to France’s nuclear power ambitions. But its issues give ample reason for non-state investors not to plough in more money.
Allianz’s U.S. fund misery is only half over 18 Feb 2022 Europe’s largest insurer has set aside $4.2 bln to compensate savers for complex derivative bets that went wrong. The figure, less than the $6 bln claimed, looks positive for shareholders. But with so much extra cash, U.S. regulators may impose a heftier fine to even things out.
Shackled woman’s plight helps China find S in ESG 18 Feb 2022 Uproar over a mother found chained in a shed, a suspected trafficking victim, has the financial blogosphere in a rage as some call for a boycott of the local government’s bonds. A capital movement targeting social injustice could move prices, but only if Beijing lets it.
Capital Calls: DraftKings, Shake Shack, Fanatics 18 Feb 2022 Concise views on global finance: The online gambling firm predicts fast growth but heavy losses; the U.S. burger chain had disappointing earnings yet its valuation is sky-high; the sports merchandiser teams up with Jay-Z to buy a streetwear firm for a song.
Palantir needs profit, not pomposity 17 Feb 2022 CEO Alex Karp says he built the software firm for the U.S. war-fighter, and secondarily for the “glory of humanity”. Rhetoric and revenue growth might have been sufficient when animal spirits were high. Now investors just want to know when the 18-year-old firm will turn a profit.
Walmart’s trusty talent is less use in new domain 17 Feb 2022 The $375 bln company’s stronger-than-expected sales and profit are testament to its ability to manage inflation and supply chain pressures. A push into advertising and subscriptions is taking the retailer closer to Amazon’s turf. It will be harder to shine in this territory.
Goldman Sachs ups ante in banking game of thrones 17 Feb 2022 CEO David Solomon boosted his main shareholder return target. If the market gives the Wall Street firm credit, it might narrow a valuation gap with chief rival Morgan Stanley. But both are counting on the rift between haves and have-nots, on Wall Street and beyond, growing wider.
Oligarch sanctions with teeth may yet lack bite 17 Feb 2022 Britain has widened the ways rich Russians can effectively be banned from its shores via sanctions. While less bad than the worst U.S. strictures, they would make life much harder for Russia’s top companies and their overlords. But only if the UK actually uses its new powers.
Kering gets dressed up for elusive mega-deal 17 Feb 2022 François-Henri Pinault’s luxury powerhouse is boosting sales and profit, thanks to star brand Gucci. That, plus a robust balance sheet, means the $90 bln group is well placed to splash out on a deal. The snag is that there are few obvious targets, raising the risk of overpaying.
Viewsroom: Ukraine, ECB and India’s giant insurer 17 Feb 2022 Worries about an invasion of Ukraine have rattled markets, but Dasha Afanasieva says Russian investors are more sanguine. The European Central Bank faces a tougher inflation juggling act, argues Swaha Pattanaik. And Una Galani discusses the listing of India’s Life Insurance Corp.
StanChart’s modest targets risk becoming a mirage 17 Feb 2022 CEO Bill Winters is aiming for a 10% return on equity by 2024, having failed to hit the same goal in his first seven years in charge. Rate hikes will help this time, but the plan hinges on aggressive growth hopes. Winters may have to consider more radical cost cuts and disposals.
Reckitt baby food is problem child best kept home 17 Feb 2022 Offloading the sluggish Enfamil unit would boost the Nurofen maker’s growth. But rivals Nestlé or Abbott would face regulatory hurdles, while a buyout group would probably pay less than the unit’s 5.4 bln pound book value. CEO Laxman Narasimhan is better off holding on.
Capital Calls: Continental split 17 Feb 2022 Concise views on global finance: The $20 bln German auto supplier is eyeing a four-way separation, according to a report.
Aussie coal exits put dithering government on spot 17 Feb 2022 Origin wants to shut the country’s largest plant powered by the fossil fuel seven years early, following rivals’ lead. It drew ire from the ruling coalition, whose green-transition plan is lacklustre. Renewables have won the economic fight; the political battle is a slower burn.
Chinese e-commerce IPO hawks an Alibaba antithesis 17 Feb 2022 Huitongda mainly sells electronics and fertiliser to wholesalers in rural areas. It's a low-margin and simple business compared to the expansive shopping empire run by its large backer. Amid the tech rout, the $3 bln company's Hong Kong stock sale ticks some of the right boxes.
Paramount’s streaming revamp is an uphill struggle 16 Feb 2022 ViacomCBS is rebranding to emphasize the media group’s Paramount+ service, which has 33 mln subscribers. Content costs are ballooning just as investors grow skittish about leader Netflix’s growth. A 20% share price drop on Wednesday widens the valuation gap with larger rivals.
Shopify plays to one trend, bucks another 16 Feb 2022 The Canadian e-commerce firm’s shares fell after it said it’s shifting towards a more Amazon-like model of operating warehouses. Having surfed the online shopping wave, Shopify risks losing investors who have chased the asset-light tech craze too.
Roblox metaverse premium gets real-world downgrade 16 Feb 2022 The gaming platform attracted more users in January, but nearly flat bookings of virtual currency knocked 25% off its shares. Video games can be faddish, and kids’ obsessions even more so. Doubt about Roblox’s ability to turn attention into cash merits a more mundane valuation.
Biden’s bungled Fed pick symptom of larger disease 16 Feb 2022 The U.S. president’s central bank nominee is a climate stalwart, prompting Republicans to boycott a vote. A pattern of drafting political candidates for non-partisan outfits, like the FTC, is emerging. It’s counterproductive and can also widen agency mandates in dangerous ways.
Rich stocks have yet to feel cost-of-living crisis 16 Feb 2022 Rising inflation and higher energy bills are hitting consumers. UK punters in particular look vulnerable, given uneven savings and tax hikes. Mass belt-tightening could mean fewer holidays and less spending on luxuries like streaming, hurting companies from Ryanair to BT.
Capital Calls: Theme park M&A, Energy IPO 16 Feb 2022 Concise views on global finance: Cedar Fair rebuffed a takeover offer from rival amusement park operator SeaWorld, but other buyers may be reluctant to join the ride; The $8 bln Vaar Energi, majority owned by Italy’s Eni, sees its shares dip on their first day of trading.
Ericsson’s ISIS fallout could go beyond big fines 16 Feb 2022 The Swedish telecoms group says it may have made indirect payments to Islamist militants in Iraq. That’s way worse than the brown envelopes it sent in places like Vietnam that cost $1 bln in fines. Besides harsher U.S. penalties, Ericsson may find life tougher in its key market.
Aussie climate M&A deal offers best of both worlds 16 Feb 2022 ANZ is taking a small stake in climate-change advisory and investing startup Pollination for $50 mln. The bank gets business acumen in a hot sector and its partner can offer clients access to a big balance sheet. The price reflects the scarcity value of green talent.
India ramps up the cost of Chinese cash 16 Feb 2022 New Delhi is determined to curb Beijing’s influence in its tech sector. For local startups like Paytm and Zomato, unwinding Chinese investment is a pain. Foreigners like Singapore’s Sea may face a starker choice: cash from the People’s Republic or access to India’s growth market.
China prices are cold comfort for global shoppers 16 Feb 2022 Factory-gate prices softened, and consumer inflation rose just 0.9% as supply shortages eased. Domestic stimulus might not change much. That’s good news for overseas customers grappling with soaring costs. But a weak Chinese economy will have less desirable knock-on effects.
Marriott and Airbnb aren’t a tale of two cities 15 Feb 2022 The $56 bln hotel chain’s revenue hasn’t fully recovered to its pre-pandemic level but is expected to grow quickly to get there by next year. Meantime Airbnb’s best growth days may be behind it. Yet the $108 bln home-sharing app’s valuation is far higher. The two need to converge.
Citi’s Jane Fraser embodies Wall Street’s pay gap 15 Feb 2022 The new CEO’s $22.5 mln package lags jumbo sums awarded to JPMorgan’s Jamie Dimon and Goldman Sachs’ David Solomon. Citi hasn’t been a great investment. But overemphasizing past returns could leave Citi the worst of both worlds: A troubled bank with a boss in need of motivation.
Intel’s Tower deal comes up strategically short 15 Feb 2022 The $200 bln chipmaker has many problems to solve. A $5.4 bln acquisition of an Israeli rival shows there are no easy answers. Tower brings key skills and industrial applications, but Intel’s tech still lags. And even tiny chip deals risk taking heaps of time and effort to close.