Net zero woes go beyond lack of global cooperation 20 Sep 2022 The International Energy Agency frets that poor collaboration between states will keep emissions high. But the struggles of green groups like ITM Power suggest countries aren’t doing enough to help domestic markets either. Energy policy needs to do more than fight today’s crisis.
Petrodollar rush may disappoint Western financiers 20 Sep 2022 In prior energy booms, like in the 1970s, the proceeds wound up in U.S. banks and bonds. OPEC’s $907 bln haul in 2022 is smaller, and winners like Saudi Arabia need cash to pivot away from oil. Bankers may not see a developed world equities and debt bonanza on the same scale.
Capital Calls: SPAC unwind, U.S. trustbusters 20 Sep 2022 Concise views on global finance: Chamath Palihapitiya, who personified the excess of the blank check market, is returning cash in two of his vehicles. Investors in companies that went public via SPACs are the main losers. And American antitrust enforcers suffer a second court loss in a month.
Nissan’s Ashwani Gupta on the need for speed 20 Sep 2022 The arrest and escape of former Chairman Carlos Ghosn in 2019 put a harsh spotlight on the Japanese auto giant. Covid and inflation have added pressure since. In this episode, Nissan’s COO talks to Pete Sweeney about electrification, fast cars and turning the business corner.
Samsung climate inertia is by-product of Seoul’s 20 Sep 2022 The $274 bln conglomerate's 2050 net-zero goal underwhelms next to those set by Apple, Intel and others. Blame South Korea’s power-market monopoly and regressive renewable policies. With investors and customers demanding action, Samsung's corporate heft will be put to the test.
Amazon is already valued like a monopoly 19 Sep 2022 The $1.3 trln retailer is facing its biggest legal challenge yet after California sued it for antitrust violations. The company said the suit had it “exactly backwards." Investors – who value Amazon as if it is capturing a huge part of U.S. e-commerce– seem to think otherwise.
How Italy could tip into a tailspin 19 Sep 2022 Investors think the country will probably muddle through if Giorgia Meloni, a former post-fascist and eurosceptic, becomes its next prime minister. But there’s still a medium-term risk that Italy’s massive debt will spin out of control, says Hugo Dixon.
Musk can only wish Twitter was an Aussie company 19 Sep 2022 The Tesla CEO has to go to court to try and worm his way out of buying the microblogging site. Acquirers Down Under are allowed to revise their agreed price even after the target’s board approves a sale. Link Administration’s troubled $1.3 bln takeover saga is a case in point.
Capital Calls: Ralph Lauren 19 Sep 2022 Concise views on global finance: The $6 bln retailer known for its iconic Polo shirts is cheaply valued compared to European counterparts.
Mukesh Ambani pulls off one shade of overseas M&A 19 Sep 2022 The boss of $212 bln Reliance has so far failed in his hot pursuit of big flashy targets, the types of deals that tripped up his tycoon rivals a decade ago. Ambani’s quiet penchant for buying foreign technology to further his domestic clean energy goals looks much smarter anyway.
Capital Calls: Stratospheric SPACs 16 Sep 2022 Concise views on global finance: A slew of space firms have gone public in deals with blank check firms, only quickly to fall back to Earth. Intuitive Machines has a better shot at staying aloft, thanks to government contracts.
FedEx packages economic pain with bad judgement 16 Sep 2022 A dire profit warning erased nearly a quarter of the company’s market value. The delivery titan sits at the nexus of many secular problems, including changing consumer patterns, inflation and logistical snarls. But UPS’s performance suggests such challenges can be handled better.
Server landlords have plenty more rents to extract 16 Sep 2022 Short-seller Jim Chanos says data centers are overvalued, but buyout shops keep chasing firms like London-based Global Switch with bids over 30 times EBITDA. Tech giants are a threat. But as long as demand outpaces supply and cheap financing is available, the party can roll on.
Porsche IPO has two investor roadblocks to clear 16 Sep 2022 Volkswagen is listing the sports-car maker. To get the best outcome, it will need to persuade potential buyers to value it more like Ferrari than an ordinary auto group, and shrug off its complex governance. A 70 to 80 bln euro price range would adequately reflect this balance.
Italy’s first female PM is red flag for workwomen 16 Sep 2022 Ultra-right politician Giorgia Meloni is likely to become the next premier. She opposes boardroom quotas that have lifted female representation from less than 7% to 41% in a decade. Scrapping them would be a setback for a country struggling with stubbornly low female employment.
Capital Calls: Byju’s revenue fail 15 Sep 2022 Concise views on global finance: Byju’s topline shrunk after its auditor advised it to recognise its revenue differently.
Patagonia lobs ESG breakup calls back to the wild 16 Sep 2022 Founder Yvon Chouinard has ceded control of the clothing firm to use its earnings to fight climate risk. A sale would have built a bigger war chest. But he wants to defend his company’s values and workers, too. It shows how splitting environmental and social goals is wrongheaded.
Ethereum energy cut necessary but insufficient 15 Sep 2022 The blockchain used to trade ether revamped its process of awarding new coins in an effort to manage power usage. The new plan, which forces people to offer collateral to facilitate transactions and earn new coins, is smart. But it doesn’t address the speculative nature of crypto.
Biden graces Detroit but Musk steals the show 15 Sep 2022 The U.S. president’s visit to the Motor City auto show coincides with vast subsidies to aid carmakers in going electric. But Elon Musk’s Tesla, which eschews the event, is why they need help in the first place. Government support is less picking winners than consoling runners-up.
Adobe’s $20 bln deal uses ample creative license 15 Sep 2022 The design-tech titan behind Photoshop and Acrobat is paying cash and stock to buy startup Figma. It’s a defensive acquisition that just might capitalize on its rival’s popular online collaboration tools. A valuation of 50 times revenue, however, requires too much imagination.
Disney’s big ESPN choice, Rio Tinto Mongolia drama 15 Sep 2022 Activist Dan Loeb backed away from his demand that the $203 bln media firm sell its sports network. In this Viewsroom podcast, Breakingviews columnists debate whether it’s the right move. And the $94 bln mining giant’s attempt to secure copper supply may need heavier machinery.
Capital Calls: U.S. railways steer clear of crisis 15 Sep 2022 Concise views on global finance: Major U.S. railroads and unions reached a tentative deal, avoiding a shutdown that could have widespread consequences on the U.S. economy.
Bonus cap scrap would be dubious Brexit dividend 15 Sep 2022 UK finance minister Kwasi Kwarteng may dump rules curbing banker payouts to twice their salary. Yet it would only marginally boost the City’s competitiveness and may make more meaningful tax changes less likely. The benefits of tearing up EU regulations look increasingly elusive.
U.S. drug price cap hurts Big Pharma twice over 15 Sep 2022 President Biden’s plan to curb medicine bills could cost drugmakers like Pfizer or GSK $29 bln a year in lost sales. To cope, companies may focus on blockbuster therapies, and shun niche treatments. More competition in hot areas like cancer may mean lower prices and poor returns.
Oil price cap will harm, not help, Asia 15 Sep 2022 The U.S. says countries ignoring a G7-led price cap against Russia can leverage it to negotiate discounts. But even if the policy works and lowers short-term prices, India and China’s massive long-term oil needs make it risky to mess with price signals that spur fresh supply.
China’s battery maker has an IPO charging problem 15 Sep 2022 China Aviation Lithium is low on power ahead of its $1.5 bln Hong Kong float. The CATL wannabe is growing fast but its profit leans on government subsidies. Throw in high dependence on a single automaker and ties to a sanctioned entity, and it looks like a difficult ride.
Bank of Japan needs to pick yen battles carefully 15 Sep 2022 The central bank is signaling it may soon intervene as its currency hits 24-year lows. Slowing rather than reversing the U.S. dollar’s rates-driven strength may be achievable, but even that demands a cannier deployment of weaponry than just throwing money at the problem.
Starbucks’s high-octane plan has warm impact 14 Sep 2022 The $101 bln coffee firm spent a chunk of its investor day discussing solutions for its restless workforce. They are sure to give incoming CEO Laxman Narasimhan a challenge. But revenue is growing rapidly thanks to automation. Pretty soon, employees won’t have the same effect.
Tale of two meme stocks favors bankruptcy ending 14 Sep 2022 Chewy’s founder Ryan Cohen sunk his claws into GameStop and Bed Bath & Beyond. They both became meme stock sensations. The video game retailer’s shares benefitted more; the linen seller is on the brink of bankruptcy. Ironically, though, a restructuring makes the latter better off.
Mutual funds’ private bets could use more daylight 14 Sep 2022 The tech stock rout has done little to dent money managers like Fidelity or T. Rowe Price’s zeal for unlisted companies. In some cases, such holdings have performed better than public shares. Yet illiquid stocks bring fresh risks, and disclosure on how they are valued is patchy.