Fixing Intel ends with taking it apart 29 Sep 2023 The chip giant faces the existential challenge of regaining its lost lead in manufacturing. Doing so could double its $145 bln market value, but maintaining an edge requires ever more spending, fed by serving outside customers. The best way to do that: split Intel in two.
Capital Calls: US government shutdown 29 Sep 2023 Concise views on global finance: Civil servants, who already earn 24% less than the market rate, lose their pay when Washington closes. Legislators, meanwhile, keep collecting their $174,000 salaries. Having skin in the game would help focus congressional minds.
Covid tester buyout hands investors a bitter pill 29 Sep 2023 Cinven is buying back Synlab after floating it just two years ago. Acquiring the German group at a 44% discount to its IPO price is nice for the buyout shop, but hard for investors to swallow. Either way, it reflects ebbing demand for health checks as inflation soars.
To fix Britain, Labour will need new debt rules 29 Sep 2023 Tight fiscal curbs leave PM Rishi Sunak with no room for tax cuts or investments in the likes of rail link HS2. If Labour wins an election likely in 2024, it could hike spending via a broader metric based on the UK balance sheet. That could spur growth without spooking markets.
Toilet maker artfully unclogs bondholder backup 29 Sep 2023 Embattled Ideal Standard has struck a $640 mln deal to be bought by Germany’s Villeroy & Boch. The key was persuading creditors to accept less than par on 2026 debt. Other struggling companies could make use of similar financial plumbing.
PwC Aussie mess is classic do as I say not as I do 29 Sep 2023 An independent review sparked by a tax-leak scandal lays bare governance failures at the advisory firm including an overly powerful CEO, a supine board, poor risk processes and, ironically, an aversion to external help. Fixing those is just the start of the company's turnaround.
AI is making Meta virtually cool again 28 Sep 2023 Mark Zuckerberg talked up his $780 bln social media company’s artificial intelligence products at a developer conference. If they added as much value as Instagram, Meta could be worth $140 bln more. But Zuckerberg has to show he can monetize something he’s building from scratch.
Visa takes charge of one risk as another grows 28 Sep 2023 The payments network devised a way for banks such as JPMorgan to gradually offload their collective 20% stake, worth about $96 bln. It would help avoid a mad dash to the exit. With credit card usage, and possibly fees, rising, however, fresh legal and regulatory concerns abound.
Apollo’s divergent path outshines Blackstone 28 Sep 2023 Marc Rowan’s $55 bln asset manager found permanent capital in insurance. Steve Schwarzman’s firm uses small-fry investors. That led Apollo to safer assets, while Blackstone is leaning into buyouts that suffer from high rates. Apollo’s valuation can shed its boringness discount.
Capital Calls: Pelululemon 28 Sep 2023 Concise views on global finance: The apparel firm and the exercise-bike maker have entered into a five-year partnership, ending a costly feud. For Lululemon, it removes the risk of an outright acquisition. Peloton gains a valuable partner, but still faces an uphill climb.
European listing exodus is just beginning 28 Sep 2023 Building materials firm CRH and packaging giant Smurfit Kappa are among a growing list of companies seeking to decamp from Europe to US exchanges. In this Viewsroom podcast, Breakingviews columnists discuss what is prompting groups to leave and why the rot is unlikely to ease.
Cable makers are green investing’s dark horses 28 Sep 2023 Net zero requires annual grid investment to more than double to $750 bln by 2030, plus the building of more solar and wind farms. That’s a boon for makers of power lines like Prysmian and Nexans. Green investors searching for growth may increasingly pay them more attention.
A Putin friend in Slovakia could disrupt the EU 28 Sep 2023 Former PM Robert Fico is leading in the polls ahead of Saturday’s election. He wants to stop support for Ukraine and opposes sanctions on Moscow. Even with only 0.7% of the European Union’s GDP, a member state governed by a Russian ally could seriously mess up the bloc’s work.
China plus one will lift India’s capital market 28 Sep 2023 Global funds are doubling down on India, supporting IPOs. JSW Infrastructure attracted $7.3 bln of orders for fewer than $200 mln-worth of shares. It paves the way for big debuts like Ola Electric and Reliance Retail. Investors, though, are entering a market priced to perfection.
Indonesia spoils TikTok’s Southeast Asia party 28 Sep 2023 The region’s largest economy is banning social media outlets from hosting direct sales on their platforms. That’ll hit ByteDance’s short-form video app hard: it has 125 mln Indonesian users and the country is its main e-commerce market. So much for mixing business with pleasure.
Jeffrey Epstein leaves small mark on Wall Street 27 Sep 2023 JPMorgan will fork out another $75 mln to settle claims over its ex-client, winding down the sordid mess for financiers. The sex offender cost two industry CEOs their jobs, while banks now monitor such reputational risks more closely. The effects are likely to fade soon, however.
Capital Calls: UBS Russia risk 27 Sep 2023 Concise views on global finance: The Swiss bank’s value fell by $3 bln after Bloomberg reported that the US Department of Justice is investigating the recent acquisition of Credit Suisse over possible compliance failures.
Apple may be poisoned by Google antitrust fallout 27 Sep 2023 Founder Steve Jobs once threatened “thermonuclear war” against his rival for copying the iPhone. Now, more than 15% of Apple's operating profit might be coming from fees paid by the search giant. The big risk is that an unfavorable verdict will taint its rich valuation multiple.
OpenAI value ignores CEO’s fundraising odyssey 27 Sep 2023 The ChatGPT maker may ask investors to buy stock off employees at a $80-90 bln price tag. Based on Nvidia’s valuation, OpenAI could justify that mark by doubling revenue each year to 2026. A big risk is that boss Sam Altman keeps raising money, diluting existing shareholders.
Microsoft’s gaming M&A takes it to the next level 27 Sep 2023 The $2.4 trln group’s Activision deal has been picked at by regulators, and it’s exposed to consoles that may be upended by cloud gaming. Still, the $69 bln play diversifies Microsoft into mobile. And it leaves the group better placed to fight the industry’s content wars.
Byju’s restructuring leaves one big job untouched 27 Sep 2023 India’s troubled edtech star may slash 5,000 roles in its overhaul. That’s easy work compared to solving its $1.2 bln loan dispute. Co-founder Byju Raveendran remains CEO. Starting a new chapter with old hands is tough but it reflects a hard reality for the Prosus-backed group.
Lithium merger is charged up by tycoon fever 27 Sep 2023 Gina Rinehart, Australia’s richest person, has bought 11% of Liontown, which is sizing up a $4 bln takeover by Albemarle. Whether she makes a full bid or not, she’s only the latest mining billionaire forcing a strategic buyer to dig deeper for an energy transition commodity.
Amazon has a poor man’s monopoly 27 Sep 2023 Trustbusters sued the $1.3 trln retailer over how it restricts merchants on its site. But it has lost ground to rivals like Walmart thanks to bad M&A and retail losses. Amazon gets the worst of two worlds: strong enough to worry regulators, vulnerable enough to concern investors.
Long US shutdown is avoidable but seems inevitable 26 Sep 2023 A group of Republicans are holding up approval of a $1.5 trln budget because they want $60 bln in cuts. Fiscal responsibility is fair enough, but they’re being contradictory and unreasonable. Even if Republicans were to reach an agreement today, other issues will get in the way.
Capital Calls: Net neutrality is back, again 26 Sep 2023 Concise views on global finance: US regulators want to reopen a decade-old fight over the internet’s rules of the road. But just like merger cops who have struggled to gain traction, they are trying to use yesterday’s tools to predict tomorrow’s problems.
Grisly Hulu battle would deepen streaming wars 26 Sep 2023 Comcast and Disney are set to spar over valuing the TV service behind the “The Bear.” Cable boss Brian Roberts figures his company’s 33% stake is worth a bundle; rival Bob Iger will disagree. A long fight makes little sense when they’ll probably wind up around $33 bln anyway.
Bankers’ IPO support could easily buckle 26 Sep 2023 Arm, Instacart and Klaviyo egged on opening pops for their listings by selling a meager number of shares, but have fallen since. While big debuts are good for the companies, their inability to outpace a still-weak market means the opportunity for others to follow remains narrow.
Coty’s listing treatment is just cosmetic 26 Sep 2023 The $10 bln US-traded beauty firm is going against the tide with a dual listing in Paris. That may give it more visibility with European investors and the funds will cut its debt. But it won’t reduce the risk of its luxury clients boosting their own cosmetic and perfume arms.
EU regulators have tech giants in their sights 26 Sep 2023 Brussels is taking on the likes of Amazon and Apple with a slew of new rules aimed at curbing market dominance and taking back control over data. Former EU Commission economist Bertin Martens explains to The Exchange podcast how the industry giants could be forced to open up.
Meloni’s Italian job is a lesson for EU’s right 26 Sep 2023 In her first year, the PM pledged Rome’s commitment to NATO and fiscal discipline. That may be a template for nationalist parties trying to copy her success. Yet she also wasted time on culture wars. As growth stalls and immigration soars, the rest of her term will be tougher.