Amazon is the everything-plus-AI store 30 Apr 2024 The $1.8 trln company is still dominating e-commerce and cloud computing, as first-quarter earnings show. But its valuation trails Microsoft’s, which has plunged into AI. Boss Andy Jassy will play catchup in the coming year. But Amazon may not be as behind as investors think.
Musk’s China jaunt keeps underwhelming status quo 30 Apr 2024 Hope that Tesla can push self-driving in the country added $82 bln to its value. China’s cheap manufacturing, ample battery supply, and potential direct sales requires the EV-maker’s boss to maintain copacetic relations. But even the best outcome cannot justify excitement.
Satellite union will struggle to defy gravity 30 Apr 2024 Luxembourg-based SES agreed a $3 bln cash acquisition of US rival Intelsat. The news wiped a fifth off the buyer’s shares. Investors thought they were getting a ton of cash from the lowly valued satellite operator, but instead they’re getting a deal with questionable returns.
Overdue $80 bln Spain bank merger has new hurdles 30 Apr 2024 BBVA broached an all-share deal with $10 bln Sabadell. The smaller lender’s valuation has improved since the same merger was discussed in 2020, which could make it easier for the board to agree a sale. Yet it also makes the sums harder for the buyer, whose investors are spooked.
Jay Powell might wish for the sound of silence 30 Apr 2024 With inflation at 3.7%, the Federal Reserve chair is stuck. Signal lower rates are coming, and he may have to backtrack. Talk about increasing them, and bonds may go haywire. With a potential change in the White House, Powell’s intentions carry even greater weight, too.
Global retailers are headed for Shein reckoning 30 Apr 2024 Zara owner Inditex, H&M and other apparel giants are holding ground against the Asian fast-fashion upstart. However, AlixPartners’ retail expert Matt Clark argues in this Exchange podcast that Shein’s focus on garment quality could threaten the dominance of pricier rivals.
CEO departure puts HSBC at risk of strategy drift 30 Apr 2024 Noel Quinn is retiring from the $164 bln bank after less than five years in charge. If Chair Mark Tucker picks an internal replacement the new broom risks looking like a second choice. Appointing an outsider could leave HSBC without clear medium-term targets for a year or longer.
L’Occitane sets a high bar for Hong Kong exits 30 Apr 2024 Chairman Reinold Geiger’s offer to take his skincare group private values it at 6 bln euros, a decent 30% premium. Funding led by Blackstone might help keep a lid on interest expenses while the company restructures and seeks a listing in Europe. Other buyouts will be trickier.
Von der Leyen’s China plan is all bark and no bite 30 Apr 2024 To keep her job atop the European Commission, Ursula von der Leyen will talk tough but wield a small stick towards Beijing. Open supply lines from the People’s Republic are key to Europe’s economic well-being. Brussels’ rhetoric will likely be harsher than sanctions and tariffs.
China can stay on sidelines in BHP-Anglo battle 30 Apr 2024 The People’s Republic may not kick up a stink about a merger like it did with the Aussie miner’s 2008 Rio tilt. Suppliers of copper are more fragmented than those of iron ore, Beijing’s M&A interventionism has matured, and friends like South Africa can lead any deal opposition.
Japan’s hottest new activist isn’t an activist 30 Apr 2024 Hiroyuki Otsuka, formerly at Carlyle, raised $1 bln from MUFG, Mizuho and other local firms for his debut engagement fund. The next phase for unlocking value in Japan will depend less on foreigners. But keeping bosses happy while pushing for change is easier said than done.
China auto show puts smart at centre of car wars 30 Apr 2024 BYD, Geely and peers touted everything from self-driving software to massage chairs at lower prices than in the past. They are extending a lead over global rivals, with help from tech juggernauts such as Huawei. But global carmakers including Tesla can follow that roadmap, too.
Republic First is the good kind of bank failure 29 Apr 2024 The shuttered lender was low on equity and high on drama, home to years of lawsuits and board fights. Even with familiar balance-sheet issues, there’s little risk of knock-on effects elsewhere. Bank windups are working - though judging by placid depositors, maybe a bit too well.
Comcast’s theme parks are an underrated attraction 29 Apr 2024 The cable conglomerate’s giant Epic Universe resort is finally due to open in 2025. Super Mario and Harry Potter are solid headliners, but the $240 bln enterprise’s valuation suggests investor skepticism about joining the ride. Mixing media and internet makes only so much magic.
Yen intervention is a lost cause worth pursuing 29 Apr 2024 Tokyo may have acted to prop up the currency after it dropped below 160 to the dollar. It’s a losing bet until the US Federal Reserve cuts rates or the Bank of Japan tightens monetary policy further. But there is value in signalling to the world that this is not a one-way street.
The Agnellis’ risky Philips bet starts to pay off 29 Apr 2024 The Dutch group settled its US faulty sleeping aid claims for a manageable $1.1 bln, lifting its stock 35%. The relatively quick fix vindicates Exor CEO John Elkann’s $3 bln punt on Philips when legal worries kept investors away. It may also shift the thinking on big litigations.
Sánchez’s psychodrama leaves Spain at loose end 29 Apr 2024 PM Pedro Sánchez is staying on after threatening to resign over a court probe into his wife’s dealings. He appears weakened before a series of elections, raising doubt on his ability to push for reforms and ensure the country remains the fastest-growing major European economy.
Petrol station tycoon picks poor time to exit Asda 29 Apr 2024 TDR may buy Zuber Issa’s 23% stake in the UK grocer, increasing its own holding. Since their 2021 deal Asda has repaid a big chunk of its debt, but market struggles mean it merits a lower multiple. The buyout shop’s consolation is it can drive a hard bargain on price.
China is better off doing nothing for TikTok 29 Apr 2024 Beijing has signalled it would rather ByteDance's video app be banned in the US than sold. Unlike Huawei, the company's technology is neither strategic nor desirable. Having a final say over TikTok's fate might be useful political leverage, but retaliation fears look overblown.
Ukraine’s $61 bln lifeline is not enough 29 Apr 2024 The United States last week cleared a vital aid package, but Kyiv still needs a medium-term funding plan to withstand Russia’s onslaught. Mobilising Moscow’s $320 bln of frozen central bank assets to provide compensation for war damages should be central to this.
Exxon and gas markets tell different stories 26 Apr 2024 CEO Darren Woods denies fossil fuels are in decline, thanks to growing populations and rising petrochemicals demand. Yet a glut of natural gas – which reined in quarterly profit at Exxon and rival Chevron – is a real problem, and one that could weigh on prices for a long time.
Thoma Bravo UK cyber deal looks a little too good 26 Apr 2024 The buyout firm finally agreed a takeover of long-term target Darktrace, an IT security specialist. Despite the generous-looking 44% premium on offer, the buyer’s returns seem juicy given a nascent US push. That may raise the chance of shareholders asking for more money.
BHP investors throw CEO too short an M&A leash 26 Apr 2024 The miner’s stock fell 4.6% after the company proposed to buy Anglo American at a $39 bln valuation. It suggests shareholders fear boss Mike Henry will end up overpaying. But with his low-ball opener leaving plenty of wriggle room to justify upping the bid, that looks premature.
CVC’s Darwinian pay policy puts rivals on the spot 26 Apr 2024 The buyout shop, which manages $200 bln, allocates 40% of fund profits to staff on a deal-by-deal basis, rather than pooling the spoils. Rivals say it hurts teamwork, but CVC’s returns suggest it works. If the newly public firm keeps out-raising peers, others may follow suit.
Through Aramco, Peak China courts Peak Oil 26 Apr 2024 Buying a 10% stake in petrochemical firm Hengli will ramp up the Saudi giant’s presence in the People's Republic. Aramco is boosting ties with an important long-term customer. Beijing gets to tout foreign inflows as other sources dry up. It's a critical match.
Who can serve up the Goldilocks recipe for AI? 25 Apr 2024 Investors slapped down Facebook owner Meta for hefty spending on artificial intelligence with uncertain returns. Conversely, they have feted chipmaker Nvidia for its real-life revenue from AI tools. Microsoft and Alphabet are doing a decent job of landing in the middle.
Anglo American has grounds to play hard to get 25 Apr 2024 The London-listed miner has received an all-share $39 bln bid from BHP. Anglo’s recent woes explain why, but its jumble of assets could be worth more. If boss Duncan Wanblad can show as much by outlining a plan B, he may yet see its $149 bln rival off – or extract a higher offer.
Detroit’s revenue engines finally start to fire 25 Apr 2024 Ford and GM haven’t grown US electric sales since 2022, despite investing billions of dollars. But under the hood, GM’s new models are gaining momentum, and Ford is focusing on its cash-generating trucks and vans. It helps that they are accelerating in different directions.
US economy is a victim of its own success 25 Apr 2024 The United States emerged as the world’s growth engine at the IMF summit last week. In this Viewsroom podcast, Breakingviews columnists debate whether this debt-fuelled strength means that interest rates will stay high for longer and how that could raise the risk of a recession.
Vote no to bashing proxy advisers 25 Apr 2024 Corporate leaders at JPMorgan and AstraZeneca bridle when ISS and Glass Lewis criticize their governance. No wonder: Some high-stakes shareholder votes this year will be uncomfortable for feather-bedded bosses. Proxy firms are problematic, but they do more good than harm.