BREAKINGVIEWS

EU bonds will take shine off Germany’s over time

15 June 2021

Investors flocked to buy the maiden issue of the bloc’s 800 bln euro joint funding programme. But the yield is higher than Berlin’s, implying it’s not yet Europe’s safest asset. Closing the gap requires more liquidity and a sustained political commitment. Both seem likely.

Disney has enough magic without Hulu

15 June 2021

The Mouse House is rocketing ahead with its video service, Disney+. So it’s odd that it still owns two-thirds of the less successful Hulu. While Disney can buy the rest of Hulu from rival Comcast from 2024, it might make more sense to sell, and spend the money closer to home.

Bolloré and Ackman will beat the Vivendi activists

15 June 2021

Agitators including Dan Loeb own stakes in the French tycoon’s conglomerate. A messy plan to list most of music label Universal, while selling 10% on the cheap to Bill Ackman’s SPAC, gives them plenty to aim at. But Vincent Bolloré’s near-30% control means he has the upper hand.

Armani’s smartest fit is on Agnelli shoulders

15 June 2021

The suit maker’s 86-year-old founder, Giorgio, is measuring up prospective buyers, ideally from his native Italy. Despite some pandemic creases, the brand could fetch 8 bln euros. A sale to the Turin dynasty, rather than rivals Prada or Moncler, would preserve more of his legacy.

Tech IPO gives bad SPAC deals run for their money

15 June 2021

Macquarie-sponsored Nuix’s CEO and CFO resigned after poor earnings and forecast revisions within six months of taking the Australian software maker public. Blank-cheque deals like Lordstown are known for hype and under-delivery, and now this ordinary listing has managed it too.

Beijing finally gives China shorts a helping hand

15 June 2021

Central government crackdowns and the collapse of U.S.-based fund Archegos have delivered selective relief to investors betting against Chinese companies listed in New York. Caution is warranted as outbound investment quotas ease. Patriotic reinforcements are on the way.

Bitcoin accounting is a niche problem – for now

14 June 2021

U.S. asset-reporting rules aren’t fit for crypto mania. At payments firm Square, bitcoin also distorts revenue. Standard-setters’ inaction rests partly on the dearth of big companies taking the plunge – and partly on the huge significance digital assets could one day accrue.

Big Tech will dodge Congress’s sharpest arrows

14 June 2021

Lawmakers have included the power to break up firms like Amazon in one of five bipartisan bills designed to curb tech giants' market heft. It's unlikely to pass. Less onerous plans on data portability and merger fees have a better shot. Watchdogs will be left with blunt weapons.

SPAC boom gets “come to Jesus” moment in Lordstown

14 June 2021

The electric-pickup-truck maker admitted some pre-orders were nebulous, saw its CEO and CFO step down and warned it may not remain a going concern. This implosion, less than a year after going public, makes it easy for critics and regulators to latch onto specific SPAC problems.

Fashion moves to the centre of activist crosshairs

14 June 2021

Covid-19 has exacerbated the $2.5 trln industry’s ESG-unfriendly flogging of cheap clothes. Recycling is no more than a partial fix for the problem. Inditex and H&M are insulated by their big family holdings, but Boohoo, Adidas and ASOS look vulnerable to investor attacks.

Shell’s U.S. rethink betrays lack of wiggle room

14 June 2021

The Anglo-Dutch driller may sell assets worth $10 bln in Texas. Not so long ago the U.S. Permian Basin was a key oil major growth area, but now Shell is under pressure to cut emissions. Restricting carbon while earning a financial return is increasingly determining strategy.

Don’t cry for tax havens, Cayman Islands

11 June 2021

The Caribbean region has been a shelter from levies for hedge funds and other investment firms. Many of those perks may remain even with a global deal. And caveats – from the UK to Switzerland – suggest that the ambitious multinational plans will be weaker than its headline.

Exxon defeat could lead drillers back to Texas

11 June 2021

The $265 bln fossil fuel giant’s board upheaval will prompt other drillers to merge higher returns with greener investments. Buying Texas oil ironically could fit that bill. Deals not only offer companies a way to cut costs. Acquisitions can actually help them look greener, too.