Considered View

Bitcoin passes the ransom test

14 May 2021

Sure, the crypto-asset isn’t widely accepted. But its appearance as a ransom in Colonial Pipeline's hack shows it shares useful features with the U.S. dollar – such as being easy to exchange. That unconventional sign of success means regulators are going to get even twitchier.

Netflix’s biggest threat lurks behind the curtain

14 May 2021

YouTube is lavishing money on creators and lapping up revenue from brands at a scorching pace. If the trend continues, the video network behind “MrBeast” could soon be worth as much as Netflix. The fact its value is hidden within that of parent Alphabet increases the danger.

UK’s LBO rush risks a buyout baron faceplant

14 May 2021

Britain has drawn two-thirds of Europe’s $21 bln of take-private deals this year. That will rise if KKR and Cinven clinch John Laing and Sanne. A fast recovery helps, but many takeovers look pricey. The problem is that cash-rich buyout barons have little choice but to spend.

Crazy metal prices inflate miners’ capex conundrum

14 May 2021

Sky-high copper and iron ore values should make the likes of Rio Tinto and BHP invest in extra supply for the green energy transition. But shareholders wary of past write-downs want dividends, not risky new projects. The higher prices climb, the starker the disconnect.

Capital Calls: Train bidding war

14 May 2021

Concise views on global finance: Canadian National increases its bid for U.S.-based Kansas City Southern.

Japan’s most expensive bank hides in a 7-Eleven

14 May 2021

ValueAct’s tilt at Seven & i involves deciding what to do with its 40% stake in the only Japanese lender trading over book value. Seven Bank mostly runs ATMs, a model threatened by digitisation. Yet it produces double-digit returns on equity, and a way to cash in on immigration.

Chinese podcast IPO starts on shrill note

14 May 2021

Tencent-backed Ximalaya, last valued at $3.7 bln, is going public. It boasts a diversified model of subscriptions, ads and live-streaming sales. But growth is slowing and rival Lizhi, which floated last year, is already underwater. A premium price tag could leave ears ringing.

Hertz Robinhood squad is right for wrong reasons

13 May 2021

The rental-car firm’s shares retained value through a restructuring process, partly thanks to retail investors' enthusiasm. After a bankruptcy-exit auction, shareholders are set to collect cash, shares and such worth over $1 billion. Next time, disappointment is more likely.

Knicks owners flirt with Humpty-Dumpty capitalism

13 May 2021

Shares of Madison Square Garden and its sister sports networks took a beating as the family controlling them plans to smush them back together. Returning to a conglomerate structure may benefit the empire-building Dolans, if not shareholders. Entrenched ownership has its price.

Poundland’s knock-down IPO is reassuringly cheap

13 May 2021

Pepco, owner of the chain that flogs cheap toiletries, is listing with a 4.8 bln euro price tag. Links to scandal-hit Steinhoff and weak sales growth justify a cut-price valuation of below 10 times this year’s EBITDA. If it can grab more market share, the discount won’t last.