BREAKINGVIEWS

Big Tobacco tech offers path to partial redemption

18 June 2021

Philip Morris is tweaking its inhalers for medical drugs, rather than recreational ones. If non-nicotine sales hit their target, the unit could be worth $5 bln. That’s tiny against the Marlboro maker’s $156 bln price tag. As a genuine health benefit, the PR value may be greater.

Green megalomania renews $80 bln Congo hydro dream

18 June 2021

Aussie mining magnate Andrew Forrest is behind a fresh push to turn the African river’s vast power into energy. Dam-building is a fool’s errand, though, and his Fortescue’s plan to produce hydrogen for export may not stack up financially. Less bombastic alternatives are better.

Hong Kong scion cedes hometown IPO premium

18 June 2021

Richard Li, the entrepreneurial son of tycoon Li Ka-shing, plans to list his pan-Asian insurer FWD in New York instead of the city where he’s a familiar face to investors. He is sacrificing both brand recognition and higher valuations. It’s a steep price for keeping more control.

CureVac’s pain may not yet have peaked

17 June 2021

The German drugmaker’s value halved to $10 bln after it said its Covid-19 vaccine may be only 47% effective. Investors’ concern is that its critical mRNA technology may not work as well. Separate trials on its cancer vaccine will be key to CureVac’s future health.

Wall Street’s finest take on the mighty sponge

17 June 2021

The $5 bln IPO of Mister Car Wash has amassed some of finance's most prestigious underwriters. No wonder: It has solid growth, is simple to understand, and shines with profit. The risk is that competition is plentiful - and includes a bucket of water and the neighbor's kid.

DraftKings’ luck tilts odds against short seller

17 June 2021

Hindenburg Research questioned the legitimacy of some of the online-betting firm’s business. Even if proven right, the revenue impact would be small. Like many digital stocks DraftKings looks overvalued right now. But in this market, it’s risky to bet against the momentum.

Credit Suisse impasse makes Deutsche’s look easy

17 June 2021

The German lender righted itself by shedding superfluous bits of investment banking. For the Swiss group, that would mean cutting units like U.S. credit trading, which wealth clients barely use. But those businesses probably generate good returns, making a turnaround more costly.

Didi IPO runs into flashing regulatory yield sign

17 June 2021

Beijing trustbusters are probing the ride-hailing giant as it readies a market debut. Its dominance at home depends less on the anticompetitive tactics used by tech peers. Abrupt crackdowns on Ant and other industries, however, mean investors have been warned of the risks.

Fintech Wise’s hybrid IPO may be a one-off for UK

17 June 2021

Like Spotify in the U.S., the money transfer group will list in London without inviting bids from would-be investors. A direct listing is alluring, but only open to companies that don’t need cash and already have a base of external shareholders. Few other hopefuls fit the bill.

Toshiba’s scandal-hit board is on borrowed time

17 June 2021

The $20 bln Japanese conglomerate sacrificed just two directors after an inquiry judged insiders colluded with government officials to block activists. Yet all the top brass are tainted by association. Transparently phasing in their replacements would help rebuild investor trust.

Aon-Willis deal collapse would leave few mourners

16 June 2021

The Biden administration’s first big antitrust shot is against the $30 bln tie-up of two insurance brokers. Customers may not mind if the merger is scuppered. Neither may investors: Since it was announced, the combined firms’ market values have missed out on $20 bln of gains.

Blackstone returns to China office at good time

17 June 2021

After mooted talks fell through last year, the U.S. private equity firm is back with a $3 bln bid for Soho China. Even with a generous premium, the implied return looks decent. With real estate assets hit by the pandemic, the deal is a sensible bet on the country’s recovery.

Australia’s big boozy spinoff gauges ESG’s S value

17 June 2021

Grocery chain Woolworths is in the final stages of demerging its liquor shops, pubs and poker machines. Independence should help the Endeavour arm, perhaps worth A$13 bln, grow faster. How shareholders respond will help distill attitudes on the tricky social aspects of investing.