Americas

Netflix runs into an age-old Hollywood problem

17 July 2019

The $159 bln video-streaming service added fewer subscribers than forecast. A price hike played a part, but Netflix also blamed a less appealing line-up of shows. Predicting hits and flops has long flummoxed Tinseltown. The ensuing lumpy results are now in Netflix’s script, too.

Congress is all bark and no bite on Big Tech

17 July 2019

U.S. lawmakers failed to disrupt Silicon Valley executives in hearings about antitrust concerns and Facebook’s crypto coin. Amazon faced some heat about third-party sellers but queries about MySpace and iCloud ads were distractions. It provides little incentive to change.

American depositors do the heavy lifting

17 July 2019

Bank of America followed JPMorgan and other peers with solid consumer banking results that propped up weak trading and investment banking. Falling rates and rising competition are risks, but it helps that Main Street customers generally can’t or don’t push hard for better deals.

Hadas: Peaceful trade theory ominously unravels

17 July 2019

From 18th century enthusiasm for “doux commerce” to the WTO, optimists have considered trade a good antidote to combat. From the Opium Wars to Trump’s tariffs, reality has been much more conflictual. The latest round of globalisation isn’t quite dead, but is badly wounded.

EU Amazon case pushes tech towards utility status

17 July 2019

Antitrust tsar Margrethe Vestager may probe the $990 billion group’s use of merchants’ data. That would fit with a wider European drive to stop technology companies’ platforms from favouring their own services. Tighter rules will, however, cement bigger players’ dominance.

China’s Topsports takes eye off e-commerce ball

17 July 2019

Two years after a $6.8 bln buyout of Belle, the shoe retailer has unveiled IPO plans for its athletic-wear chain. A Beijing-backed fitness push should help sustain sales growth. A dependence on Nike and Adidas is a worry, though, as is the lack of emphasis on its online strategy.

Amazon’s data deal invites D.C. scrutiny

16 July 2019

As its executives appeared at an antitrust hearing in Congress, the e-commerce giant offered customers $10 to track their web browsing. It’s a smart way to grab business from rivals, and the price low-balls the value of user data. It’s also a demonstration of how dominance works.

2017’s worst IPO tries on some 2019 flavoring

16 July 2019

Blue Apron’s battered shares rose over 50% after it agreed to put Beyond Meat’s plant-based burgers on its meal-kit menus. Other firms have juiced their stock with cannabis or crypto ventures, but the effect usually fades. This one promises a similarly disappointing aftertaste.

Tech and NYC are so over the Amazon spat

16 July 2019

With Google and WeWork expanding, Manhattan office rents are setting records and the space being leased is at a 25-year high. Tech employment continues to grow, and even Amazon may be seeking more capacity. It suggests the city can do just fine without subsidizing big tenants.

Wells Fargo waves carrot at wavering CEO wannabes

16 July 2019

The U.S. lender’s second-quarter earnings could aid its search for a new boss. One-off gains helped, but cost cuts kicked in too. Getting expenses to JPMorgan’s level and mending regulatory relations could boost Wells Fargo’s value by a third. That’s hard to replicate elsewhere.

Goldman enlivened by condition it wants to cure

16 July 2019

The $77 bln Wall Street firm’s decent second quarter relied on gains from private-equity investments and equities traders who performed much better than some rivals. Boss David Solomon wants over time to downplay those volatile businesses. For now he’s probably glad he didn’t.

Miner exits shift coal spotlight to Anglo American

16 July 2019

BHP is the latest heavyweight to consider a sale of thermal coal assets. That's sensible given weak prices, pressure from investors and a business that is barely material. Anglo's bigger exposure means a tougher choice - with few buyers, there’s a case for staying the course.

Uber adds useful numbers to solve gender equation

15 July 2019

The ride-hailing app is tying executive compensation to targets for increasing the share of women and minorities in its ranks. Linking pay to worthy diversity goals is one concrete way for Uber to rehabilitate its toxic image. It also paves the road for others to follow.

Silicon Valley is trapped in political purgatory

15 July 2019

Facebook can shrug off a $5 bln fine over privacy but the U.S. Treasury is questioning its crypto-coin plan. It also faces, with others, an antitrust grilling in Congress. Big tech doesn’t want a Wall St-like straitjacket, but growth will suffer without clear rules of the road.

U.S. corporate earnings lose their tax-cut mojo

15 July 2019

Forecasts now show S&P 500 profit declining in the second quarter, a sharp turnaround from a year ago, as revenue gains slow. Prognosticators see earnings growth back in double digits in 2020, but they could be wrong again – a possibility record stock prices may not reflect.

Gilead finds shrewd $5.1 bln salve to biotech risk

15 July 2019

The $86 bln U.S. outfit hopes to harvest multiple therapies by injecting cash into rival Galapagos. Gilead almost doubles its stake, limiting its downside exposure, and pledges to keep the Belgian firm independent. History suggests it’s a smart way to create drugs and wealth.

Citigroup creeps toward light at end of tunnel

15 July 2019

The perennial laggard of the big U.S. banks has been trying to win over shareholders with cash payouts and promises of cost cuts. It can now add faster revenue growth in credit cards and banking. That makes its turnaround story more credible – but there’s some ways to go yet.

Trump FX gripes may escalate another war of words

15 July 2019

The U.S. president says China and Europe are manipulating their currencies and Washington should match them. Competitive devaluation would break yet another long-standing norm and add a foreign-exchange battle to tariff conflicts. There would also be few, if any, winners.

Driverless Argonauts are all on valuation quests

12 July 2019

Ford and VW value their new autonomous-car joint venture at more than $7 bln. SoftBank and others peg GM’s similar division at $19 bln. Yet estimates on revenue and timing are all over the map. And Google’s Waymo is leading on several metrics. Their real worth could be anywhere.

Meal delivery crowd is ripe for M&A takeout

12 July 2019

Americans are ordering more food at home, but too many well-funded companies are fighting to deliver it. Small firms like Postmates should sell. The likes of Uber or DoorDash can afford to pay a premium to keep it out of the hands of rivals, and increase their odds of survival.