Sweden

Central banks start game of chicken over rate cuts

21 Sep 2023

Officials in Sweden and Norway hiked borrowing costs, while their British peers didn’t. All hinted policy will stay tight, fearing that stoking expectations of an early start of the loosening cycle may fuel inflation. An economic slowdown may prompt rate-setters to be less tough.

Europe’s listless IPOs are red flag for big floats

31 Jul 2023

The region’s string of mostly mid-sized initial public offerings this year are now just 3% above their listing price on average. Such poor performance will make investors wary of backing new ones. That will give larger float candidates, like CVC and Galderma, pause for thought.

Embracer cash call undermines investors’ M&A play

6 Jul 2023

The Swedish gaming group raised $180 mln from various investors at a 9% discount to its closing price. Last summer, it raised $1.1 bln from Saudi Arabia at a 15% premium. The contrast suggests a lower chance of a takeover, meaning CEO Lars Wingefors faces a single-player slog.

Flailing property firms make for risky buyout prey

13 Jun 2023

Shares in Swedish landlord SBB crashed, while listed European peers also trade at heavily discounted valuations. It looks like a golden opportunity for private funds, with $700 bln of cash. The tough part will be securing debt financing and avoiding catching a falling knife.

Gaming transatlantic gap invites M&A shoot-’em-up

9 Jun 2023

Shares in European gaming groups like Ubisoft are off by a fifth over the past year, underperforming stateside peers. Self-inflicted slip-ups are partly to blame, but players’ love for US-owned blockbusters means the valuation divide will endure. Dealmaking is a likely endgame.

Swedish real estate is canary in the coal mine

13 Apr 2023

The Nordic nation is at the sharp end of Europe’s real estate slowdown. Residential prices fell 15% last year, with offices and shops set to follow as debt costs surge. Its property firms with borrowings equivalent to 40% of GDP have little cushion if foreign bondholders panic.

Spotify’s next act: hosting ad lollapalooza

24 Feb 2023

The music service attracted activist ValueAct as founder Daniel Ek starts to whack costs. Yet rather than cutting its way to profit, Spotify could stem its losses by nabbing a quarter of the streaming and podcasting ad pie. It’s a tough but plausible performance to pull off.

Battered fintech sector’s next play: sell ads

20 Jan 2023

Erstwhile financial technology stars like $47 bln Block and Klarna are suffering from falling valuations and slowing sales. Yet they’re sitting on potentially valuable insights about punters’ spending habits. That points to an opportunity in helping retailers reach their users.

EQT embodies private markets’ two big problems

18 Jan 2023

Shares in the $28 bln buyout group fell 6% after CEO Christian Sinding flagged a fundraising slowdown. Another issue is that, like its rivals, the Swedish firm spent big when asset prices were high. Its relatively steady fund valuations may not yet reflect all the future pain.

Oatly’s best turnaround recipe is dollops of cash

25 Nov 2022

Shares in the $950 mln faux-milk maker are down 80% this year, and revenue growth is slowing. CEO Toni Petersson will struggle to stop burning cash, and has ruled out selling the company. That means a looming capital hike may have to be much bigger than he currently thinks.

Plant-based food stocks lack sustainable finance

10 Jun 2022

Shares in faux-milk maker Oatly and plant-based burger purveyor Beyond Meat have tumbled this year. Despite flimsy gross margins, both still trade at a premium to bigger food rivals. Without a plan to cut costs, they will struggle to attract buyers or survive on their own.

Klarna’s $46 bln price tag endures only in theory

19 May 2022

Investors heavily marked down the value of the Swedish startup’s buy-now-pay-later rivals like Affirm. On their sales multiples, privately held Klarna’s valuation would be cut by 75%. While the business is diversified with better funding, it still requires lots of red pen.

Reinvention tops returns in Philip Morris snus bet

11 May 2022

The tobacco giant has agreed a $16 bln takeover of nicotine pouch maker Swedish Match. The deal brings it closer to being mostly smoke-free by 2025. But only rapid growth or big cost cuts can justify the 39% premium. CEO Jacek Olczak has scant room for legal or regulatory snafus.

Philip Morris’ snus deal looks doubly defensive

9 May 2022

The U.S. cigarette maker could beat a faster path to becoming a mostly smoke-free company if it snags the $12 bln Swedish Match and its chewable tobacco packs. A tie-up would be pricy, but investors’ growing yen for recession-proof stocks gives the Marlboro Man an added edge.

NFTs are more opportunity than threat for Spotify

28 Apr 2022

Music streamers have cause to fear so-called non-fungible-token platforms, which enable artists to nab bigger royalties. Yet Spotify and its peers are where the fans are. If digital collectibles take off, streamers may be able to take a piece of the pie rather than being eaten.

French financial royalty falls flat in music SPAC

19 Apr 2022

A blank-cheque vehicle backed by billionaire François-Henri Pinault and banker Matthieu Pigasse struck a $1 bln deal with Deezer. The European music streamer has carved out a niche and may fend off Spotify. But the SPAC is paying a higher multiple for a slower-growing company.

Buy gas now, pay later is a hard tiger to ride

1 Apr 2022

Fintech firms Klarna and Zip are offering U.S. punters interest-free instalments as a way to manage higher fuel bills. The fact that consumers use loans to afford mere essentials raises the risk of defaulted payments. And unlike discretionary sales, Klarna isn’t getting a fee.

Ericsson’s governance mess stretches beyond Iraq

30 Mar 2022

Investors rebuked CEO Börje Ekholm for not disclosing possible payments to Islamic State by stripping him of legal protections. The telecoms-kit maker kept voting details quiet, and its dual-class share structure means Ekholm looks safe. Investors have more reason to steer clear.

Alphabet fiddles as app-store antitrust fire burns

24 Mar 2022

The $1.8 trln Google parent will let Spotify use its own payment service, skirting a 15% fee. The move piles pressure on rival Apple to do the same. But it’s just a pilot project and probably still includes a hefty charge. U.S. and EU regulators may force the duo to go further.

EQT makes savvy $7 bln play for buyout big leagues

16 Mar 2022

The Swedish group is acquiring Baring Private Equity Asia. The price looks reasonable. And by paying mostly in stock, CEO Christian Sinding is putting his share-price premium to good use. EQT will finally have a global presence, helping it go toe-to-toe with U.S. giants like KKR.