United States of America

White supremacy dies hard on the grocery shelf

5 March 2021

New Orleans craft beer Dixie will soon shed its name for a less racially divisive marque. It’s a big risk for a small company. But if a Southern staple can jettison a racially insensitive brand, what’s taking $60 bln giant Colgate, maker of “Black person toothpaste,” so long?

U.S. jobs jump masks big challenges

5 March 2021

The economy added 379,000 positions last month as temporarily laid-off workers were rehired. But there was little change in the number of long-term unemployed and the Black jobless rate rose to nearly 10%. This suggests the Fed’s wait for full employment will be a long one.

Bowing to activism may become too easy

5 March 2021

Danone and Exxon have revamped their boards after pressure from such investors. There’s less stigma these days in co-opting cage-rattlers. But the more easily activists get their way, the less rigorously demands will be vetted by other shareholders and in the public arena.

India has an opportunity to mend U.S. trade ties

4 March 2021

President Joe Biden’s aides reviewing India’s loss of preferential trade may face similar spats on technology and medical devices as their predecessors. Patience is waning though. Small gives by Prime Minister Narendra Modi could boost confidence and help to avoid more tariffs.

Compass IPO value is all about location

4 March 2021

The SoftBank-backed realtor may be worth $37 bln if it is benchmarked against Zillow. As a regular realtor, though, its value drops 90%. Compass is growing like a tech company but also paying for the privilege. That suggests it could be the worst property on the best block.

Hippo’s $5 bln debut marries promise with bubble

4 March 2021

The hot tech-focused home insurance startup is going public by combining with a blank-check firm backed by the founders of LinkedIn and Zynga. But valuing Hippo’s sales some 60 times more than established rival Allstate’s is as oversized as the mammal it’s named for.

Square’s mission drifts with Jay-Z’s Tidal deal

4 March 2021

Jack Dorsey’s $100-bln plus payments firm is buying the streaming music service owned by the superstar rapper for $297 mln. Square can easily swing it, but the rationale is head-scratching. Companies that creep into other adjacencies find even small deals bring big headaches.

Next Hertz drivers face a hairy ride

4 March 2021

Hedge funds Knighthead and Certares want to lead an injection of up to $4.2 bln in equity to take the wheel at the bankrupt car-rental firm. It would restart less indebted and should be more efficient. The rise of ride-sharing, however, puts a speed limit on potential returns.

Viewsroom: Wall Street CEOs’ pay, Sea, Greensill

4 March 2021

A plague year for the world was a relatively rich one for the heads of Morgan Stanley, JPMorgan and Wells Fargo; Southeast Asian tech conglomerate Sea navigated choppy waters to a $127 bln market value; Greensill’s problems may not be systemic, but they’re worth watching.

Sands’ Sin City sale might fund pivot to Australia

4 March 2021

The $50 bln casino company has filled its war chest after negotiating a rich price for Las Vegas assets. Crown Resorts would be an affordable addition to their Asia-Pacific empire, and the group founded by the late Sheldon Adelson would be welcomed by watchdogs Down Under.

Oscar’s $8 bln IPO is triumph of hope over scale

3 March 2021

The tech-driven newbie has made a start on disrupting U.S. healthcare. But bigger groups can offer more choice in care, negotiate better prices, and keep more premiums to themselves. Customer growth alone doesn’t make Oscar's 2020 revenue worth more than 10 times rivals' sales.

Meme stocks game could stop with Gensler

2 March 2021

The nominee to lead the U.S. securities regulator talked about trading gamification, inadequately funded platforms, and payments for order flow. The GameStop share-price roller coaster deserves a close look. But the SEC has other, perhaps tastier, fish to fry, like SPACs.

Biden finds Mohammed bin Salman is too big to nail

2 March 2021

The American president has taken heat for inaction over Saudi Arabia’s crown prince, despite judging him responsible for journalist Jamal Khashoggi’s murder. But MbS’ influence has metastasized across global finance. The fallout from sanctioning him would be more than diplomatic.

Twitter’s future looks like its underwhelming past

2 March 2021

Boss Jack Dorsey is aping features from Snapchat and Clubhouse, and making acquisitions in an attempt to double sales by 2023. Twitter isn’t the only tech firm with that kind of strategy. But the social network lags rivals, and past attempts to borrow and buy have flopped.

Chancellor: A bear market in bonds is beckoning

2 March 2021

Bond bull runs tend to last for decades, making it nearly impossible to accurately predict a turning point. But recent fixed-income extremes, together with the complacent attitude of central bankers and investors, suggest history’s greatest bond boom has passed its sell-by date.

Wall Street bosses’ pay sets course for conflict

3 March 2021

Morgan Stanley gave James Gorman a raise; JPMorgan kept Jamie Dimon’s pay at $31.5 mln. Goldman and Citi bosses took cuts because their banks misbehaved. Yet U.S. lenders benefited hugely from government Covid measures in 2020. That could make proxy season contentious.

Wounded U.S. bank watchdog needs urgent care

1 March 2021

The OCC, which oversees giant lenders like JPMorgan, has gone astray. It went solo on community lending rules, banned banks from eschewing oil firms and let them settle over sloppy compliance with little explanation. A new leader can repair the damage, but time is of the essence.

Arrival of J&J vaccine is sign of glorious spring

1 March 2021

Last March, the world realized in panic that lockdowns were here to stay. This month should unwind that reaction. The U.S. authorization of J&J’s new vaccine and rapid production increases by Moderna and Pfizer are good news for Americans, but also for everyone else.

Walmart’s fintech gain hints at Goldman’s loss

1 March 2021

Omer Ismail is leaving the Wall Street bank for a job at the $368 bln retailer, just two months after becoming head of Goldman’s consumer bank. Walmart could become a force in finance. But it’s also a sign that Goldman’s retail bank is losing some shine.

The house always wins with SPACs

26 February 2021

In poker, if you don’t know who the sucker is, it’s you. That’s also true of blank-check firms like the one that just did a deal with Lucid Motors. Sponsors, SPAC traders, merger co-investors and target-company owners all rake it in. Regular shareholders get the crumbs.