Viewsroom: Spotify leads Wall Street on IPO dance 5 Apr 2018 The music-streaming service enjoyed a mostly smooth stock-market debut despite largely bypassing investment banks. Ultimately, though, business success, not IPO hype, is what counts. Plus: Regulators and automakers are sparking up an altogether too cozy relationship.
China brings a gun to its U.S. trade gunfight 4 Apr 2018 Beijing proposed duties on $50 bln of American exports hours after the U.S. said it would tax the same value of Chinese exports. Doing so may hit China’s economy, but that’s the point. The readiness to go toe-to-toe implies Trump’s trade war will be neither good nor easy to win.
Elliott targets right pressure points at Hyundai 4 Apr 2018 The feisty U.S. hedge fund has waded into a restructuring at the South Korean conglomerate. Elliott’s three-part, $1 bln investment seems focused on the aspects of the overhaul that are most likely to generate controversy, and where it could rally support from other investors.
U.S. emissions watchdog hands keys to car industry 3 Apr 2018 EPA boss Scott Pruitt plans to ditch Obama-era rules mandating much greater fuel efficiency. He says the move will enhance affordability, but that’s a foil for putting industry concerns first. As finance has shown, regulators who kowtow to those they oversee can cause a crash.
Tricky Renault-Nissan deal would be rewarding 29 Mar 2018 The French and Japanese groups chaired by Carlos Ghosn may merge to create a carmaker that trades as a single stock. The Gallic state, which owns 15 pct of Renault, would put up roadblocks. But after 19 years of cooperation, margins are low enough to make the union worth a try.
Uber races towards IPO with Southeast Asian deal 26 Mar 2018 The U.S. ride-hailing giant is exiting another cut-throat market. It will hand its regional business to Grab, a $6 bln local rival, and take 27.5 pct of the enlarged group. This is a sensible step to prepare Uber for public life – provided Grab can hold onto its leading position.
Self-driving cars may find legal lesson in pharma 22 Mar 2018 Autonomous vehicles should make road deaths like the one involving an Uber prototype a rarity. Paradoxically, as drugmakers found with vaccines, mishaps may raise legal costs and drive companies out of the market. Limits on suits and a compensation fund balanced risk and reward.
Daimler’s creepy Chinese suitor scrubs up well 21 Mar 2018 Geely’s earnings doubled to $1.7 billion in 2017, as its SUVs flew off the lots. Chairman Li Shufu’s surprise stake-building ruffled feathers in Germany. But Li’s company is trouncing Daimler’s current local partner, BAIC. That might in time prompt a rethink in Stuttgart.
Elon Musk pay deal is crazy enough to get the nod 20 Mar 2018 The Tesla boss could collect nearly $60 bln over 10 years. That’s excessive and surely unimportant for motivation. Yet it’s built on PR-stunt targets involving sales, EBITDA and market cap exploding 10-fold or more. For investors voting on the plan, it’s like playing the lottery.
Michelin’s $1.7 bln UK rubber deal stretches logic 20 Mar 2018 The French tyre maker is buying conveyor-belt group Fenner, whose clients include miners. Michelin should be able to flog more products in Asia and South America, and drive harder bargains with suppliers. Even then, it will struggle to earn an acceptable financial return.
Volkswagen investors are stuck in the past 13 Mar 2018 The carmaker’s shares are priced at a 20 pct discount to German rivals Daimler and BMW. That’s despite fast growth, a rising operating margin and scale that gives it an edge in electric vehicles. Cost cuts and a full year without unexpected diesel provisions would help close the gap.
GKN turbocharges defence with $5 bln auto sale 9 Mar 2018 The besieged engineer is selling its car parts division to U.S. rival Dana for stock and cash. The price looks generous, and even allows GKN to ditch its pension liabilities. The sum of the UK group’s parts now looks well above what hostile suitor Melrose Industries can afford.
Chinese bidders find new way to collar their prey 8 Mar 2018 Geely’s boss used an “equity collar” to amass a $9 bln stake in automaker Daimler fast, and without much hard currency. HNA has done something similar at Deutsche Bank and Swiss travel retailer Dufry. Other Chinese firms could use derivatives to make their money go further.
Renault-Nissan will struggle to lose third wheel 7 Mar 2018 The Japanese group may buy France’s 15 pct Renault stake, according a Reuters report the carmakers deny. It’d ease the French group’s heavily discounted share price and a full merger may allow the alliance to cut more costs. But it’s hard to see politicians yielding full control.
FCA spinoff tests carmakers’ financial engineering 6 Mar 2018 The Italian auto group may hive off a non-core unit to earn a better valuation. Volkswagen and Daimler may do the same. The sums work on paper, but a lasting uplift hinges on investors reassessing the remaining businesses. M&A and operational improvements may have more impact.
GKN recruits stateside backup for Melrose bid 2 Mar 2018 The UK engineer fighting a 7 bln pound hostile bid may merge its car unit with U.S auto supplier Dana. Though a deal would be complex, it reinforces GKN’s case that a breakup creates value. The prospect of bringing in new management also defuses one of Melrose’s criticisms.
Peugeot’s purring engine has one rattle: Opel 1 Mar 2018 The French carmaker’s main brands hit a record operating margin last year thanks to a hot new SUV. But plans to revive its loss-making Opel unit look optimistic given carbon emission fines and a row with former owner GM. Boss Carlos Tavares needs to drum up more cost savings.
Geely wheels Mercedes into its chop shop 26 Feb 2018 The Chinese carmaker's founder has bought a 10 pct stake in Daimler, parking it next to Volvo, Lotus, London cabs and Swedish trucks. It's another strange turn in Geely's route to global growth. This new $9 bln part will be hard to fuse onto what has otherwise been a sweet ride.
Cox: Gun lobby meets match with economic protests 23 Feb 2018 Civil rights movements often embrace boycotts. Think of Gandhi's Salt March, suffragette strikes, South African divestment or MLK's final speech, where he told followers not to buy Coke. Now it's the NRA's turn, as consumers force all manner of companies to sever ties.
AA roadside repair prolongs debt hazard 21 Feb 2018 The UK breakdown group’s shares lost of a fifth of their value after its new CEO warned of lower earnings and slashed the dividend. A costly push to sign up younger members is necessary but risky. Pulling it off is the only way to shrink the company’s 2.7 bln pound debt load.