Stolen razors are least of US drugstores’ concerns 1 Mar 2024 Walgreens and CVS have locked up items from deodorant to toothpaste. But a hyper-focus on theft is a reflection of drugstores’ more dire straits. Online competition, labor issues, and inflation are cutting into margins. Larceny is just the thing that pharmacies can control.
WeWork needs an Adam Neumann, not the Adam Neumann 6 Feb 2024 The founder of the office-sharing firm is trying to drum up support to buy his former firm out of bankruptcy. With momentum in its favor, WeWork, at the right value, has prospects, and an insider could be useful. But Neumann’s credibility is forever shot.
Fourth is with Jana in communications-space wars 8 Dec 2023 The pushy hedge fund wants $5 bln fiber-network builder Frontier to auction itself. Three of its other recent campaigns in the industry – at CyrusOne, Vonage and Zayo – all led to deals. This one’s a tougher sell, but there’s probably a buyer willing to pay a modest premium.
Purdue mess pits drug victims against due process 5 Dec 2023 The $10 bln settlement ending opioid lawsuits is done and dusted, except for a case being reviewed by the Supreme Court. Justices’ discomfort over bankruptcy protection for the Sackler family has merit. But throwing out a deal means aggrieved parties just have to wait longer.
Capital Calls: Roche, Brookfield/Origin 4 Dec 2023 Concise views on global finance: The $224 bln Swiss drugmaker is splurging $2.7 bln on obesity drug developer Carmot; the Canadian investment firm’s joint $13 bln bid for Origin Energy has failed. The trick now is to show what lessons it’s learned from its 16-month-plus campaign.
Capital Calls: Saks and Neiman Marcus 1 Dec 2023 Concise views on global finance: The two luxury retailers are once again contemplating a merger. Fickle consumers, even for high end items, make the marriage ideal.
WeWork’s big splash ends as a drop in the bucket 7 Nov 2023 The shared-office company once valued at $47 bln has collapsed, with lenders taking over in bankruptcy. SoftBank and its fund backers will be licking $16 bln of wounds, but communal workspaces are here to stay. And commercial real estate investors have far bigger worries.
Rite Aid can do more wrong in bankruptcy 17 Oct 2023 Ill-advised acquisitions, mismanagement, and the growth of more diversified rivals contributed to the drugstore chain’s demise. But its role in the US opioid epidemic was the real killer. Rite Aid wants to restructure, but an eventual sale may be the end game.
Climate change turns US utilities grimly exciting 31 Aug 2023 Hawaii’s biggest electricity provider is at risk of bankruptcy after wildfires destroyed a town. Increased capital expenditure can mitigate, but not eliminate, damage from storms and heat. Little wonder investors are slowly waking up to the dangers posed by litigious customers.
Opioids expose unhealthy bankruptcy addictions 11 Aug 2023 Mallinckrodt may file for Chapter 11 again, wiping out most of a $1.7 bln settlement over the painkillers. The insolvency also shielded executives from lawsuits, just as the Sacklers want to do. Such legal protections and undercapitalized restructurings discredit the process.
WeWork multitasked when it had just one job 9 Aug 2023 The office subletter conceded it might collapse, just months after a debt-for-equity recapitalization and four years since a funding round valued it at $47 bln. Mismanagement, hype and debt-fueled growth are to blame. Rival IWG suggests the business model works if kept in check.
India’s airline turbulence will be felt abroad 17 May 2023 Go is the second carrier to go bust since 2019 despite a booming $12 bln industry. Blame price wars and debt-fuelled expansion. The airline’s legal battle with foreign lessors like Sumitomo will be messy too. It will raise the costs on efforts to turn India into an aviation hub.
KKR’s $10 bln medical deal overlooked risk factors 10 May 2023 Since the 2018 buyout that larded Envision Healthcare with debt, it has struggled with Covid-19, hypertension induced by feisty insurers and rehab on its billing practices. Bankruptcy is now the prescription. It’s a reminder to beware combining operational and financial leverage.
First Republic’s rescue cements ‘too big to fail’ 4 May 2023 JPMorgan rode to the rescue of the mid-sized lender, which recently became the latest US bank to keel over. In this Viewsroom podcast, Breakingviews columnists discuss the impact of lending giants bulking up further, and whether that itself stores up future risks.
Capital Calls: Bridal bankruptcy 18 Apr 2023 Concise views on global finance: David’s Bridal, which dresses one in four American brides, has filed for Chapter 11 bankruptcy for the second time in five years. Trends that push women to spend more on themselves suggest the chain would have better luck with bachelorettes.
Richard Branson advances the science of SPAC holes 4 Apr 2023 Virgin Orbit, one of more than a dozen space-related outfits to go public since 2019, mostly by way of shell companies, has declared bankruptcy. On average, these stocks have lost 75% of their market value. Rapid incineration of capital means plenty of others will flame out too.
SVB’s collapse casts long and global shadow 16 Mar 2023 The US bank’s failure sparked a mass selloff in bank stocks. In this Viewsroom podcast, Breakingviews columnists debate the causes of investor jitters, the long-term implications of intervention by governments and regulators, and the latest concerns about Credit Suisse.
SVB proves even smaller banks are too big to fail 15 Mar 2023 It’s 15 years since Bear Stearns showed large-scale failure is contagious. Yet US regulators still struggled with the collapse of a group half its size. If buyers cannot come to the rescue and depositors won’t bear any risk, then even lesser groups will need more protection.
European banks priced for profit dip, not crisis 14 Mar 2023 Lenders’ shares have plunged since Silicon Valley Bank failed, but only to January’s levels. Senior bankers like Lloyds CEO Charlie Nunn see no evidence of a US-style deposit rush in Britain. For investors, the fear is that interest rates don’t rise as far, crimping returns.
Bank-run defences could use some reinforcements 13 Mar 2023 Silicon Valley Bank wasn’t subject to requirements that compel most lenders to hold enough liquid assets to meet possible outflows. But the speed with which corporate clients pulled their money suggests those rules need tweaking. Doing nothing raises the risk of a bigger repeat.