Companies & Funds

Walmart adds solar burns to Tesla’s challenges

21 August 2019

The U.S. retailing giant is suing Elon Musk’s $40 bln electric-car maker for negligence after its solar panels allegedly sparked fires at stores, further denting Tesla’s quality-control image. Walmart’s move also puts Musk’s odd 2016 acquisition of SolarCity back in the spotlight.

Hadas: Boeing lens refracts a Beijing dilemma

21 August 2019

Xi Jinping wants both tight government control and a modern economy. That combination has never worked, for good reasons. China’s leader could learn from the U.S. aerospace giant’s mess. A politically uncomfortable free press can be an economically helpful check on corruption.

Meituan Dianping gets better at multitasking

21 August 2019

The $50 bln delivery-to-ride-hailing giant’s takeaway unit is expected to post its first profitable quarter on Friday, as it gets better at juggling multiple businesses. It has scaled down a costly bike sharing venture, while a push into groceries and maps plays to its strengths.

India could use a good economic crisis

21 August 2019

Car sales are down, unemployment is up and new investment proposals are at a 15-year low. There may be a silver lining: India has a record of bold reforms in times of stress, as when the country opened up in 1991. Prime Minister Narendra Modi has the mandate to repeat the trick.

Tech will struggle to evade U.S. antitrust octopus

20 August 2019

Facebook and Apple may soon face state-level probes into their business practices, as well as two by federal agencies. America’s multi-tentacled approach to antitrust is a tangled mess, but a strangely efficient one. It may also favor a tougher end result.

Transatlantic pet care deal will need grooming

20 August 2019

Elanco is paying $7.4 billion in cash and shares to buy Bayer’s animal-health division. The deal may make more sense for the seller than the buyer. The Eli Lilly spinoff will have to ramp up sales and deliver on ambitious cost-cutting plans to make a success of its acquisition.

Smartphones may be as good as it gets for Xiaomi

20 August 2019

Revenue at the Chinese group's handset unit rose a tad despite shrinking demand for such devices. But a push into internet services has been disappointing: Boss Lei Jun is struggling to wring more money out of a growing user base. Xiaomi’s premium valuation looks too generous.

Buyout barons play good guy in German lighting M&A

20 August 2019

Bain and Carlyle’s $4 billion Osram bid may be trumped by chipmaker AMS. Trade unions, which sit on the target’s board, are more worried by the latter than the former. While Chairman Peter Bauer may hear out the Austrian suitor, its heavy debt load will be hard to ignore.

Britain’s blackout whodunnit has multiple suspects

20 August 2019

An initial report sheds inconclusive light on a major recent power cut. Wind and gas-fired generators, network distributors, and National Grid may all have goofed. One thing is clear: the UK needs to go big on battery storage to accompany its commendable rush to renewables.

Investors can give Imperial Brands a bit more time

20 August 2019

Some shareholders are gagging for cash from more asset sales. They’re rightly angry about the tobacco firm’s share price collapse. But striking good deals for cancer sticks might be tricky. Beleaguered management would do better to focus on rolling out less harmful products.

Knight Vinke tilts at new European energy windmill

20 August 2019

The activist investor doesn’t want its 1.3% stake in Swiss utility Alpiq to be squeezed out in a delisting. The offer does look undervalued. But as with its other European energy interventions, Knight Vinke’s worthy crusade for shareholder justice faces stiff headwinds.

Twitter deserves a follow for China mute and block

20 August 2019

The $32 bln social network suspended state-backed accounts trying to subvert protests in Hong Kong. It also will stop taking ads from government-controlled media. Beijing’s wedge issue is a good opportunity for Facebook, YouTube and others to reconsider profiting from propaganda.

BHP boss makes himself tougher act to follow

20 August 2019

The miner reported a record $3.9 bln final dividend alongside its highest earnings in five years. Even as CEO Andrew Mackenzie conserves cash ahead of economic clouds and the end of his tenure, he has fulfilled shareholder return pledges. Any successor will face harder choices.

It is too soon to call a bottom on Baidu

20 August 2019

Despite a 62% decline in quarterly profit, the $36 bln Chinese internet company gave investors something to cheer with unexpected growth in video. Its main search business is hurting, though, and the ad outlook is weak. ByteDance and Meituan Dianping are coming for Baidu, too.

Li Ka-shing raises fresh glass to diversification

19 August 2019

Hong Kong’s richest man is buying the Greene King pub chain for $5.6 bln including debt. Most of his empire’s sales are abroad already. But given the deal injects new capital into the UK, it’s still a boon for Brexit Britain and a minor thumbs-down for his troubled home turf.

American CEOs may be half way to enlightenment

19 August 2019

The Business Roundtable touted a pledge by corporate leaders to run companies more for the greater good as if it’s a new era. In reality, shareholder primacy has reached a natural limit. Such promises, however, require concrete steps. One might be breaking down CEO primacy, too.

Holding: Are white-collar prosecutors going soft?

19 August 2019

That’s the implication of declining U.S. demand for defense lawyers. It’s possible corporate America is finally behaving itself. More likely, though, the dearth of cases against banks and other companies means enforcers are both turning a blind eye and chasing different prey.

SoftBank skin in the game risks major organ damage

19 August 2019

CEO Masayoshi Son and his dealmakers could contribute a chunk of the capital for Vision Fund 2, according to reports. Aligning staff and investors’ incentives is one thing. But since SoftBank would lend them the cash, its own losses would be magnified if the tech vehicle flops.

Green bond purists overlook benefits of grey

19 August 2019

Companies that pollute can sell debt with an eco-friendly tag if they ringfence the money for climate-conscious projects. Critics call this “greenwashing”. But the extra transparency asked of borrowers is useful. So is an injection of ethical thinking into corporate treasuries.

China’s rate reform inches along the market path

19 August 2019

The central bank is shaking up loan pricing, pushing aside a long-standing benchmark set by officials. It’s an overdue step designed to ease credit conditions and help companies borrow. Transmission problems remain, but a move closer to a more responsive system is welcome.