Companies & Funds

Amazon Pentagon ties may receive greater scrutiny

14 August 2018

Donald Trump is no fan of Jeff Bezos. But the U.S government could become an even bigger Amazon client as the Department of Defense seeks pitches for a $10 bln cloud deal. The juggernaut’s slick Pentagon networking could give rivals like Oracle some curious optics to exploit.

Tesla is risky vehicle for Saudi reform drive

14 August 2018

The Gulf state wants to diversify away from oil and might help take the auto group private, reckons CEO Elon Musk. That’d be a mistake. Tesla could flop even if electric cars take off, and Musk’s buyout price is too high. There are cheaper ways to play the energy transition.

Antofagasta shows markets’ low bar to trade panic

14 August 2018

Shares in the London-listed Chilean copper miner slumped after it said U.S.-China trade tensions may hit demand for the metal. Antofagasta had a weak first half, but its guidance is unchanged. Macro jitters mean investors are unwilling to give companies the benefit of the doubt.

UK insurer buyout depends on avoiding potholes

14 August 2018

Bain Capital is offering 1.2 bln pounds in cash for esure. To justify a multiple of 12 times 2019 earnings, the private equity firm will need to ramp up the motor and property insurer’s digital credentials. An overhaul is necessary to counter the industry’s shaky prospects.

Going local would take KKR Indian loans up a notch

14 August 2018

A listing of the U.S. firm's lending unit would help fund long-term growth in a market where companies have been starved of credit. Healthy valuations for non-bank financial services firms, plus signs a new bankruptcy code is working, make it a good time to bed down.

China Literature splurges on confusing plot twist

14 August 2018

Shares in the $7 bln online publisher sank on lacklustre earnings and a big cash and stock acquisition. Diversifying to buy a video producer one third its size is bad enough. That Tencent, which already owns a movie-studio, is on both sides of the deal makes it more muddled.

China’s Tesla bets on hot-wired dream for IPO

14 August 2018

Electric-car maker Nio wants to raise up to $1.8 bln in a New York listing. Chinese drivers are getting greener and richer. But with less than 500 cars delivered and 2017 net losses near 14 times those of Elon Musk’s outfit before a more modest 2010 listing, this is a hard sell.

China’s stealth housing support is looking wobbly

14 August 2018

Officials are tweaking a $470 bln liquidity scheme by which the central bank effectively helps upgrade housing in smaller cities. Even a modest change could cause real estate markets to shudder. Little wonder that Chinese property developers tremble with every update.

Foxconn earnings slip is a governance wake-up call

14 August 2018

Quarterly net profit at the $50 bln iPhone-assembler badly missed expectations. Steeper costs at subsidiaries and other bets are probably to blame. Boss Terry Gou, though, gives few details on new ventures: without better disclosure, shareholders will be caught off-guard again.

Musk missive reveals more than he might like

13 August 2018

Tesla’s CEO has given extra details about his mooted buyout of the $59 bln electric-car maker, including that the Saudis want to finance it. Yet how he’s handled the disclosures, and his too-free definition of “secured” financing, confirm how ill-suited he is for his public role.

Wrangler jeans breakup gets a dressing down

13 August 2018

Owner VF is separating its denim brands from the rest of its wares. The Wrangler and Lee jeans division will be more indebted and pay a higher dividend. But VF’s pieces add up to less than its $37 bln valuation, which takes the impact out of the company's big reveal.

Nielsen’s best option is to rip off the band-aid

13 August 2018

Paul Singer’s Elliott disclosed a 5 pct stake in the stumbling $8.5 bln TV-ratings firm and is pushing for a sale. It’s a surer remedy than auctioning one floundering business unit amidst a protracted CEO search. Buyout firms took Nielsen on once before. Maybe they will again.

Bayer’s cancer scare makes a bad deal worse

13 August 2018

The German group's market value fell nearly $10 bln after a court awarded $289 mln to a user of weed killer made by U.S. division Monsanto. That may overstate the likely losses, but the verdict undermines a deal that already destroyed value, and left shareholders without a say.

WPP has least bad CEO at its fingertips

13 August 2018

The ad group has yet to replace Martin Sorrell four months after his exit. External candidates are proving hard to come by. Best to appoint de facto interim boss Mark Read on a permanent basis. He’s tech savvy and has insider knowledge that will help unify the sprawling business.

Political risk creeps into China’s very bad bank

13 August 2018

Huarong Asset Management says earnings will drop sharply, after its chairman’s fall from grace triggered a liquidity crisis. The government, its top stakeholder, seems content to watch the shares collapse. Investors will take note: state backing now comes with more caveats.

China’s solar stress could burn more dealmakers

13 August 2018

Slashing official support for solar energy helped scupper Shanghai Electric’s plan to snap up a $2 bln stake in giant GCL-Poly’s core unit. A downturn should drive consolidation in the heavily indebted sector. But the doomed deal shows how hard it is for two sides to agree.

Guest view: ESG ratings aren’t reliable enough

10 August 2018

Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.

Tinder parent gives Facebook a dating lesson

10 August 2018

Owner Match Group said the swiping app will have more than $800 mln in revenue this year. Shares have tripled since its 2015 debut as it rakes in money from subscriptions. The successful model only highlights the shortcomings of the social network’s wannabe status.

Summer lulls offer false sense of security

10 August 2018

That, at least, is the lesson of August 2008. A complacent Citi exec claimed the lender had more than enough capital, Merrill handed one banker a $40 mln guarantee, GM’s CEO was talking up its prospects - and the Fed was worried about inflation. The hubris didn’t last long.

Foreign banks in Turkey face degrees of pain

10 August 2018

A growing economic crisis in Turkey has sent shares in European banks with significant local operations down by 3 to 4 percent. But the quantum of their exposure varies. Longer-term pain will depend on whether they matched loans with local deposits or relied on parent funding.