Textbook supplier Chegg flunks terminal-value test 2 Nov 2021 A 48% collapse in the educational book-rental company’s shares – after it cut its sales forecast by just 6% – might seem draconian. Chegg’s misfortune shows how, for companies betting on long-term demographic trends, small shifts in assumptions can trigger huge changes in worth.
Stablecoin watchdogs suffer from own complexity 2 Nov 2021 U.S. regulators want Congress to make issuers of dollar-linked tokens, such as Tether, toe the line like banks. Rules for digital assets could in various ways both legitimize and crimp them. But it’s a bewildering task, not helped by a similarly distributed system of regulation.
DuPont financial tinkering comes at too high price 2 Nov 2021 The chemical giant’s $5 bln purchase of peer Rogers is a logical attempt to shift its focus to future-proof industries. It looks to be overpaying, though, which risks destroying value for shareholders – much like the years of buys, spinoffs and sales that preceded it.
Unilever’s tea makes for a tasty buyout brew 2 Nov 2021 The Dove maker is selling brands like PG Tips and Pukka, worth perhaps 4 bln pounds. Bringing sales to a proper boil could give private equity giants like Carlyle or Advent an invigorating 19% return. CEO Alan Jope’s struggling personal care lines may not hit the same sweet spot.
Chinese IPOs return to New York with a whimper 2 Nov 2021 LianBio, the first Chinese company to float in the city since Didi’s catastrophic listing, fell 14% on its debut. It touts a Cayman Islands domicile and U.S. backers but most of its business is in the People's Republic. Investors who once loved such hybrids distrust them now.
Temasek’s mixed loyalties muddy poor $2.5 bln deal 2 Nov 2021 A group ultimately controlled by the state fund has floated a cash offer for Singapore Press, edging past a complex bid by conglomerate Keppel, of which Temasek also owns 21%. Topping a soft offer is fine but meddling in its holding’s M&A raises questions about the end goal.
Goldman gets associate membership of SPAC mafia 1 Nov 2021 The Wall Street bank sold some of its clients a structured note that lets them dabble in blank-check vehicles in the way specialist hedge funds do, with near certain returns. Because Goldman offers financing and keeps gains above a threshold, it is playing the game itself too.
Coke dons extra armor in fight against Pepsi 1 Nov 2021 The soda company is leveling the playing field by buying the rest of sports drinks maker BodyArmor that it doesn’t already own for $5.6 bln. The fast-growing brand helps Coke grow in a category dominated by PepsiCo’s Gatorade, just as beverage sales are picking up again.
Airlines’ net-zero pledges fly on fumes 1 Nov 2021 Aviation accounts for only 2.5% of global emissions and technologies to help operators decarbonise appear numerous. Yet batteries, hydrogen, biofuels and e-kerosene all have big practical challenges and are too pricey. The risk for airlines is anxious states clipping their wings.
Jes Staley strengthens Barclays by leaving 1 Nov 2021 The American is exiting the UK bank after a regulatory probe into his relationship with sex offender Jeffrey Epstein. His six years as CEO brought better results but repeated questions over his judgment. New boss C.S. Venkatakrishnan will target the same strategy with less drama.
Russian IPO is carsharing model’s crash test dummy 1 Nov 2021 Delimobil, which is listing in New York, maintains a fleet of 18,000 cars for short trips. It’s fast-growing and EBITDA positive, helped by municipalities offering cheap parking. Its model can accelerate in richer countries, but only if taxes make owning a car too expensive.
Capital Calls: Darktrace’s stock wobble 1 Nov 2021 Concise views on global finance: The UK cybersecurity group’s share plunge reflects both short- and longer-term problems.
Aussie bank overhaul gets fat reality check 1 Nov 2021 Shareholders took $4.6 bln off Westpac’s market value after high costs and income pressure hurt its earnings. A stock buyback did little to soften the blow. The reaction is a warning to boss Peter King to up his turnaround game and prioritise profitability over market share.
Crypto is next fintech battle for India’s Gen Z 1 Nov 2021 CoinSwitch Kuber makes buying and trading bitcoin and ethereum easier than ordering a pizza. The $2 bln Coinbase-backed group is rapidly luring users who are new to financial investing. It’s a dicey path to building the next super-app, even if demographics are on its side.
Capital Calls: Microsoft vs. Apple, U.S. consumers 29 Oct 2021 Concise views on global finance: The software giant overtakes the iPhone maker to become the world’s most valuable company at $2.5 trln. Meanwhile, slower U.S. consumer spending in September is likely to be temporary; inventory glitches are bigger problem for Apple, Amazon.
Silicon Valley can’t slice and dice lower returns 29 Oct 2021 Veteran Sequoia is ditching its traditional VC model in favor of allowing the fund to hold assets indefinitely. It’s an effort to stay competitive as SPACs and others bid up unicorns. But extraordinary valuations and founders with the catbird seat can’t be papered over.
Deal crackdowns boost buyers without baggage 29 Oct 2021 U.S. merger watchdog Lina Khan is stepping up promises to thwart serial acquirers’ deal ambitions. What’s bad for the industry titans in the crosshairs, though, could be a boon for buyout barons and lawyers dreaming up novel ways to deal with the roadblocks.
Exxon is the stock investors will hate to love 29 Oct 2021 Like its peer Chevron, the U.S. oil giant has been blunt about its commitment to fossil fuels. A 60% jump in sales last quarter shows that paid off. With fewer drillers to feed returning demand, and crude above $80 a barrel, the companies are well placed for a mini-comeback.
Agnelli insurance bonus is asset-inflation victim 29 Oct 2021 The Italian clan revived a $9 bln sale of PartnerRe to Covéa at the same price as last year’s failed deal. But the French group is paying a lower premium for the reinsurer’s assets. Meanwhile, pumped-up valuations of potential targets mean the Agnellis’ windfall will go less far.
European banks’ bad-debt nerves outlive lockdowns 29 Oct 2021 Britain’s NatWest is retaining a chunk of the 3 bln pound dud credit buffer it built up last year. It’s a similar story for BNP Paribas and Santander. With global shortages denting growth, pushing up prices and potentially lifting interest rates, a careful approach is wise.