Airlines’ constraints send investors to the tarmac 20 Oct 2021 Southwest’s network melted down earlier this month with thousands of canceled flights. It in part reflects a faster recovery, thanks to a domestic focus. But a disproportionate rebound has shown up in stock prices. Now efficient airlines are butting up against self-made problems.
Capital Calls: Spanx’s “velvet ghetto” 20 Oct 2021 Concise views on global finance: Blackstone’s investment in the undergarments company was closed by an all-woman team. That’s progress, but not the best kind.
Credit Suisse’s exorcism has only just begun 20 Oct 2021 Chair António Horta-Osório banished one demon by settling a Mozambican scandal for $475 mln. The Swiss bank also closed the book on a spying saga. Yet a U.S. deferred prosecution agreement prolongs the haunting. And the ghosts of clients Greensill and Archegos still linger.
Burberry’s new boss revives upmarket hopes 20 Oct 2021 The UK maker of chic trench coats poached Versace boss Jonathan Akeroyd to be its next CEO. He pushed up the Italian brand’s sales by focusing on high-margin products. Burberry is eager for a similar luxury glow. Yet the $10 bln group’s scale makes it a much bigger challenge.
“Squid Game” powers Netflix earnings in two ways 19 Oct 2021 Its South Korean smash hit helped net 4.4 mln new subscribers. But “Squid Game” also shows a potential path to lower content costs. Finding cheap international gems as an alternative to pricy Hollywood content could change Netflix’s financial math for the better.
First bitcoin ETF is test for fans and watchdogs 19 Oct 2021 ProShares’ new U.S. fund based on bitcoin futures lacks the direct holdings enthusiasts might prefer. But it's a way to get tradable exposure without the hassle of digital wallets and such. An orderly debut could ease regulators' resistance to ETFs that buy crypto directly.
Inflation is one product P&G isn’t pushing 19 Oct 2021 The $346 bln consumer goods company increased prices 1% across divisions that sell razors and toothpaste in its latest financial quarter. But its own costs jumped 13%. Inflation will take its toll, but P&G has profit and cash to spare. In tough environments, it pays to be big.
Capital Calls: Apollo, god of basically everything 19 Oct 2021 Concise views on global finance: The asset manager firm’s new CEO Marc Rowan wants to oversee $1 trillion in funds by 2026. The market is at least giving him credit for trying.
Rapid grocery delivery will keep investors waiting 19 Oct 2021 Loss-making startups from Getir to Deliveroo are ferrying booze and nibbles to homes in under half an hour. Economies of scale will eventually help, although most operators will at best break even. Until delivery robots come along, shareholders will be subsidising lazy living.
Wise’s profit-purpose balancing act may get harder 19 Oct 2021 The $13 bln fintech that wants to disrupt currency transfers is cutting foreign-exchange fees to win more users. Yet meeting investors’ revenue expectations while slashing prices looks tricky. CEO Kristo Käärmann may eventually have to irk either shareholders or customers.
Road to COP: Making companies do better 19 Oct 2021 Anne Simpson is one of the key figures in U.S. climate finance. As head of Board Responsibility at U.S. pension fund CalPERS, it’s her job to give companies a hard time if they shirk on decarbonisation. Ahead of November’s critical COP26 conference, she chatted to George Hay.
Volvo Cars’ IPO valuation is suitably smoggy 19 Oct 2021 The marque owned by China’s Geely could be listed at around $21 bln. Hiving off the combustion engine unit was meant to boost its green bona fides. Yet a reliance on gas guzzlers and optimistic battery targets mean the Swedish group will struggle to stand out from dirty rivals.
Goldman plays with hot tar in Japanese buyout 19 Oct 2021 Minority investors reckon the Wall Street bank, partner Eneos and target Nippo are steamrolling them with a bid valuing the roadbuilder at $4 bln. They have a point: The offer looks cheap and the deal governance subpar. The onus is on Goldman to show it’s managing any conflicts.
Time to end Richemont’s online fashion drag 18 Oct 2021 The Cartier owner may sell its e-commerce business YNAP just three years after taking it over. A deal with Farfetch or other rivals might reap at most 3.6 bln euros. Yet, by cutting exposure to a lossmaking unit, boss Johann Rupert would smarten up his company’s dowdy valuation.
Crypto puts U.S. and El Salvador in the same boat 18 Oct 2021 Hispanic and Black people are top American owners of digital currencies. Discrimination and lagging access to financial services are drivers and are among the better reasons why the Central American nation turned to bitcoin. It’s a lost opportunity for traditional banks.
Merck has upper hand with Acceleron dissidents 18 Oct 2021 The biotech target's 7% shareholder, Avoro Capital, is among funds that reckon the roughly $11 billion price Merck is offering is not high enough. There are arguments on both sides. But knocking the deal off course will be tough, especially as other bidders didn't emerge.
Capital Calls: Klarna, French vaccine, Philips 18 Oct 2021 Concise views on global finance: The $46 bln Swedish buy-now-pay-later company tries to outrun Britain’s financial watchdogs; Valneva’s Covid-19 shot may prove better than the UK’s home-grown version; the industrial giant sees light at the end of the supply-chain tunnel.
Russian IPO salad hides some dodgy ingredients 18 Oct 2021 Helped by a global boom, new listings by the country’s companies are at their most active since 2007. Investors are more used to sanctions risk, while Covid-19 has spruced up hopefuls such as real estate website Cian. Others, like St Petersburg’s bourse, may be lumpy leftovers.
London’s IPO revamp gets its cautionary tale 18 Oct 2021 THG’s founder is giving up his golden share in the stricken online retailer, just as regulators prepare to make it easier for executives to keep control after listing. It’s a timely reminder of the benefits of “one-share-one-vote” governance. It’s not too late to turn back.
Evergrande contagion may be nearing its peak 18 Oct 2021 China’s central bank reckons the indebted property developer is a bad apple in an otherwise “healthy” industry. That’s too generous: Evergrande’s woes may yet drag weaker players down and have wider impacts. But the chance of a domestic systemic financial crisis is falling.