China’s property tax will grow sharper teeth 27 Oct 2021 President Xi Jinping has thrown his weight behind an unpopular but economically beneficial real estate levy. Previous experiments in Shanghai and Chongqing disappointed, so the next round of trials could be harsher and riskier. It will test Xi’s power and policy creativity.
Google antitrust boogeyman is lurking in the wings 26 Oct 2021 Parent Alphabet’s quarterly revenue rose 41% and its stock has outperformed rivals. U.S. political anger is fixated on Facebook, but the search engine is more exposed in regulatory probes. A lawsuit revealing evidence of anti-competitive behavior is a reminder of the threat.
Microsoft revs up for return to office 26 Oct 2021 The $2.3 trln software giant benefited from work from home in the past quarter as cloud and PC software sales boomed. Spending on IT is shifting focus, but not letting up. Microsoft’s scale, the fact it’s not Amazon, and rising security awareness set it up for continued growth.
Sports pros play risky offense-only investing game 26 Oct 2021 Athletes like hoops star Kevin Durant and managers such as Billy “Moneyball” Beane are backing deals in the live entertainment and ticketing arena. Ebullience around resurging fan bases is validating crazy valuations. But in money as in sport, fundamentals will prevail over hope.
Rent the Runway models two clashing looks 26 Oct 2021 The clothing-rental company is pitching a way to lessen the load on its balance sheet as it plans to go public. It’s trying to share the risk of wear and tear of dresses and coats with designers. If it can be less Avis, more Airbnb, its $1.3 bln valuation could be a good fit.
Novartis’ generic surgery will improve its health 26 Oct 2021 The $207 bln drugmaker is considering the future of its ailing copycat-drugs unit. With few obvious buyers, CEO Vas Narasimhan may have to accept a knockdown price or sell it in pieces. Either option should deliver a better prognosis for the rest of his business.
UBS’s U.S. wealth management push lacks oomph 26 Oct 2021 The Swiss bank plans to lend more to wealthy clients while reaching new ones through a digital service. That should boost margins in the region but faces competition from rivals like Morgan Stanley. CEO Ralph Hamers would be better off bulking up through M&A, or selling out.
Capital Calls: Fantasy-sports group M&A flop 26 Oct 2021 Concise views on global finance: DraftKings has walked away from Entain but the UK target may still attract interest.
Crown deserves the Jamie Dimon approach to failure 26 Oct 2021 The Australian casino operator can keep its local licence despite investigators labelling its breaches “illegal”. It smacks of too big to fail. Penalising investors, selling assets and burying the name, as JPMorgan’s boss suggested for bad banks, would be a better outcome.
Aussie telecom deal borrows from Beijing playbook 26 Oct 2021 Telstra is buying Digicel’s South Pacific arm in a deal designed to keep the business out of Chinese hands. Taxpayers Down Under will cover most of the $1.6 bln price tag. That helps protect shareholders, but it’s also a disconcerting mix of politics and private capital.
Mark Zuckerberg’s dive into metaverse misses mark 26 Oct 2021 Alongside quarterly results, Facebook said it would start reporting more financial details on its virtual reality initiatives and beyond. Any extra clarity is welcome, but the structural changes sidestep all-important Instagram. It’s a bad time to be hiding behind the headset.
Breakdown: COP26 gets an ambitions downgrade 25 Oct 2021 An energy crisis and no-show from Xi Jinping are undermining next week’s critical climate gathering in Glasgow. Getting all states to set 2050 net-zero goals is a stretch. Maintaining some momentum via nearer-term pacts in areas like phasing out coal has more chance of success.
Facebook black box is overdue for cracking open 25 Oct 2021 Waning ad growth and slowing adoption by young users suggest investors deserve more clarity, starting with disclosure of Instagram’s numbers. Revelations about how Facebook polices content demand transparency too. Mark Zuckerberg’s $915 bln empire could help itself by opening up.
Frankenstein’s watchdog can tame Big Tech monster 25 Oct 2021 Combining FCC-style oversight of U.S. broadcast stations with the OCC’s supervision of banks and FDA’s drug vetting could bring needed policing to firms like Facebook. Being regulated by an uber monitor is a nuisance. But it isn’t unprecedented and may even diffuse some vitriol.
Capital Calls: Zooplus frenzy, Volvo 25 Oct 2021 Concise views on global finance: Buyout barons EQT and Hellman & Friedman are going halves in their pursuit of the $4.3 bln petfood supplier; the $19 bln Swedish carmaker priced its IPO at the bottom of the range.
Price of Andrea Orcel’s next deal just went up 25 Oct 2021 Rome balked at the UniCredit CEO’s request to inject 6 bln euros into state-owned Monte dei Paschi, ending M&A talks. The banker could still use a quarry to propel UniCredit shares. He can consider smaller Banco BPM, revisit MPS or look abroad. The best Plan B won’t be cheap.
HSBC redemption rests on optimistic Asian growth 25 Oct 2021 The UK-based bank’s CEO Noel Quinn is less worried about bad debt and will buy back $2 bln of shares. Yet his main strategic goal, a 10% return on tangible equity, remains in doubt. It requires racy revenue increases in China, India and elsewhere. A lot could still go wrong.
Trump SPAC is the last thing U.S. watchdogs need 22 Oct 2021 A blank-check firm’s deal with former President Donald Trump could be a toxic cocktail for top markets cop Gary Gensler. Not because of the potential for investor abuse, but because it risks drawing the SEC and other regulators further into a counterproductive political quagmire.
Gerson Lehrman IPO “edge” is it doesn’t have one 22 Oct 2021 Linking investors eager for insight with industry insiders is lucrative. Gross margins over 70% look ripe for rival expert networks to eat. GLG's emphasis on compliance after an insider-trading scandal, however, makes it look like a safe source of validation for clients.
Snap is better off without the rose-tinted filters 22 Oct 2021 Losing $25 bln of market value in a day is a blow for the disappearing-message app, which has blamed Apple for making it harder to squeeze profit from users. But Evan Spiegel’s firm is still growing its audience, and by some measures looks cheap relative to its rivals.