Grab’s tiny deal spotlights big Indonesia turf war 30 Jul 2021 A deal to shore up ties with a Jakarta conglomerate recalls the country’s importance for the super-app’s growth ahead of its $40 bln New York debut, and as top local rivals merge. Grab’s Southeast Asian footprint has benefits, but Indonesia carries outsize strategic value.
Review: Turning Beijing’s playbook against it 30 Jul 2021 China wants to become a global hegemon, Rush Doshi, the White House’s lead China wonk, argues in “The Long Game”. To halt its advance, he suggests copying Beijing’s strategy, and discouraging U.S. corporate engagement with China by tweaking taxes. He has few allies and less time.
Evergrande’s downward spiral runs off the page 30 Jul 2021 Beijing managed the market impact when it allowed quasi-state entity HNA to slide into bankruptcy. It will face more complex problems if privately-run Evergrande folds. The longer authorities wait to signal support, the more pages it will need to add to its corporate disaster playbook.
New Amazon CEO will have cloud and ads in his cart 29 Jul 2021 Andy Jassy now has the reins at the $1.8 trln group. E-commerce is the base, but cloud services and advertising, both growing fast and with high margins, account for the bulk of operating profit. The two businesses face challenges: one from competitors, the other from regulators.
Robinhood spoons up taste of own medicine 29 Jul 2021 The limp day one stock performance of Vlad Tenev’s online brokerage following its $32 bln IPO says little about its prospects. Consider Facebook’s debut on the one hand, or Ask Jeeves on the other. The sour part is that rapid growth for Robinhood depends on share prices going up.
TPG-backed vacation deal is a worthy destination 29 Jul 2021 One of the private equity firm’s SPACs is merging with Vacasa in a $4.5 bln deal. The firm helps owners list and manage their vacation properties including on Airbnb. The management is experienced, the concept is solid and Vacasa could be a strategic fit for others down the line.
SPAC sheriff shows up not a moment too soon 29 Jul 2021 The U.S. Department of Justice accused electric-truck maker Nikola’s founder Trevor Milton of making false and misleading statements. He had already stepped down from the $5 bln firm. But investors have started pushing back elsewhere. These are needed steps to legitimize SPACs.
IPO U-turn is probably Didi’s most sensible route 29 Jul 2021 The beleaguered $40 bln Chinese ride-hailing group denied a report that it plans to go private a month after its U.S. debut. Changing course would be embarrassing and quite costly. But it may be the best way to get back in Beijing’s good graces amid a continuing crackdown.
Viewsroom: Climate transition, Chinese stocks 29 Jul 2021 Some of the biggest investors, including Brookfield and TPG, are launching mega-funds to invest in the global transition to a net-zero economy in what could be the ultimate new asset class. Richard Beales and Rob Cox discuss. Plus, Beijing’s crackdown on after-school tutoring.
Big Oil’s generosity has limited shelf life 29 Jul 2021 Royal Dutch Shell and Total will return billions of dollars to investors. High crude prices mean they can cut debt, invest in green energy and crank up payouts. Such largesse may get harder given growing pressure to cut emissions. Prudent payouts will limit future disappointment.
Danone board gets much-needed upgrade in a Schnepp 29 Jul 2021 The $46 bln dairy group’s chairman will replace nearly all its directors in two years, drawing a line under years of misses, crummy governance and underperformance. Adding more consumer-goods expertise and international heft should help narrow Danone’s chunky discount to peers.
Capital Calls: U.S. GDP 29 Jul 2021 Concise views on global finance: Supply chain woes are tripping up solid U.S. economic growth. GDP grew 6.5% in the second quarter, a big miss from estimates of 8.5%.
Robinhood at $32 bln more option than meme-stock 29 Jul 2021 The digital brokerage’s IPO values its 21.3 mln customers at about $1,500 each, below one-tenth of peer Interactive Brokers. Robinhood users have less in their accounts, but demographics are on their side. For investors unfazed by its quirks, Robinhood’s beachhead has real value.
Samsung scrambles signals out of Southeast Asia 29 Jul 2021 The Galaxy maker partly blamed Vietnam’s virus resurgence for a 24% decline in mobile unit sales from the previous quarter. Low vaccination rates are thwarting the region’s recovery and raise fresh questions about just how reliable it can be for suppliers shifting out of China.
Facebook is a one-trick pony that can still kick 28 Jul 2021 Mark Zuckerberg’s firm raked in $29 bln in quarterly revenue, almost all of it from selling ads. Unlike rivals, Facebook hasn’t found a reliable second source of revenue and says its growth is slowing. Even so, with TV on the decline, there’s more than enough to go around.
Evercore’s pay has the sweet kind of inflation 28 Jul 2021 The biggest impediment to the M&A trade now is not a lack of deals but a shortage of bankers to execute them. That’s why pay is surging. The $6 bln boutique is threading the needle with comp jumping less than revenue. But keeping talent, even at Evercore’s top, won’t be easy.
Apollo SPAC offers cheap ride on EV hype freeway 28 Jul 2021 Electric vehicle charging group Allego is listing through one of the buyout firm’s blank-cheque companies for $3 bln. It’s a crowded space, but a valuation multiple of 5 times 2024 sales is less racy than rivals. Still, only booming battery car demand will avoid a short-circuit.
Pfizer’s pandemic wealth produces ideal dealmaker 28 Jul 2021 The pharma giant raised its 2021 guidance, partly due to bumper Covid-19 vaccine sales. Free cash flow could hit $20 billion this year as a result. Even if share buybacks resume, CEO Albert Bourla has scope to take advantage of cheap biotech valuations by making acquisitions.
Temping giant pays rich price for staying power 28 Jul 2021 Switzerland’s Adecco will buy Belgium’s Akka for $2.3 bln. The deal accelerates its shift towards technology consulting and away from low-growth businesses like short-term office workers. But the returns seem thin and rely partly on revenue boosters, which look challenging.
Bolder smoke-free goals can singe BAT discount 28 Jul 2021 The Camel maker’s first-half sales grew 8% and it’s on track to generate 5 bln pounds in revenue from products like vapes by 2025. Yet its stock trades at half rival Philip Morris International’s multiple. U.S. exposure is partly to blame, but a bigger target would help too.