Shimano is too scared of going too fast 17 May 2021 The Japanese bicycle parts maker is riding high on pandemic-related demand. But its refusal to crank up output has aggravated a global bike shortage. The $20 bln family-run firm may worry the boom will fade. But if it doesn’t hit a higher gear, rivals like SRAM could take share.
Bitcoin passes the ransom test 14 May 2021 Sure, the crypto-asset isn’t widely accepted. But its appearance as a ransom in Colonial Pipeline's hack shows it shares useful features with the U.S. dollar – such as being easy to exchange. That unconventional sign of success means regulators are going to get even twitchier.
Netflix’s biggest threat lurks behind the curtain 14 May 2021 YouTube is lavishing money on creators and lapping up revenue from brands at a scorching pace. If the trend continues, the video network behind “MrBeast” could soon be worth as much as Netflix. The fact its value is hidden within that of parent Alphabet increases the danger.
Review: Serial director’s manual skims the surface 14 May 2021 Dambisa Moyo spent a decade in the boardroom of giant companies including Barclays, Barrick Gold and Chevron. In “How Boards Work” she explains how directors operate and how they must adapt. But given the events she witnessed, her account is lacking in personal reflection.
UK’s LBO rush risks a buyout baron faceplant 14 May 2021 Britain has drawn two-thirds of Europe’s $21 bln of take-private deals this year. That will rise if KKR and Cinven clinch John Laing and Sanne. A fast recovery helps, but many takeovers look pricey. The problem is that cash-rich buyout barons have little choice but to spend.
Capital Calls: Train bidding war 14 May 2021 Concise views on global finance: Canadian National increases its bid for U.S.-based Kansas City Southern.
Japan’s most expensive bank hides in a 7-Eleven 14 May 2021 ValueAct’s tilt at Seven & i involves deciding what to do with its 40% stake in the only Japanese lender trading over book value. Seven Bank mostly runs ATMs, a model threatened by digitisation. Yet it produces double-digit returns on equity, and a way to cash in on immigration.
Chinese podcast IPO starts on shrill note 14 May 2021 Tencent-backed Ximalaya, last valued at $3.7 bln, is going public. It boasts a diversified model of subscriptions, ads and live-streaming sales. But growth is slowing and rival Lizhi, which floated last year, is already underwater. A premium price tag could leave ears ringing.
Hertz Robinhood squad is right for wrong reasons 13 May 2021 The rental-car firm’s shares retained value through a restructuring process, partly thanks to retail investors' enthusiasm. After a bankruptcy-exit auction, shareholders are set to collect cash, shares and such worth over $1 billion. Next time, disappointment is more likely.
Knicks owners flirt with Humpty-Dumpty capitalism 13 May 2021 Shares of Madison Square Garden and its sister sports networks took a beating as the family controlling them plans to smush them back together. Returning to a conglomerate structure may benefit the empire-building Dolans, if not shareholders. Entrenched ownership has its price.
Poundland’s knock-down IPO is reassuringly cheap 13 May 2021 Pepco, owner of the chain that flogs cheap toiletries, is listing with a 4.8 bln euro price tag. Links to scandal-hit Steinhoff and weak sales growth justify a cut-price valuation of below 10 times this year’s EBITDA. If it can grab more market share, the discount won’t last.
Alibaba tightropes to please investors, Beijing 13 May 2021 A $2.8 bln antitrust fine resulted in a quarterly net loss, but the Chinese e-commerce giant expects annual sales to jump 30% to $144 bln. That should soothe jittery shareholders. Regulators, though, are increasingly at odds with Alibaba’s competitive edge – its vast data trove.
Drahi paints debt masterpiece with Sotheby’s bond 13 May 2021 The auction house owned by Patrick Drahi is raising $300 mln to fund a dividend. The tycoon may soon have recouped one-third of the cost of a 2019 acquisition by debt-funded payouts. The boom in such deals even for leveraged, cyclical businesses shows how desperate lenders are.
BT pries open door to broadband stake sale 13 May 2021 The UK telecom group may bring in an outside investor to help fund an extra 3 bln pound expansion of its fibre network. Dutch peer KPN has done something similar. For CEO Philip Jansen it’s the first step towards a bigger prize: flogging off a chunk of BT’s main Openreach unit.
Capital Calls: Disney misses the mark 13 May 2021 Concise views on global finance: Walt Disney reported nearly 104 million subscribers for its streaming flagship service.
ValueAct takes a tastier second bite of 7-Eleven 13 May 2021 Five years after activist Dan Loeb nudged things along at $40 bln Seven & i, Mason Morfit is trying his more genteel approach to change the convenience store owner. The last shakeup delivered limited value, but Japan’s evolving corporate culture makes this effort more promising.
Bitcoin U-turn recharges Tesla governance concerns 13 May 2021 Elon Musk has stopped taking the cryptocurrency for car payments after just three months on climate concerns. But bitcoin mining is a well-known intense user of dirty energy. The flipflop suggests Tesla’s oversight of its founder remains as lax as in the bad old days.
After public listing, Coupang keeps much private 13 May 2021 South Korea's e-commerce darling posted quarterly sales of $4.2 bln, up 74% from a year ago. But operating losses more than tripled, and Coupang is tight-lipped about costs and new investments. Shares are already below the March IPO price. Such opacity tries shareholder patience.
U.S. courts give Chinese firms a fighting chance 13 May 2021 Casualties in the Washington-Beijing crossfire have a potential ally: American judges. One just gave Luokung Technology a temporary reprieve from a U.S. investment ban due to inadequate evidence. Xiaomi won a similar exemption. The rule of law should give investors some comfort.
SoftBank fund paper gains are easy come, easy go 12 May 2021 CEO Masayoshi Son touted the Vision Fund’s 30% internal rate of return for backers including Saudi Arabia. It's driven by unrealised profit on recently floated companies like Coupang and DoorDash. Unwinding just one quarter of valuation uplift would take the IRR down nearer 10%.