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%.
Germany becomes food delivery battleground, again 12 May 2021 Delivery Hero is returning to the market it exited in 2018, while Uber is also preparing to take a bite. The pandemic has given Germans a taste for home-delivered meals, boosting market leader Just Eat Takeaway. With big players piling back in, shareholders may go hungry.
Naspers goes all-in to crush South Africa discount 12 May 2021 The $100 bln internet group will swap shares with Dutch offshoot Prosus, removing some pressure on its stock. The resulting cross-shareholding is as far as CEO Bob van Dijk can go. Shrinking Prosus’ persistent shortfall to its $212 bln stake in China’s Tencent is a harder task.
Buyout shop’s UK healthcare punt needs steady hand 12 May 2021 Clayton, Dubilier & Rice is buying UDG Healthcare for $3.7 bln. It’s a way to profit from Big Pharma’s need to cut costs and outsource drug development. But a post-crisis share bounce means the price isn’t cheap, and high returns aren’t assured. Some savvy dealmaking may help.
UK chip IPO offers pricey harbour in tech squall 12 May 2021 Semiconductor design firm Alphawave IP is listing in London at $4.3 bln, even as other floats are pulled and technology stocks struggle. A lack of local peers explains the appeal. But a rich valuation means investors need to believe it can develop new products, and fresh clients.
Chips may yet drive Japanese carmakers closer 12 May 2021 Shares in Nissan closed down 10% after it dashed hopes for a return to profitability. Yet Toyota predicted operating earnings will grow 14%. The semiconductor shortage helps explain the difference. The longer that drags on, the more Toyota risks a slowdown, too.
Capital Calls: Amazon EU tax win, Scooter SPAC 21 Jan 2022 Concise views on global finance: Jeff Bezos’s e-commerce giant wins a victory over the European Union, but the battle has already moved on; Bird’s $2.3 billion price tag is relatively high but less pie-in-the-sky than some recent deals.
Tesla will give up pole position in China 12 May 2021 A series of blunders has made Elon Musk’s marque a target for state media. Its huge share of the electric-vehicle market and lack of local partner also leave it exposed as Beijing backs domestic carmakers. The $600 bln brand can still prosper, but not as leader of the pack.
Mitsui’s hospital buyout needs a healthy ward 12 May 2021 The Japanese trading house may take southeast Asia-focused IHH private, per Bloomberg. It fits the commodity giant’s search for steadier revenue but spending $9 bln for the 67% it doesn’t own would be a strain. Outside partners can help it keep its healthcare hopes in good shape.
Ginkgo’s $17.5 bln SPAC deal presupposes success 11 May 2021 Producing bespoke cells for manufacturing has potential, ranging from greener plastics to lab-produced cannabis compounds. Moderna’s valuation shows the potential of investing in a singular platform. But there are plenty of duds, and Ginkgo’s deal bakes in no room for error.
Europe’s late SPAC boom turns kinder to investors 11 May 2021 Italian banker Claudio Costamagna and British investor Ian Osborne are listing blank-cheque companies on the Continent. Their offerings try to better link founder rewards to shareholder returns. With the market for SPACs looking crowded, fairer structures will be more common.
Commerz equities deal holds lesson for big rivals 11 May 2021 The German lender is outsourcing share trading to regional broker ODDO. It’s a neat way to quit a low-margin business while keeping corporate clients happy. The logic of a consolidating sector may force others with subscale markets units, like SocGen and HSBC, to follow suit.
The Exchange: Finance far away from Wall Street 11 May 2021 It’s not often we hear from the boss of a finance business based in Milwaukee. Even more unusual is to find one that is owned by its customers. Rob Cox chats with Northwestern Mutual CEO John Schlifske about investing, interest rates, ESG and the benefits of mutual ownership.
Capital Calls: Uber, Roblox 11 May 2021 Concise views on global finance: Free rides for Covid jabs won’t help the ride-hailing app’s labor battle with Washington; the online games platform’s year-on-year growth decelerated sharply in April.
China population slowdown speeds up labour crisis 11 May 2021 Census data show the country’s 1.4 bln people are barely growing, adding to fears that a shrinking workforce will hurt the economy. Beijing has targeted birth rates but policies to boost productivity are needed. Cracking down on how gig workers are treated is a good start.