Capital Calls: T-Mobile US, Ulta Beauty 12 Mar 2021 Concise views on global finance in the Covid-19 era: The U.S. telecom is benefiting from its merger with SoftBank’s Sprint; the U.S. cosmetics retailer revealed a tidy succession plan, but its business still faces lingering pandemic side-effects.
SoftBank financial innovation fails at Greensill 12 Mar 2021 The Japanese investor’s Vision Fund seems to love byzantine funding structures as much as disruptive technology. Its involvement with the supply-chain lender, which supported other investees, has backfired. It’s another cautionary tale for the ex-bankers in the fund’s ranks.
VW drives for second place in Tesla-led tech race 12 Mar 2021 Boss Herbert Diess wants to steer the $128 bln German automaker into the thick of the fast-growing market for in-car software. Closing the gap on Elon Musk’s outfit will be tough. But even a podium finish behind the leader would jump-start Volkswagen’s analogue valuation.
Grocery wars may hoover up JD’s profit crumbs 12 Mar 2021 Quarterly sales at the Chinese online retailer rose 31% to $34 bln from a year earlier. But $146 bln JD is barely breaking even and a push into online supermarkets, where rival Alibaba is muscling in too, will clip profitability. Boss Richard Liu is testing investor patience.
Coupang lives up to Masayoshi Son’s vision 11 Mar 2021 The South Korean e-commerce phenomenon is worth $109 bln after its shares popped 81% on their New York debut. Coupang has qualities synonymous with SoftBank tech bets: fast growth, lofty valuation, and a hyped-up founder. At least its path to profit has been modelled by Amazon.
BNP Exane deal takes equities dream an inch closer 11 Mar 2021 The $78 bln French lender will buy the rest of the brokerage it doesn’t own. The deal offers savings and better research to sell to clients. But CEO Jean-Laurent Bonnafé’s hope of challenging dominant U.S. banks requires other rivals to exit the business, like Deutsche.
Viewsroom: Greensill/Credit Suisse, GE, Diversity 11 Mar 2021 Big names in finance, like Credit Suisse and tycoon Sanjeev Gupta, are suffering collateral damage from the UK supply chain lender’s collapse. The sale of aircraft leasing brings GE closer to CEO Larry Culp’s light-bulb moment. And working from home risks a diversity disaster.
Capital Calls: Digital art 11 Mar 2021 Concise views on global finance in the Covid-19 era: A blockchain-protected work by Beeple sold for $69 million at Christie's.
Veolia gambles on Suez shareholder showdown 11 Mar 2021 The French group sweetened its 11.3 bln euros bid by pledging not to dismantle its target’s domestic waste and water business. Handing the unit to infrastructure fund Meridiam should reassure politicians and unions. All Suez CEO Bertrand Camus can do is haggle for a higher price.
Hong Kong’s rich confront Chinese socialism 11 Mar 2021 The central government is changing the city’s electoral system and side-lining the local business elite. That might clear the way for a new pro-Beijing party to attack economic inequality at tycoons’ expense. Yet the Communist Party has failed to do so at home, or anywhere else.
Aussies find promising mine to bury coal in 11 Mar 2021 The country’s dirtiest power plant will close early after an agreement between owner EnergyAustralia and the Victorian government. The deal will cut emissions, foster renewables and help displaced workers. It could be a blueprint for others, if the finances weren’t so opaque.
Cash flow sets runaway Roblox debut apart 10 Mar 2021 The games platform’s NYSE direct listing kicked off at a $42 bln valuation, up 43% from a funding round in January. With support on Reddit forums like those that boosted GameStop shares, the spike may be overdone. Still, at least Roblox has the rare quality of throwing off cash.
Boris Johnson will feel Gupta steel jitters too 10 Mar 2021 GFG Alliance says it has adequate funding, but key financing partner Greensill is collapsing. If Sanjeev Gupta’s industrial empire were to struggle, the UK leader has little economic reason to save its British operations. Yet domestic politics may still force him to step in.
GE’s aircraft deal is another long goodbye 10 Mar 2021 The conglomerate is merging its plane-leasing unit with Ireland’s AerCap. Boss Larry Culp will, for now, be stuck with just under half of a highly leveraged business. Investors in GE know that divestments can take years and that, in the meantime, they can't expect a clean break.
Utilities could use more Sage, less spice 10 Mar 2021 Activist Carl Icahn just jolted the U.S. power sector with a stake in $19 bln FirstEnergy. Paul Singer’s Elliott popped in and out, too. Yet utilities need to make grid investments that won’t immediately help shareholders. Warren Buffett's buy-and-hold approach fits better.
Capital Calls: McKinsey, Celebrity SPACs 10 Mar 2021 Concise views on global finance in the Covid-19 era: McKinsey’s new boss isn’t new enough; the SEC tells investors to be careful of celebrities bearing SPACs.
Greensill exposes perils of Credit Suisse strategy 10 Mar 2021 The supply-chain financier’s collapse affects almost every division of the Swiss bank. While the financial hit appears manageable, cooperation between its fund, wealth and lending arms increases risk. That’s worrying as CEO Thomas Gottstein’s growth plans hinge on collaboration.
SocGen’s sober revamp could use Russian vodka shot 10 Mar 2021 The 19 bln euro lender is overhauling its retail business to boost profitability. A bolder move would be to sell the Russia unit, which might fetch up to 2.9 bln euros from a rival like Gazprombank. CEO Frederic Oudea could then focus on more lucrative eastern Europe and Africa.
Panasonic turning dial too far on $6.5 bln deal 10 Mar 2021 After paring some sprawl, the electronics giant may now buy the rest of supply-chain software developer Blue Yonder. The faster-growing tech would help lift profitability, but at a hefty price of 40 times forecast EBITDA. Some $2 bln of erased market value speaks to the overload.
China’s dovish target hides hawkish fist 10 Mar 2021 China won’t sweat meeting its 6% GDP growth target this year given 2020’s low base plus ample fiscal support. The low bar gives President Xi Jinping room to keep up pressure on bad debt and crack down on misbehaving industries. For investors that means more volatility.