China’s Zillow builds hope for hard-up developers 17 Mar 2021 Ke’s adjusted net profit tripled in 2020 despite Beijing’s hawkish tone on frothy prices. The $77 bln Tencent-backed home broker is worth more than its U.S. peer and Australia’s REA combined. Its success is tempting property giants to get stuck in but the model is hard to copy.
Family feud presses Korea Inc to cry uncle 17 Mar 2021 A power struggle between Kumho Petrochemical’s chairman and his nephew is headed for a shareholder showdown. The dissident’s Elliott-like playbook already has persuaded the $6 bln company to improve governance and hike dividends. Winning a board seat would send a strong message.
Guest view: SPAC secret sauce could turn sour 16 Mar 2021 When blank-check companies identify merger partners, they make a feature of presenting optimistic forecasts for their targets' business. Lawyers at Freshfields explain why that could be a recipe for later attacks by activist investors and what to do to prepare.
Big Tech’s data virtue-signalling has casualties 16 Mar 2021 Apple and Google are making it harder for marketers to track individual users. It’s a no-brainer: the changes will cement their dominance and please privacy-focused regulators. But mobile-game developers and the rest of the $330 bln online advertising sector will feel the pain.
Capital Calls: Netflix, ECB, Glass Lewis, Zalando 16 Mar 2021 Concise views on global finance in the Covid-19 era: The streaming service’s password-sharing crackdown twists the knife; the central bank worries about identifying bad loans; the proxy adviser’s sale underscores its place on Wall Street; the online fashion giant’s bold targets.
Volkswagen valuation merits shift to higher gear 16 Mar 2021 The German automaker’s shares rose on plans to double electric vehicle deliveries this year. Were they separate entities, the value of VW’s software arm and its battery car unit could exceed its 110 bln euro market cap. While spinoffs look unlikely, VW shares can climb higher.
UK finance watchdog finds rare area to act tough 16 Mar 2021 The Financial Conduct Authority launched its first criminal case against a bank for allegedly failing to spot suspicious transactions. The humiliation for NatWest may be as damaging as any eventual fine. Harsher enforcement is reassuring given post-Brexit deregulation elsewhere.
Jardine restructuring could tempt an activist 16 Mar 2021 The Hong Kong conglomerate’s plan to end a double holding structure more than halved its discount to net asset value to 10%, per Breakingviews calculations. While that will ward off some pushy investors, others may smell a chance for more change. And there is plenty to clean up.
Unloved Chinese car site deserves a test drive 16 Mar 2021 The $12 bln online dealer Autohome raised $688 mln in its Hong Kong secondary listing, 30% less than initially planned. It’s not a sexy electric-vehicle maker, but an asset-light model and 40% net profit margin bests peers. As demand recovers, its current discount seems unfair.
Canada mobile deal turns loonies into toonies 15 Mar 2021 Rogers is paying rival Shaw a 69% premium to turn the top four telecoms firms into three. On paper, the buyer is paying too much. But if T-Mobile US-Sprint is a guide, the chance to jointly develop 5G is valuable, if Rogers can stomach the inevitable regulatory horse-trading.
Stripe’s $95 bln pop raises bar for payments hype 15 Mar 2021 The privately held group run by the Collison brothers raised money at almost triple its last valuation. It seems rich even next to listed peer Adyen. Investors in the companies are betting on a decade of breakneck growth. Rising competition means they can’t all be winners.
Capital Calls: Elon Musk, AstraZeneca 15 Mar 2021 Concise views on global finance in the Covid-19 era: The electric-vehicle maker’s jocular new title of “Technoking of Tesla” tests the theory that deeds matter more than words; fears over the drugmaker’s vaccine risk further delaying the re-opening of Europe’s economy.
Danone CEO exit gives France governance upgrade 15 Mar 2021 Boss Emmanuel Faber is leaving the 42 bln euro yoghurt maker after pressure from activist investors. It shows even French companies once declared strategic by the government are not safe from uppity shareholders. Underperformers whose chair is also CEO are now potential targets.
Axa delivers kick up derrière to green investing 15 Mar 2021 The French group will no longer insure RWE or invest in its shares due to its coal exposure. It’s harsh on the German utility, which also has extensive wind and solar power assets. But it may be a wakeup call for other big companies with less impressive decarbonisation plans.
Caymans may provide shelter in buyout storm 15 Mar 2021 Lowball takeover bids from bosses at China Biologic and Sina are tempting investor lawsuits in the Caribbean islands. Such M&A valuation challenges understandably have petered out in Delaware. Minority shareholders in Chinese companies, however, could use some extra protections.
Antipodean wind deal harnesses three power sources 15 Mar 2021 Two companies divvying up New Zealand’s Tilt Renewables for $2.1 bln are paying a 99% premium and 96 times earnings. The scarcity of green assets is one driver. A fragmented market is another. The buyers need their governments to fulfil clean energy pledges to justify the price.
Grab listing offers up an uber Uber 15 Mar 2021 Merging with a U.S. SPAC might value Singapore’s ride-hailing-to-food delivery giant at $40 bln. New bets on fintech expand its range beyond its U.S. peer and backer, and put it on a bumpier path to profit. But founder Anthony Tan can count on a Southeast Asian scarcity premium.
Coupang and Roblox fuel anti-IPO fire 12 Mar 2021 Two stock-market debuts support the notion that initial public offerings leave too much on the table. South Korean retailer Coupang’s huge initial price pop is Exhibit A. Games platform Roblox’s steadier first day suggests direct listings are better for finding a market price.
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.