Facebook nears moment when world is not enough 29 Oct 2020 The summer’s ad boycott made no dent on revenue, which grew 22% in the third quarter, and didn’t deter the social network’s users. Facebook’s apps now reach 41% of the global population. Expansion on that front is bound to slow down. Revenue per user will get more important.
Amazon’s twin engines ready for the stratosphere 29 Oct 2020 The company had a stellar quarter from e-commerce and cloud computing. Those businesses were already good, and 2020’s challenges made them better. With a market value of $1.6 trln, Amazon is either a bargain or an antitrust target. Threading the needle is getting harder.
Nokia makes a meal of its Huawei free lunch 29 Oct 2020 The $19 bln telecom giant’s shares slumped after it slashed operating margins. New boss Pekka Lundmark is right to beef up investment to improve its 5G offering as China’s Huawei battles U.S. hostility. But right now Nokia is losing out on new business rather than snapping it up.
Ford accelerates turnaround with pickup pricing 29 Oct 2020 The $30 bln automaker blew past third-quarter estimates, reporting $2.4 bln in earnings. Vehicle prices benefited from low Covid-affected supply and hearty demand. That's a helpful bequest from the old CEO. It's now down to the new boss to deliver on electric-vehicle promises.
Corona Capital: Utah Jazz, Comcast, Kraft 29 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Utah Jazz’s owners sign off with a respectable return; Comcast shoots the light out on broadband; and Kraft rides the stay-at-home wave.
Arnault’s Tiffany tantrum was not worth the fuss 29 Oct 2020 The luxury tycoon trashed the U.S. jeweller’s management, went to legal war in Delaware and enlisted Paris to wriggle off the hook. In a U-turn, LVMH will now swallow its target for a discount of perhaps below $290 mln. That’s far less than the long-term hit to LVMH’s reputation.
UK banks’ mortgage wave may only be knee-high 29 Oct 2020 Lloyds CEO António Horta-Osório hopes a home-loan boom will offset pain from lower central-bank interest rates. But the spike in credit applications is partly pent-up demand from lockdowns. And stiff competition from HSBC and others may force lending margins downwards again.
Pandemic complicates AB InBev’s debt rehab 29 Oct 2020 The $93 billion brewer canned its interim dividend but its ideal leverage of 2 times EBITDA remains out of reach. CEO Carlos Brito is expected to step down soon, his successor will need cash to invest in brands hit by Covid-19. Selling another chunk of the Asian unit would help.
Beijing comes banging on real estate’s door 29 Oct 2020 The central bank has asked developers to report monthly investments, loans and more. It’s an extraordinary step to rein in China Evergrande and peers, which have amassed over $2.5 trln of debt. President Xi Jinping’s push to reallocate investment out of property is gaining steam.
Chinese lender IPO mess holds rules up to ridicule 29 Oct 2020 Xiamen Bank shares surged by the maximum allowable 44% in their Shanghai debut. That’s par for the course on primary mainland boards, but a day-two 10% plunge and trading halt are not. Semi-official guidance distorts bank pricing in particular, and is overdue for revision.
Big Tech backlash will hurt Little Tech more 28 Oct 2020 Facebook, Twitter and Google hide behind a law that protects them from liability for toxic content but lets them censor when they see fit. Removing that shield, as some lawmakers want to do, would be inconvenient and expensive for them, but brutal for smaller rivals like Yelp.
Boeing’s question is not how much but how long 28 Oct 2020 The $86 bln aerospace firm jettisoned $5.1 bln of cash in the latest quarter, not much better than the three months before. Other airborne industries are suffering too, but despite a reasonable balance-sheet cushion, Boeing is even less suited to endure prolonged disruptions.
Apollo would carry on just fine without Leon Black 28 Oct 2020 The 30-year-old investment shop is under intense scrutiny because of revelations about its co-founder’s dealings with the late sex offender Jeffrey Epstein. At this stage, credit eclipses buyouts anyway. And the firm has deepened its bench enough to move forward without Black.
Fiat and Peugeot need each other more than ever 28 Oct 2020 Jeep-maker FCA made a strong profit in its key North American market. That’s helpful for marriage partner Peugeot, whose European heartland faces new pandemic lockdowns. Neither has much business in rebounding China. Their 5 bln euros of merger savings can’t come soon enough.
GE boss reaches milestone in Sisyphean trial 28 Oct 2020 Larry Culp managed to offset damage from grounded planes and declining power-sector demand with helpfully timed payments to report positive cash flow in the third quarter. Other challenges remain, from debt to GE’s insurance business. Then there’s the existential part.
Deutsche CEO will dust off Commerz merger in 2021 28 Oct 2020 Despite a recent trading boom, boss Christian Sewing will soon have to scrap his 2022 profit target. Since further cost cuts are tricky, reviving a 2019 aborted union with Commerzbank is the logical Plan B. It helps that his bank is now healthier, and regulators more forgiving.
Corona Capital: Drugmaker’s pick-me-up, Golf M&A 28 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Drugmaker GSK sees a recovery in vaccinations against old-school ailments; meanwhile Covid-19 turns out to be a handy driver when it comes to golf-related dealmaking.
Daimler bags lux joyride on Aston Martin’s dime 28 Oct 2020 The $59 bln Mercedes-maker has traded some of its technology for a 20% stake in the James Bond marque as part of a wider 1.2 bln pound rescue. In return for access to battery-operated cars, CEO Ola Kaellenius gets a free option on a super-premium brand. It’s a trip worth taking.
Kazakh copper takeover looks opportunistic 28 Oct 2020 Kaz Minerals’ chairman and its biggest shareholder are offering 3 bln pounds for the London-listed miner. It’s a tiny 12% premium and selling now would mean missing out on the gains from a battery-powered boom. But with little hope for a rival deal, investors may still accept it.
Nomura cashes last post-dated efficiency cheque 28 Oct 2020 Chief Executive Kentaro Okuda pledged to reinvent the bank when he took over in April, and now he’s delivered higher pre-tax profit in its three main units with record input from overseas. Earlier revamps did a lot of lifting. That cues Okuda to start a deeper overhaul.