Facebook-Instagram can open up instead of break up 2 Nov 2020 U.S. regulators are reviewing the 2012 social media merger. Unwinding deals years later is almost impossible. Busting up what exists today is one option. But forcing tech giants to make switching to rivals easier could be a more productive way to boost competition.
Double deal keeps payments M&A bandwagon rolling 2 Nov 2020 Weeks after agreeing a merger with domestic peer Sia, Italian group Nexi is seeking to buy Nordic operator Nets for around 7 bln euros. A quick deal brings cost savings and geographical diversification when rivals are tied up. But swallowing another large target adds complexity.
Corona Capital: Friendly’s and Dunkin’ Donuts 2 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Two Massachusetts casual-dining chains change hands, one in bankruptcy. Friendly's found Covid-19 even more unfriendly than did Dunkin' Brands.
Carmakers head towards Wile E. Coyote moment 2 Nov 2020 The cartoon character is noted for hanging suspended before falling to earth. Similarly, soaring second-hand sales are shoring up used-car values and carmaker balance sheets. As and when state support for workers rolls off, a wave of defaults could send both downwards.
Brace for a post-euphoric Ant IPO swoon 2 Nov 2020 Investors set records in their bids for the Chinese fintech giant’s $34 bln stock sale. The fear of missing out is a powerful drug. Even if Jack Ma’s company eventually lives up to mammoth expectations, the market honeymoon can be short if Facebook and Alibaba are any guide.
China’s latest five-year plan girds for battle 2 Nov 2020 The 2021-2025 blueprint lacks a growth target despite a longer-term GDP per capita goal. That suggests Beijing is aiming for quality over quantity. An emphasis on military defence and technology self-sufficiency also speaks to anticipated geopolitical and corporate arms races.
Exxon is shrinking in all the wrong places 30 Oct 2020 The $137 bln oil giant is laying off staff and posting losses. It continues to bleed money, and over the past decade spent $15 bln more on its dividend and capex than cash generated by its business. As its earnings get smaller, its balance sheet gets weaker.
Review: What can be more premium than luxury? 30 Oct 2020 The next generation of affluent shoppers will spend more on experiences and edgy products, says Erwan Rambourg in “Future Luxe”. That may dim the appeal of classic deluxe products like Gucci bags or Cartier watches. Luxury will be more about what you do than just what you own.
Corona Capital: Netflix price hike 30 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: The streaming-video service hiked the price on subscriptions as binge-watching booms during the pandemic.
Bank dividend bans have passed their sell-by date 30 Oct 2020 European supervisors in March halted payouts so that lenders could keep credit flowing and absorb losses. Yet earnings and capital have held up, while bond markets are booming. Regulators can drop the restrictions, as long as banks keep big shock absorbers and don’t cut lending.
Naspers finds one bargain internet stock: its own 30 Oct 2020 The $82 bln South African group and its Amsterdam-listed offshoot have lagged behind a surge in big technology stocks this year. A $5 bln buyback highlights the discount to its stake in China’s Tencent and shows it won’t chase overpriced deals. Other investors should take notice.
Spain’s cheapest bank is only for the brave 30 Oct 2020 Sabadell is worth less than a fifth of its 11 bln euro book value. With rivals consolidating, it could become a target for BBVA or Santander. While lowly capital buffers leave little room for a spike in bad debts, cost savings worth 6 bln euros mean a deal could still make sense.
Trump vs. Biden is sideshow for Xi 30 Oct 2020 U.S. elections are closely followed in China, but the outcome of this year’s presidential ballot may matter less this time. Trump's tough act on Beijing has wrought little real damage. And while neither candidate is likely to thaw relations, the pandemic has left America weaker.
Lufax slips softly priced IPO past Ant hullaballoo 30 Oct 2020 The Ping An-backed Chinese fintech outfit has garnered less hype than Jack Ma’s record-shattering rival. It isn’t growing as fast, but its online lending unit is profitable and established. A $33 bln valuation, at 13 times forecast 2021 earnings, makes for a compelling option.
Apple’s reinvention risks are yet to be priced in 29 Oct 2020 Services revenue surged 16% in its last quarter to $14.5 bln. With iPhone markets mature, it's the main reason Apple's stock price has doubled in two years. Yet rivals and regulators have that business in their sights. The company's $1.9 trln valuation assumes they get nowhere.
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.