U.S. mortgage deals build on shaky foundations 23 Sep 2020 Public markets are luring two big mortgage firms as low rates and resilient house prices send loan demand to record levels. But 2020’s pandemic-skewed market is wacky, risky and unsustainable. Taking more share from banks could justify investor hype, though is hardly guaranteed.
Corona Capital: LVMH and Macron, Eyewear deals 23 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: LVMH has friends in high places; 1-800 Contacts has semi-disposable owners.
Russian tech giant Yandex leaps into superapp race 23 Sep 2020 As China and the U.S. battle over access for each other’s tech groups, the $23 bln search engine is snapping up online bank Tinkoff for $5.5 bln for a pricey 4 times book value. But it adds the fintech component to CEO Arkady Volozh’s ecosystem of ride-sharing and e-commerce.
UniCredit should hold out for a Tuscan freebie 23 Sep 2020 Rome wants to wedge ailing Monte Paschi into Italy’s No. 2 bank, whose CEO, Jean Pierre Mustier, has resisted political urges to merge. Holding out for a deal as good, or better, than rival Intesa got in a similar bank rescue makes sense. Consider the financial goodies on offer.
Elon Musk, investors share a rare dose of realism 22 Sep 2020 The Tesla boss’s plan to slash battery costs and ramp up sales put the stock into a 12% reverse. A three-year time frame jarred, and he oversold the event too. Musk’s pitches usually prompt an acceleration. It’s a welcome sign that CEO and shareholders are toning down some hype.
Xi puts clean energy to good use beyond climate 23 Sep 2020 China’s president says his country will be carbon-neutral by 2060. The pledge is credible because it’s in Beijing’s interests; Xi may also be trying to warm frigid European negotiators, and defang sceptics. It’s also plausible because China is exporting pollution to poor countries.
M&A 101 will speed end of Tata’s investor fight 23 Sep 2020 After a long legal spat, the family of ousted chairman Cyrus Mistry is ready to sell its 18% stake in the holding company of Tata group. But a mooted $24 bln price tag double counts the value of India’s top household name. The conglomerate has rare reason to play down its brand.
Elliott mixes activism and a buyout, gets poison 22 Sep 2020 Paul Singer’s hedge fund amassed a 15% interest in Cubic, then offered to buy it. The transport and defense tech company responded with a poison pill, understandably on this occasion. Shareholders are hoping for a deal. But Elliott may have played its cards in the wrong order.
U.S. WeChat ban adopts China’s Great Firewall 22 Sep 2020 A U.S. judge gave WeChat a break from an order barring downloads to protect national security. But the White House still wants to push out Chinese tech, echoing Beijing bans of American internet firms. It’s a road map for more censorship and ups the ante on online protectionism.
Nelson Peltz prods Comcast into a defining moment 22 Sep 2020 The activist’s hedge fund has taken less than 1% of the $204 bln entertainment firm. The small stake plus boss Brian Roberts’ big voting interest give the corporate cage rattler tough odds. Still Comcast, with its mix of pipes and content, leaves room for valuation improvement.
Corona Capital: Coca-Cola, Viral inequality 22 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: Coca-Cola, once an icon of temperance, is diving into the hard seltzer market; and California is considering using the disparity in numbers of Covid cases between neighborhoods to steer its response.
Navalny cloud may yield green energy silver lining 22 Sep 2020 A suspected Novichok attack on the Kremlin critic further complicates German links to Russia via the new Nord Stream 2 pipeline. For now, gas needs mean Berlin can’t bow to U.S. pressure to ditch the project. But it should add impetus to the drive for alternative energy sources.
UK insurers’ regulatory bruises will heal quickly 22 Sep 2020 Direct Line and RSA shares fell after Britain’s Financial Conduct Authority proposed that existing customers shouldn’t pay higher rates than new ones. Spiking Covid-19 claims are hitting the sector too. But with the FCA pain evenly shared, the move may actually help margins.
Tiffany’s fast-track court victory is a trinket 21 Sep 2020 A Delaware judge ruled for a speedy trial to decide whether LVMH must go ahead with its $16 bln takeover of the U.S. jeweler. But the three-month wait is still a long time to be left dangling. If LVMH names a new, lower price, Tiffany will find it hard to dismiss it out of hand.
Mulan flounder previews Hollywood’s next red scare 22 Sep 2020 Disney was slammed for shooting the $200 mln movie in restive Xinjiang, yet the release was widely panned in China too. Despite the pandering, Hollywood can’t get what it wants from the film market. Beijing is also unhappy. Studios are next in line for a trade-war screening.
Goldman M&A moves suggest times aren’t a-changing 21 Sep 2020 Despite CEO Solomon’s goal of banking companies with diverse boards, his new crop of M&A heads and chairmen is predictably white and male. Goldman may want to be an agent of change, but making a break with the past is hard – especially when the M&A top spot is Solomon’s to lose.
Microsoft launches $7.5 bln gaming war of addition 21 Sep 2020 That’s what CEO Satya Nadella is paying for ZeniMax, owner of games like “Fallout.” The aim is to persuade more users to enlist in Microsoft’s subscription service and force providers like Apple to stream content on its terms. Success would make Microsoft look unstoppable.
Illumina takes pricey round-trip to find its Grail 21 Sep 2020 The $40 bln firm found out by accident years ago that it could detect cancer using genetic sequencing. It spun out Grail in 2017, bringing in cash from new investors. Now it's spending $7 billion to buy it back. Grail is a hot property, but it competes with Illumina's customers.
Founder’s exit shines headlights on Nikola backers 21 Sep 2020 Trevor Milton is stepping down at the "pre-revenue" zero-emissions vehicle maker. Investors have nixed almost half the company's worth since fraud claims surfaced. Proving Nikola is worth its remaining $9 bln value falls on partners like GM and CNH and on new Chair Steve Girsky.
SocGen surrender may spark ETF M&A wave 21 Sep 2020 The French bank may sell its Lyxor unit, which manages index-tracking exchange-traded funds. That could give CEO Frederic Oudea over 1 bln euros to absorb Covid-19 losses. Brutal fee pressure and BlackRock’s dominance mean punier rivals will need to scale up or get out too.