Tencent’s hot sauce fraud exposes expired tech 3 Jul 2020 The Chinese video-games titan appears to have been taken by crooks pretending to work for Lao Gan Ma, a popular spicy condiment, using a forged company seal to ink an advertising deal. Such old-fashioned methods have embroiled others including SoftBank. Digitisation is overdue.
Viewsroom: Wirecard, Hong Kong and Tesla 2 Jul 2020 The German fintech scandal shines a light on its hapless regulator; China’s new security law stinks up the fragrant harbor and Elon Musk hasn’t just surpassed Toyota in market value, he’s becoming as rich as Croesus. Breakingviews columnists around the world weigh in.
YRC bailout throws U.S. taxpayers under the truck 2 Jul 2020 The Treasury is, unusually, taking a 30% stake in a freight company it says is an essential military supplier. On several measures, though, it’s a poor trade. The debt on offer is too cheap, the government won’t have voting influence, and YRC is far from a governance role model.
BaFin’s rejuvenation starts with finding new boss 2 Jul 2020 The German regulator investigated journalists and investors rather than fraudulent Wirecard. Beefing up oversight of payments and auditing will have little impact if the watchdog doesn’t properly use its powers. Change is unlikely while President Felix Hufeld remains in charge.
Norilsk Nickel underlines funds’ ESG blind spot 2 Jul 2020 The Russian miner had a bad pollution record even before it leaked 21,000 tonnes of fuel in the Arctic Circle. Passive investors like BlackRock have pledged to engage more closely with ESG miscreants. But when the company is controlled by oligarchs, they may just be ignored.
Corona Capital: Tesla, OPEC 2 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Tesla speeds past its traditional rivals, and OPEC’s next meeting shapes up to be a bruising encounter.
Oil majors’ Atlantic divide shows up in valuation 2 Jul 2020 U.S. and European producers’ divergence in climate change action is becoming increasingly obvious. Yet investors value Exxon Mobil and Chevron higher than Royal Dutch Shell and BP. At least for now, investors seem reluctant to view energy transition awareness as a good thing.
Pinduoduo is stuck in startup governance mode 2 Jul 2020 China's e-commerce darling has swapped its founder CEO for the other co-founder. The pair wields supervoting stock and controls the board. The $100 bln company doesn’t even have a CFO or other top executives. They need to upgrade management, but this is an odd way to start.
Ping An untangles one knot in its leadership 2 Jul 2020 Ma Mingzhe is giving up his CEO role and will remain chairman of the $187 bln insurer. The split is welcome but quirky governance endures with three other co-CEOs. Multiple bosses can be effective when responsibilities are clearly divided. Ping An mostly ticks that box.
IPO pricing gets back to business-as-unusual 1 Jul 2020 Dun & Bradstreet shares leapt 18% on their debut, even after its underwriters raised the price range – as they also did with insurer Lemonade, which starts trading on Thursday. Last week Albertsons aimed too high in its debut. Which strategy is better depends who is asking.
Fast food franchise model has burnt edges 1 Jul 2020 NPC International, the U.S.’s largest Pizza Hut franchisee, filed for bankruptcy. An LBO flip, heated competition, and higher labor costs left it larded with debt. Parent company Yum appears resilient. But its restructuring portends sizzling problems in the franchise model.
Tesla market milestone puts Musk pay in overdrive 1 Jul 2020 The Silicon Valley upstart has overtaken Toyota to become the world’s largest carmaker by market worth. Its rapid ride to a $210 bln value also starts the clock on another huge payout for CEO Elon Musk. But production and income show investors have gotten ahead of themselves.
Competing interests blur M&A regulation 1 Jul 2020 The U.S. government wants to curb a big jump in Chapter 11 filings in May. Dealmaking would help on that front. But agencies are also issuing antitrust guidelines that may make tie-ups harder. Jobs are at stake either way. It’s a trade-off between bailouts and consumer harm.
Hadas: Wirecard woes show need for fraud-busters 1 Jul 2020 Accountants EY may have been particularly inept in missing fraudulent bank balances at the German payments processor, but auditors are normally right to presume companies are fairly honest. Sniffing out cheating is a job for separate, licensed and powerful forensic specialists.
Corona Capital: Drug hoarding, Vacation-free world 1 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Stockpiling of Covid-19 treatment remdesivir may come back to haunt the Trump administration, while a forecast of $3.3 trillion in lost tourism is more than an inconvenience for some national economies.
Wirecard UK saga exposes payments regulation holes 1 Jul 2020 Clients of the collapsed group’s British arm had their accounts frozen while the watchdog tried to pin down its cash balances. That hurt blameless retail customers. Supervisors urgently need a way to monitor payments firms more closely before they get into trouble.
Italian $4 bln bank deal may suit government most 1 Jul 2020 Banca Monte dei Paschi di Siena could merge with rival BPM, Reuters reported, helping the state shed its 68% stake. A likely selldown would weigh on the enlarged group’s shares, as would MPS’ high costs and bad debt. The problem for BPM is that it's running out of alternatives.
Citi snatches Wells Fargo’s banking bronze medal 1 Jul 2020 At $106 bln Mike Corbat’s lender is worth more than Charlie Scharf’s for the first time since the financial crisis, making it the third biggest U.S. bank. Citi may not reclaim its pre-2007 top spot, but Corbat’s overhaul is bearing fruit. Scharf, meanwhile, has his work cut out.
Activists are ready to play, but lack playbook 30 Jun 2020 JPMorgan reckons market conditions have been ripe for pushy investors to set their sights on new target companies. The pandemic fallout could force lots of changes and deals. Yet traditional activist ideas and a near-exclusive focus on shareholder value may not cut it.
Casino deal epitomizes the house edge 30 Jun 2020 Houston billionaire Tilman Fertitta is using his blank-check company to buy his online-gaming business from his restaurants-to-river cruises outfit. The deal’s cheap compared to virus-inflated rival DraftKings’ valuation. But Fertitta’s inside knowledge gives him a winning hand.