Corona Capital: U.S.-China fight, Canada downgrade 25 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Washington deploys sanctions over Hong Kong, adding to trade and Covid-19 tensions; and a double whammy of the coronavirus and low oil prices costs Canada one of its AAA ratings.
EasyJet sees glimpse of blue sky above virus cloud 25 Jun 2020 The UK budget airline raised 419 mln pounds from investors. With European economies reopening and the few planes back in the sky full of passengers, CEO Johan Lundgren’s route out of the gloom is clearer. Shares up 50% from their virus low make this a good time to refuel.
Bayer pays dearly for blind faith in science 24 Jun 2020 The German group will spend up to $10.9 bln to settle U.S. claims its weedkiller causes cancer. Though Roundup remains legal, Bayer misread the danger of taking its chances with American juries. Shareholders will bear the toxic legacy of its ill-judged $66 bln Monsanto takeover.
Jeff Ubben gives Wall Street its Fukuyama moment 24 Jun 2020 ValueAct’s founder declared “finance is, like, done” as he left to start an ESG fund. True, it’s harder for traditional activists to make money. But like the academic who claimed that history had ended, Ubben’s off the mark – as his new climate and social gig is likely to prove.
Winnebago’s spring surge may run out of gas 24 Jun 2020 The recreational-vehicle maker’s stock price has more than tripled from March lows as social distancing pushes stir-crazy Americans outdoors. But the company’s valuation is stuffed with expectations of hitting Mount Rainier-type heights. Investors might want to put on the brakes.
VMware spin would repair Dell’s complexity damage 24 Jun 2020 The $36 bln IT group may off-load its $50 bln majority stake in separately listed VMware. Logic suggests first extracting cash to reduce debt and then spinning VMware off to Dell’s shareholders. That would clean up balance sheets and governance, probably boosting both valuations.
VW’s Europcar takeover would be a rough round trip 24 Jun 2020 The German carmaker is considering buying the $500 mln French car-rental firm, which it sold in 2006. Beleaguered boss Herbert Diess could use its airport and city locations to launch ride-sharing services. Plummeting rentals and high debt will make bumpy economic returns ahead.
Camera sale puts Olympus value into clearer view 24 Jun 2020 The $25 bln Japanese company is offloading its historic but unprofitable imaging division 18 months after pushy investor ValueAct prompted a shakeup. A new focus on medical equipment has helped send Olympus shares soaring. The question now is whether expectations are too rosy.
Corona Capital: A tax on martinis 24 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Uncle Sam has bad news for those enjoying the libation during lockdown as it’s putting up import duties on gin, vodka and olives.
Yandex picks good time to untangle from Sberbank 24 Jun 2020 The Russian search engine will pay $600 mln for the bank’s stake in their e-commerce tie-up and exit their payments unit. With shares up, funding this with $800 mln from investors like Roman Abramovich makes sense. Sadly, immunity from Kremlin meddling isn’t part of the deal.
Bill Ackman bests Goldman Sachs in SPAC race 23 Jun 2020 Both are launching blank-check companies designed to buy private firms. Goldman’s is smaller, and rides on its contacts and cachet. Ackman’s could reach $6 bln, and adds some governance-friendly tweaks. Short-term investors will probably prefer Goldman’s; Ackman may hope they do.
Cerberus bags more waiting for Albertsons checkout 23 Jun 2020 Stephen Feinberg’s buyout firm has tried several times to exit the U.S. grocer it has owned for 14 years. But the pandemic has been a boon for both supermarkets and capital markets. That means Cerberus can get a better deal than was on offer when it last tried to leave the store.
Amazon’s climate fund is a worthy sideshow 23 Jun 2020 The $1.3 trln e-commerce giant’s new $2 bln fund could invest in everything from energy storage to farms. Google’s green-energy experience shows even better focused bets often don’t pay off. Investing to deploy existing technology does. Jeff Bezos’ outfit will do that too.
The Exchange: Pehr Gyllenhammar 23 Jun 2020 Long-time Volvo CEO Pehr Gyllenhammar was pushing radical environmental and social changes at the carmaker long before they became fashionable. One of Sweden’s most admired businessmen argues why CEOs should be paid less and how it felt to become a father again at 81.
Lufthansa bailout rebel has jobs trump card 23 Jun 2020 Billionaire Heinz Hermann Thiele may nix the airline’s $10 bln rescue if Berlin doesn’t sweeten its terms. It looks rash: blocking the deal would crash the 79-year-old’s 16% stake. Yet insolvency could cost jobs and dent Germany’s reputation. The government may be first to fold.
Corona Capital: SpongeBob, Cirque du Soleil 23 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Cinema chains raring to reopen may find that movie studios have already made other plans. Meanwhile, Cirque du Soleil may get new financing, but with strings.
Chinese gay dating IPO makes rainbow connection 23 Jun 2020 BlueCity, valued at $300 mln in 2014, wants to go public in New York. Its Grindr-meets-Facebook app caters to low-key but thriving LGBTQ communities. Fast growth has enabled founder Ma Baoli to expand in Asia. Sustained success depends on shifting political and social attitudes.
Bad omens for U.S. mall owners come in threes 22 Jun 2020 Brookfield is pushing back on tenants and skipping mortgage payments. Simon Property is ditching its merger with a rival. Both mall owners are suing the Gap for rent and may team up to bid for bankrupt J.C. Penney. Taken together, it looks like landlords are in for a reckoning.
Wirecard’s bankers might as well keep it alive 22 Jun 2020 ABN Amro, Commerzbank and others could tip the payments group into insolvency by calling in 2 bln euros of loans. Given Wirecard’s lack of cash and tangible assets, they might not get their money back. Better to see if new CEO James Freis can salvage something from the wreckage.
New City watchdog head fits UK’s Brexit challenge 22 Jun 2020 The financial regulator’s next CEO will be Nikhil Rathi, an ex-Treasury official who runs London’s stock exchange. His background suggests PM Boris Johnson sees the need to help Britain’s hub after the EU exit. That may also make it harder to resist pressure for lower standards.