Corona Capital: Baseball and robo-taxis 4 May 2020 Concise views on the pandemic’s corporate and financial fallout. Taiwan hits on a way to please baseball fans, with the help of some people-shaped placards. Meanwhile, chipmaker Intel finds a deal amid a crisis.
Cable cowboy’s UK round-up puts Vodafone in corner 4 May 2020 U.S. billionaire John Malone is in talks to merge his Virgin Media broadband outfit with mobile operator O2. A joint venture could let Spain’s Telefonica, O2’s indebted parent, extract 4 bln pounds. Without a fixed-line partner in its home market, Vodafone faces a lonely future.
Offices will get roomier when the virus passes 4 May 2020 Conventional wisdom seems to be that after the pandemic commercial landlords will be crushed as staff stay home. But there’s a counterargument that cooped-up workers will crave interaction, employers will need to space them further apart and put an end to unhealthy hot-desking.
Mukesh Ambani gives Saudis a run for their money 4 May 2020 A $7 bln rights issue backstopped by the Reliance Industries boss will help keep his promise to cut debt. Although smaller than a delayed deal with Aramco, the discounted stock sale is a record for India. The symbolic significance should instil more confidence amid the pandemic.
Tech’s lucky few virtually detach from economy 1 May 2020 There’s no snazzy acronym to replace the FAANG stocks, but Amazon, Shopify, Netflix and Microsoft have seen their stocks blast off, while Facebook and Apple lag. While plenty of tech services can be consumed at home, a big differentiator is subscriptions and revenue certainty.
Restructuring gurus face embarrassment of riches 1 May 2020 While fees from advising on M&A are drying up, helping companies navigate cash crunches and bankruptcy will be a big pandemic money-spinner, probably larger than past crises. Experts like Lazard don’t break out how much they make from such activities. That’s probably wise.
U.S. oil giants play chicken with shareholders 1 May 2020 Shell cut its dividend on Thursday and took a realistic outlook towards the fossil fuel’s future. But U.S. drillers are forging ahead as if the commodity’s only challenge is price. Without a thoughtful 30-year plan, Exxon and Chevron can only hope to tread water, at best.
Corona Capital: Exxon, Clorox 1 May 2020 Concise views on the pandemic’s corporate and financial fallout: Exxon is getting clean by manufacturing much-needed medical-grade hand sanitizer while bleach maker Clorox will likely continue its winning streak.
Business interruption fight is black box of risk 1 May 2020 Giant companies and small businesses are demanding compensation for lockdown-related closures. Though some insurers excluded pandemics, others left grey areas. Legal and political fights cloud the vast liability. Uncertainty will be a drag on the industry – and on its customers.
Apple may bruise but it should still bounce back 30 Apr 2020 The 7% fall in iPhone sales over the last quarter was predictable, but also self-limiting. It’s partly offset by selling more services, which are now over 20% of revenue. And unlike some goods during Covid-19, demand for Apple products will be deferred rather than destroyed.
Jeff Bezos puts shareholders in the corner 30 Apr 2020 Amazon’s revenue jumped 26% in the first quarter. Conditions are just right: more online shopping and a growing pool of jobless people from which to hire. But shareholders will have to join the queue, thanks to a giveaway of some $4 bln to customers and staff. It's classic Bezos.
Chevron is M&A-ready. Exxon, not so much. 30 Apr 2020 The oil-price rout has left small and mid-tier U.S. drillers in pain and ripe for takeovers. Major players are hurting too, but Chevron, though not as big as Exxon, has been more prudent with cash and debt, and its stock has held up better. Occidental may even be in its sights.
Tesla’s Elon Musk turns from prey to predator 30 Apr 2020 The electric-car maker’s boss lashed out at state-imposed “fascist” lockdowns. Truth is, Tesla’s having a good crisis. Its $160 bln valuation bests all but Toyota. Rather than kvetching, Musk could use this firepower to seize the moment and expand global manufacturing capacity.
Phones will restore freedom at the cost of privacy 30 Apr 2020 Contact-tracing apps like Apple-Google’s will allow more public mobility but only if related testing is quick and easy, and everybody plays ball. That means democracies will wave sticks, disguised as carrots, to encourage use. Good results would outweigh the Orwellian overtones.
Corona Capital: Tepid earnings, red-hot bonds 30 Apr 2020 Concise views on the pandemic’s corporate and financial fallout. Halfway through earnings season, things are going from mediocre to bad at big U.S. companies. Meanwhile, Boeing’s $25 billion bond issue shows the Fed has cast a spell on the corporate debt market.
Shell’s dividend surrender is a necessary evil 30 Apr 2020 Given it hadn’t reduced shareholder payouts since WW2, the Anglo-Dutch major’s two-thirds cut hurts its pride. But amid an epic price crash boss Ben van Beurden couldn’t have kept Shell’s rating and paid to transition from oil. Stubbornly clinging on would have been even worse.
SocGen hits replay button on trading horror show 30 Apr 2020 The French bank plunged into the red due to $277 mln in losses on equity bets. That contrasts with investment banking peers who reported sharp rises in trading income. CEO Frederic Oudea’s pledge of more cost cuts does little to reassure there won’t be more goofs to come.
How Goldman Sachs walked into a pay trap 29 Apr 2020 CEO David Solomon’s $27.5 million package for last year is deservedly in the crosshairs at this week’s shareholder meeting. Goldman’s problem is the method rather than the magnitude, which isn’t out of whack with rivals. Still, it might want to borrow some of their good habits.
Facebook goes on viral offensive 29 Apr 2020 While Alphabet is cutting costs, Facebook will hire 10,000 people and just did its biggest deal since 2014 in India. Revenue growth fell to 18% last quarter, but the $550 bln social network is not slowing down. Mark Zuckerberg can afford to ignore any reluctant shareholders.
U.S. moviegoers will never again fill theaters 29 Apr 2020 Attendance was already declining, and Covid-19 has completely shut down the likes of AMC. Netflix is ascendant, and Comcast's Universal managed a successful release of "Trolls" without cinemas. Add wariness of social contact, and the industry's bleak future may already be here.