Norway shines awkward light on Big Oil dividends 23 Apr 2020 Oslo’s state-owned $42 bln Equinor is slashing its first-quarter payout by 67% after oil prices turned negative this week. Bigger peers like Royal Dutch Shell really won’t want to follow suit and have some leeway not to. But a live example of caution makes it harder to hold firm.
Birkin bags are Covid-19’s most resistant nemesis 23 Apr 2020 The pandemic appears to have hit $77 bln Hermes less than luxury peers Kering and LVMH. A Chinese sales rebound suggests refined appetites of its rich clientele remain undiminished. Investors are right in betting the French group will outpace rivals in riding out of the crisis.
Private banks’ loan push will survive virus scare 23 Apr 2020 Plunging markets triggered margin calls on lending to rich clients. Yet Credit Suisse’s modest first-quarter provisions on such loans show big wealth managers can manage the pain. The promise of quick credit should ensure billionaires like SoftBank’s Masayoshi Son keep borrowing.
China’s Didi looks short on engine power 23 Apr 2020 The ride-hailing giant unveiled a three-year plan. Hard-to-compare targets and more of the same bets hardly inspire, especially as tech peers Alibaba and Meituan grab Covid-19 opportunities in health and more. Didi’s $53 bln valuation is vulnerable without a stronger drive.
Uber’s next pick-up: about $4 billion 22 Apr 2020 The ride-sharing firm ended 2019 with $10.8 bln of cash, and the hit to its main business from Covid-19 means that is already depleting. Faced with the prospect of having only a tiny cushion in 2021, now would be a good time for CEO Dara Khosrowshahi to fill the tank.
Corona Capital: Extended Stay, Victoria’s Secret 22 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.
UniCredit offers banks some hope on bad debt 22 Apr 2020 Italy’s top lender expects the pandemic to hike provisions for dud credit to up to 1.2% of loans in 2020. The spike is chunky, but joint central bank and government action mean it’s lower than past crisis peaks. An expected fallback to pre-Covid-19 levels next year is reassuring.
Bolloré offers Lagardere costly activist defence 22 Apr 2020 Vivendi, controlled by corporate raider Vincent Bolloré, has taken an 11% stake in the besieged French media company. That may help boss Arnaud Lagardere fend off hedge fund Amber Capital. The reward could be the chance to snap up the group’s prize publishing arm for himself.
It’s easy to like Facebook friending Reliance 22 Apr 2020 The social networking giant is paying $5.7 bln to buy 10% of the conglomerate’s Jio digital services division. WhatsApp will be able to power the retail ambitions of India’s richest man, and even potentially help build a super-app. This rare minority stake is a major step.
ValueAct nudges Nintendo to ditch the joystick 22 Apr 2020 The U.S. investor disclosed a $1 bln stake in the maker of Super Mario. Unlike the typical activist target, Nintendo is well run and outperforms rivals. But its focus on consoles looks short-sighted. As it did with Microsoft, ValueAct can push Nintendo in the right direction.
Hadas: Cheap data at last gets its due 22 Apr 2020 Faster and inexpensive connections are being appreciated now more than ever, but U.S. government inflation measures miss most of the gains. A fairer count would push up historical GDP growth, new research shows. The pandemic suggests even the revised figure lowballs the value.
Netflix locks down first-mover advantage 21 Apr 2020 Stay-at-home edicts helped the $190 bln streaming service best subscriber estimates last quarter. Reed Hastings’ firm lacks Disney’s live-sports and advertising woes, and can weather the new-content pause better than latecomers AT&T and Apple. Netflix is now even harder to beat.
Philip Morris shows going upmarket has a downside 21 Apr 2020 The Marlboro maker says its profit may be hit because travelers aren’t buying pricier brands in duty-free shops. That jars with the idea that peddling nicotine is recession-proof. As customers quit or die, tobacco companies rely more on trading up. That leaves them exposed.
Branson’s asset-light touch leaves Virgin exposed 21 Apr 2020 Despite his reputed billions, the bearded businessman is struggling for cash to save Virgin Atlantic. Like the ailing airline, Branson owns little: His assets include a Caribbean island and stakes in ventures like space tourism. The brand-centric business has found its limits.
Tech’s virus pain would have trustbusters Yelping 21 Apr 2020 The online-review site helped spur D.C. probes of ad giants like Google. Now it, Groupon and other mid-size Silicon Valley firms can’t get small-business aid, are laying off thousands and may not survive the crisis. That’d leave Big Tech’s worrying dominance more entrenched.
Corona Capital: HCA Healthcare, Kering 21 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: The virus helps one part of the U.S. healthcare industry, but harms another; and luxury group Kering's Chinese fortunes may depend on an end to Italy's lockdown.
UK’s inward M&A muddle comes home to roost 21 Apr 2020 China-backed buyout firm Canyon Bridge is trying to wrest control of Imagination Technologies, a British chip designer it acquired in 2017. The UK government lacks the grounds and the legislation to intervene. And its nuanced position on Huawei complicates a tougher approach.
Car industry’s growth engine is running on fumes 21 Apr 2020 The churn of new car lease sales has come to a grinding halt in March. It’s a double whammy for the likes of Ford and VW that are facing steep devaluations on cars that will be handed back by cash-strapped customers. A painful financial reckoning lies around the corner.
Virgin Australia could struggle to regain altitude 21 Apr 2020 The carrier has gone into administration with over $3 bln of debt after a bailout failed to materialise. Australia is loath to leave Qantas a monopoly, which should help spur a solution, maybe with local pension funds. Remaking Virgin into a success is a different story, though.
Spurned Caltex can do some refining on its own 21 Apr 2020 Canada’s Couche-Tard abandoned its $5.5 bln plan to buy and break up the petrol station operator because of the pandemic. The Australian company’s mooted property spinoff looks like a poor consolation prize. It would make more sense just to proceed with the suitor’s blueprint.