Virus sets off China Inc’s biggest clash 14 Apr 2020 Alibaba, Tencent and Ping An dominate e-commerce, video games, and insurance, respectively. Now the trio, worth a combined $1 trln, is converging on the healthcare system, which is due an urgent upgrade. Financial and regulatory risks abound, but patients will be better off.
ValueAct slides an atypically ajar shōji 14 Apr 2020 After a victory at Olympus, the U.S. investor is trying to push open the latticed door at $4 bln JSR. Unusually for a Japanese company, the synthetic rubber and chemicals maker has a foreign CEO and regularly pays out cash. That means it could be receptive to an outsider’s ideas.
Masayoshi Son’s credibility wears even thinner 13 Apr 2020 SoftBank will report its first annual loss in 15 years thanks mainly to more losses on bets in its $100 bln Saudi-backed tech fund. The write-downs are neither out of line with markets nor fatal to Son’s vision. But along with other events they should shake even adherents’ faith.
Earnings forecasts are rosy and reliably wrong 13 Apr 2020 Analysts expect earnings to fall 10.2% in this quarter and twice as much in the next, but recover briskly. That would be a vote of confidence, if it weren’t for the fact that analysts habitually start way off, and slowly gravitate to too-modest figures that companies easily beat.
Bailouts put Wall St between a rock and hard place 13 Apr 2020 Banks are under pressure to quickly provide loans to keep businesses afloat. It makes fraud checks trickier, exposing them to liability. The Fed can share responsibility by providing a due diligence guide. Then banks have something to point to when inevitable failings happen.
Live Nation hoards cash to avoid scary showstopper 13 Apr 2020 The concert promoter behind Lollapalooza has lost about 40% of its value since the end of February. Slashing costs and reworking its credit will help as the world hunkers down. But until a there is public confidence of attending events, Live Nation will be suspended in limbo.
Blackstone has remedy for drug R&D cash burn 13 Apr 2020 The private-equity firm is sinking $2 bln into Alnylam, including buying rights to future revenue from a drug still under regulatory review. It's a way to match Blackstone's bulging wallet with the biotech’s hefty costs while limiting exposure to volatile equity markets.
Banks lay out an earnings-season assault course 9 Apr 2020 Until recently, quarterly earnings were fairly predictable, aside from minor drama around trading revenue. Covid-19 has turned that on its head. JPMorgan already gave a teaser on how to asses pandemic risks, but Breakingviews walks through some of the big things to look out for.
Poison pills don’t always taste so bitter 9 Apr 2020 Boards sometimes use these defenses to deflect activists or unwanted bidders. Restaurant chain Dave & Buster’s may have found a less suspect use. Its pill could help it get raider KKR to buy shares directly rather than in the market – and put cash into the company in the process.
Morgan Stanley gives Covid-19 a materiality test 9 Apr 2020 Boss James Gorman has recovered from the virus investors didn’t know he had. Companies have huge leeway when it comes to disclosing the boss’s ill health; Warren Buffett and Steve Jobs show extremes. Privacy is important, but there are advantages to radical transparency.
Viewsroom: Vices and more 9 Apr 2020 Breakingviews columnists in Ireland, New York and Lantau check in with Editor Rob Cox to discuss Jamie Dimon’s annual letter and coming earnings onslaught, fraud at Luckin Coffee and, everybody’s favorite coronavirus obsession: a boom in sales of porn, weed, booze and junk food.
CEO pay sacrifices could use a pinch of altruism 9 Apr 2020 Disney, HSBC and Solvay are just a few big companies where bosses are volunteering pay. Solidarity with staff, prudence ahead of government bailouts and dwindling cash are the key motivators. Real generosity will need to come from those that are thriving amid the crisis.
Saudis’ Warren Buffett impression looks skin-deep 9 Apr 2020 The kingdom’s wealth fund looks to be ditching diversification by snapping up stakes in big European oil groups. Unless MbS knows something that others don’t, buying stock on the open market is riskier than a classic Sage of Omaha swoop. Oil groups may also be cheap for a reason.
UBS sets high-water mark for 2020 bank earnings 9 Apr 2020 Outgoing CEO Sergio Ermotti unveiled a one-third jump in first-quarter profit. Market volatility has boosted trading income, while wealth clients shifted more money around. Yet both are temporary. With more pain to come, it makes sense to bow to regulators by trimming dividends.
Corona Capital: Expressive earnings 9 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: The U.S securities regulator encourages companies to ditch the boilerplates, ahead of what’s likely to be an unusual earnings season.
Treasury Wine’s posh-plonk split calls for a toast 9 Apr 2020 The $5 bln Australian winemaker could spin off its prized Penfolds business. That should deliver a higher valuation for the upmarket label and separate it from a ragbag of other brands that need restructuring. A coronavirus-induced glut of luxury grapes will eventually help, too.
Climate fight at Mizuho previews wider clash 9 Apr 2020 An investor group is urging the $29 bln finance giant to reduce lending for coal. With Japan in a state of coronavirus emergency, it’s an odd time to pick this battle, nor is Mizuho in charge of national energy policy – the real problem. But activists have to start somewhere.
For staff, Jeff Bezos is more CEO than trailblazer 8 Apr 2020 The Amazon founder has transformed shopping. But the way the $950 bln firm treats its workers is not so futuristic. Like Walmart, it only recently provided protective gear to warehouse employees. That might fit with short-term profit, but not with long-term innovation.
Best thing about new AT&T is old AT&T 8 Apr 2020 The U.S. telco enters a downturn with huge debts. That’s not in itself a danger, but it leaves less room to invest in the movies, advertising and cable networks boss Randall Stephenson fought hard to acquire. Fortunately, telecoms now look relatively more appealing anyway.
Icahn’s Volkswagen-Navistar deal is DOA 8 Apr 2020 The activist was finally set to make a fat return on the U.S. truck maker thanks to the German carmaker’s $2.9 bln offer. But the deal was never signed, and the target’s shares have halved. Given CEO Herbert Diess may have to take state aid, another Icahn bet may bite the dust.