French foray into Italian mobile will be hard slog 6 Jul 2016 France’s Iliad will create a fourth mobile operator in Italy as part of Hutchison’s plan to merge its 3 Italia with Vimpelcom’s Wind. Iliad disrupted the French market when it burst on the scene in 2012 but Italian prices are already low. It may struggle to make the same splash.
UK upstart banks lack too-big-to-fail airbag 6 Jul 2016 Britain's challenger banks have grown thanks to their bigger peers' dire customer service. Most look well capitalised. But a Brexit-induced recession and commercial property downturn may expose shoddy underwriting. Their tiny size means regulators won't mind if they go under.
Tesla pressure clouds Elon Musk’s solar gambit 5 Jul 2016 The electric-car maker missed its delivery target again. That's bad news for a company aiming to quintuple production by 2018. A fatal crash also has invited scrutiny of Tesla's Autopilot feature. These concerns further undermine an already questionable effort to buy SolarCity.
Sainsbury’s finds super-cheap isn’t super-cheerful 4 Jul 2016 The UK grocer will close the Netto brand of low-cost supermarkets that was meant to challenge Lidl and Aldi. Budget food retail is set to grow 40 percent over the next five years. But the bigger retailers don't necessarily need to join the discounters to beat them.
Credit Suisse special pay looks less than special 4 Jul 2016 The Swiss bank last year trebled extra awards it makes to hire or retain star recruits. The boost partly fits the change in management and compensation philosophy under boss Tidjane Thiam. Still, too many were given too much at a time when industry profitability is wilting.
Stress-test failures a warning for European banks 29 Jun 2016 Deutsche and Santander again botched the Fed's exams. It's embarrassing, though more surprising for the German lender. The problem for Europe's financial giants is they have to set up U.S. holding companies by July 1 – bringing more of them into a process as alien as baseball.
GE’s 50 billion reasons not to be a SIFI 29 Jun 2016 That's the dollar amount of market cap the U.S. conglomerate has added since it said it would wind down the finance arm that watchdogs said posed a systemic financial risk. Relative to the market and rivals, the gain is bigger still. Complacent mega-bank shareholders, take note.
Adidas enlists House Kardashian in siege of Nike 29 Jun 2016 The German sportswear maker signed up hip-hop superstar Kanye West in a partnership just after Nike announced weak quarterly results. Adidas still lags its swoosh-logoed rival in market share and profitability. Adding Mr. Kim Kardashian to its ranks may help close the gap.
Dixons Carphone’s strong year offers weak comfort 29 Jun 2016 The British electrical goods and phone seller said like-for-like sales grew 5 percent last year. Its pro-Remain boss says leaving the EU may not be disastrous. The company does look strong relative to rivals like Darty, but the outlook for consumer spending is hugely uncertain.
Lending Club financial innovations skipped culture 28 Jun 2016 The cratered online loan marketplace says its founder and ex-CEO inflated loan volumes on top of other failings. Only 18 months after its IPO, the supposed disruptor is retrenching. To move fast and break things is risky in finance – especially so when mixed with self-dealing.
America’s top cops can still take a bite out of VW 28 Jun 2016 The German carmaker will pay a record $15 bln for its emissions scandal. It’s a lot of money but in line with regulatory tallies. But a criminal case is still pending that offers to test the Department of Justice’s pledge to better hold individuals liable for company misconduct.
SolarCity governance torched by bid mini-committee 28 Jun 2016 The clean-energy company could find only two directors independent enough to assess Tesla’s $2.8 bln takeover offer. And one of them is a venture capitalist whose firm has backed Elon Musk’s companies. This lack of proper board engineering shortchanges SolarCity shareholders.
After Dieselgate, VW faces new big bad 28 Jun 2016 A $15 bln settlement with U.S. regulators all but buries the German carmaker’s emissions fraud. Now for the next crisis: falling sales. Since Britain plunged Europe into uncertainty, markets have priced in a 13 pct drop in 2017 earnings. That calls for zealous cost-cutting.
“Frack Master” suit is a sign of bezzle shrinkage 27 Jun 2016 The U.S. SEC says Chris Faulkner inflated his shale-oil company’s prospects, then blew $80 mln of investors’ money on dodgy expenses. Hard times tend to reveal bad boom-era behavior. The oil patch’s lax governance makes it an obvious place for regulators to hunt for culprits.
UK profit pain to spread beyond airlines, housing 27 Jun 2016 Warnings by British Airways’ owner IAG, easyJet and Foxtons show the referendum shock is already hitting some sectors hard. Yet travel and housing are both leading indicators for the wider economy. Investors can brace for worse, and safe havens are in short supply.
Bank shares take a bit of a random Brexit walk 24 Jun 2016 Globally, they’re down about 8 pct. Local pain explains Lloyds and Bank of Ireland. Sovereign debt exposure is a problem for Intesa Sanpaolo and others. Santander has a Spanish election to worry about. The likes of BofA and SocGen, though, seem swept up in a sea of confusion.
UK stocks brace for self-inflicted recession 24 Jun 2016 Shares in banks and homebuilders fell sharply as investors reacted to Britain’s referendum vote. As leveraged bets on the domestic economy, the selloff reflects fears of a contraction. But at least lenders are now better equipped to deal with financial turmoil than a decade ago.
Twilio IPO gallop suggests unicorns can run free 23 Jun 2016 The U.S. software firm debuted even as Brexit, interest rates and other global concerns have stalled most new listings. A 75 pct pop in the shares gave the fast-growing but unprofitable enterprise with lousy governance a $2.2 bln value. Silicon Valley’s hold on investors endures.
Facebook’s indie owners send upside-down message 22 Jun 2016 Shareholders not named Mark Zuckerberg gave more likes than frowny faces to just three members of the board. Puzzlingly that included Gawker-hunter Peter Thiel and not key executives like COO Sheryl Sandberg. It’s a head-scratcher probably explained by investors ticking boxes.
VW’s poor governance back on the spot 22 Jun 2016 Germany’s financial watchdog wants a probe into whether the carmaker’s former management manipulated the market. The legal bar for a conviction is high. But it adds to the pressure on chairman and former finance chief Hans Dieter Poetsch. VW really needs an outsider at the top.