Asia chip windfall preludes tech’s next challenge 29 Jul 2020 Shares of TSMC and Samsung have leapt on hopes Intel may outsource production. It could enlarge the contract-chipmaking market they dominate by 20%. Still, the $209 bln Intel's woes highlight the high costs of making advanced semiconductors. Finding buyers may get harder.
Microsoft’s cloud mostly floats above Covid-19 22 Jul 2020 The $1.6 trln software giant’s latest quarter showed the pandemic's effects, good and bad. A sharp fall in advertising showed the company can’t entirely escape the real economy. But cloud services, on-demand software, and video gaming grew rapidly, thanks to more work from home.
Chip champ jumps into Shanghai-Hong Kong value gap 17 Jul 2020 Dual-listed SMIC's mainland shares debuted at four times the price of its Hong Kong equivalent. Other peers trade at similarly ridiculous premiums. Mainland traders still struggle with valuing companies, while Beijing’s incomplete reforms keep the markets out of sync.
Corona Capital: Expense accounts, Zoom’s new box 15 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Goldman Sachs’ earnings give an insight into pandemic-era client schmoozing, and virtual meeting facilitator Zoom tiptoes into the high-priced hardware market.
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.
IBM makes a virtue of facial-recognition necessity 9 Jun 2020 New CEO Arvind Krishna is ending the $117 bln firm’s attempts to develop the technology and questioning whether police should use it. Companies rarely abandon potential profit for PR wins, but it’s easier when operations are small, rivals pull ahead, and regulation threatens.
Complacency is as much a disruptor as antitrust 8 Jun 2020 Big Tech critics credit the 1969 push to break up IBM for spurring the today’s software industry. But it was as much Big Blue’s shortsightedness that led to others’ power. As probes of newer tech companies ramp up, Microsoft, with similar challenges, tells a more promising story.
China’s chip giant serves nationalism and reform 18 May 2020 The $13 bln SMIC received a $2 bln boost from state funds ahead of a debut on Shanghai’s new STAR board. The firepower reinforces Beijing’s push for tech self-sufficiency. SMIC’s Cayman Islands structure will also test new listing rules that overseas-listed peers could use.
Stars align for China tech’s stay-at-home project 28 Apr 2020 Controversial surveillance startup Megvii is mulling a local IPO, and exchanges are rolling out welcome mats. It’s good timing given the suspicion U.S.-listed Chinese firms are falling under. Backers face lockup periods and capital controls, but will get better valuations.
Intel’s inside today, may not be tomorrow 23 Apr 2020 The chipmaker’s first-quarter revenue rose 23%. It is benefiting from a pandemic-driven shift to online living, with more demand for servers and PCs. Yet tech firms such as Apple are using more internally-designed chips, which will bring Intel back down to earth.
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.
Samsung discovers perks of working from home 7 Apr 2020 A surge in remote working activity lifted demand for chips used in data centres. That helped first-quarter operating profit rise 3% from a year earlier and offset the pain of lower smartphone sales. The South Korean giant is benefiting from the all-pervasiveness of semiconductors.
Xerox-HP deal is dead for now 26 Mar 2020 The smaller printer maker's hostile $35 bln offer for its rival looks even more like a fool’s errand in today's market. It would pile on debt, and HP’s resistance suggests a friendly deal won't happen. As with other pending mergers, industrial logic will still exist in a year.
Market mess may save Xerox from itself 12 Mar 2020 The fallout from Covid-19 makes the printer maker’s hostile $35 bln bid for HP even edgier – and Xerox hasn’t raised all the cash yet. If it can do so, and if volatility continues, HP owners might bite. The problem for Xerox shareholders is that could mean too much risk for them.
Xerox drawn into duplicative Japanese fight 10 Mar 2020 After pushy investor Carl Icahn showed up, the U.S. printer maker rancorously rewrote a 57-year relationship with Japan’s Fujifilm. Xerox’s next move, a hostile $35 billion bid for HP, has now riled Canon, a 35-year HP partner. Aggressive tactics invite copycat responses.
HP’s fire-with-fire defense does it no favors 20 Feb 2020 The printer maker adopted a poison pill to stop bidder Xerox from digging in further. Aggressive bids justify robust responses. But HP would gain more credibility by laying out its valuation argument clearly for shareholders before putting up prohibitively defensive measures.
TSMC sits uncomfortably on U.S.-China tech fence 19 Feb 2020 The $280 bln Taiwanese company has benefitted from being everyone’s friendly chipmaker. Now the White House is mulling curbs targeting TSMC’s business with China’s Huawei. The financial hit looks manageable, but rising political pressure to pick sides will be a bigger threat.
Higher Xerox bid sharpens contrast for HP board 10 Feb 2020 Pushing up the offer to $35 billion removes a big excuse for its larger rival refusing to negotiate. Xerox is even closer to the debt-fueled limit of what it can afford. But the 9% bump makes the price more interesting for HP’s owners. The company's directors need to open up.
Will IBM be the next Microsoft or Nokia? 31 Jan 2020 Arvind Krishna is to succeed Virginia Rometty as CEO. Investors won’t miss her: Big Blue’s value almost halved on her watch. Attempts to make struggling tech firms shine again can fall flat, as Nokia can attest. But Microsoft’s rise under Satya Nadella may give Krishna hope.
Lenovo founder’s M&A manual is missing an update 19 Dec 2019 Liu Chuanzhi will retire as head of Legend Holdings, the $8 bln PC-maker’s parent. His 2005 purchase of an IBM unit was one of the best examples of a Chinese firm building a global brand through foreign deals. That playbook looks more like an exception to today’s hostile rule.