Capital Calls: Soy sauce activism 12 Oct 2022 Concise views on global finance: Foshan Haitian, China’s largest producer of cooking’s brown gold, loses $8 bln in value after consumers complain about ingredients.
China’s dreary Golden Week has shades of grey 10 Oct 2022 Domestic tourism sales during the country's top holiday fell to less than 50% of pre-pandemic levels. Cities like Shanghai might get a welcome boost from shoppers that stayed put, but the sector drives roughly 30% of consumption. That’s cold comfort for the weakening economy.
Capital Calls: Buffett’s Berkshire successor 4 Oct 2022 Concise views on global finance: The Omaha oracle owns $100 bln of stock in his conglomerate. His potential successor Greg Abel’s purchase of $68 mln of stock last week – after selling shares in a subsidiary for $870 mln in June – is too small a move toward Buffett’s standard.
Capital Calls: Google and gaming 30 Sep 2022 Concise views on global finance: The search giant is binning “cloud gaming” service Stadia three years after its launch.
Wall Street job cuts will be shallow and painful 29 Sep 2022 The slowdown in trading and dealmaking may suggest it’s time to swing the axe. But despite big firms’ headcount growing 10% since the pandemic, there’s surprisingly little fat to cut. Those on the front line will have to jostle with new recruits who don’t directly bring in bacon.
Cheerios can eat VCs for breakfast 28 Sep 2022 General Mills’s investment in food platform GrubMarket looks speculative. But manufacturers from United Airlines to General Motors have made similar bets. The cereal company doesn’t have to answer to capital providers like VCs do. With valuations falling, it’s not a bad idea.
Alan Jope exit is easiest step of Unilever revival 26 Sep 2022 Shares in the $111 bln Dove maker rose after it said its CEO would leave by end-2023. A botched bid for GSK’s personal health arm hit Jope’s credibility. But even with a new broom Unilever will struggle to pull off a big deal, and selling lower-growth units looks harder to do.
Capital Calls: Costco membership 23 Sep 2022 Concise views on global finance: The $216 bln retailer known for hooking shoppers with subscriptions has a high valuation for a business that, now, has many competitors.
ESPN would help Disney and Comcast settle a score 23 Sep 2022 Bob Chapek, who reigns at the Magic Kingdom, wants to buy the rest of Hulu sooner rather than later to beef up his streaming strategy. Brian Roberts, his counterpart and Disney nemesis, has less reason to sell quickly. A deal including the sports network could tempt him to talk.
Kohl’s investor tries to make old wardrobe work 22 Sep 2022 Investor Ancora wants the CEO and chairman gone after the $3 bln retailer’s stock price halved in a year. But the activist has been around since 2020, and board members it backed haven’t helped. A sale is needed, but if Ancora doesn’t step up its game, it is just a distraction.
Italy’s first female leader, Amazon’s monopoly 22 Sep 2022 Far-right leader Giorgia Meloni is favourite to become prime minister after Sunday’s election. In this Viewsroom podcast, Breakingviews columnists debate how she will handle Rome’s debt, which is expected to reach 148% of GDP. And: the online retail giant’s antitrust battle.
Eli Lilly obesity cure creates valuation problem 21 Sep 2022 The pharmaceutical firm's weight loss drug could rake in as much as $75 bln annually if everything goes perfectly. America’s thick waistline desperately needs help. But even with generous assumptions, the company is pushing valuation limits. Plus governments will limit success.
Ford’s supply wreck overshadows Detroit’s optimism 21 Sep 2022 The carmaker saw $7 bln wiped off its valuation after saying shortages would crimp results. Still, both it and General Motors have clung to upbeat full-year profit predictions. Add in spiraling costs and tightening credit, and their happy outlook is increasingly discordant.
Capital Calls: Stratospheric SPACs 16 Sep 2022 Concise views on global finance: A slew of space firms have gone public in deals with blank check firms, only quickly to fall back to Earth. Intuitive Machines has a better shot at staying aloft, thanks to government contracts.
FedEx packages economic pain with bad judgement 16 Sep 2022 A dire profit warning erased nearly a quarter of the company’s market value. The delivery titan sits at the nexus of many secular problems, including changing consumer patterns, inflation and logistical snarls. But UPS’s performance suggests such challenges can be handled better.
Server landlords have plenty more rents to extract 16 Sep 2022 Short-seller Jim Chanos says data centers are overvalued, but buyout shops keep chasing firms like London-based Global Switch with bids over 30 times EBITDA. Tech giants are a threat. But as long as demand outpaces supply and cheap financing is available, the party can roll on.
Starbucks’s high-octane plan has warm impact 14 Sep 2022 The $101 bln coffee firm spent a chunk of its investor day discussing solutions for its restless workforce. They are sure to give incoming CEO Laxman Narasimhan a challenge. But revenue is growing rapidly thanks to automation. Pretty soon, employees won’t have the same effect.
Peloton pack leader has clear road to accelerate 13 Sep 2022 Founder John Foley has exited the $3 bln exercise company, leaving an overhaul in the hands of CEO Barry McCarthy. The subscription business is showing sparks and Peloton is on the path to making cash – again. McCarthy may yet fail, but at least it will be on his terms.
Grocers’ crisis defences look shaky 13 Sep 2022 Morrisons lost its top-four UK position to Aldi, while Ocado’s online sales are under pressure. Competition from discounters means supermarkets have less scope to raise prices and protect margins than in past slowdowns. The bleak outlook has yet to reach stock valuations.
Capital Calls: T-Mobile US transmits clear signal 9 Sep 2022 Concise views on global finance: The telecom carrier is planning a $14 bln buyback program as it beats rivals in shareholder return.