Twitter and Snap could be M&A birds of a feather 22 Jul 2022 Both social networks are luring new users, but each is too small to go to the mat with Alphabet or Meta over advertisers, who will get more discerning as the economy slows. With both companies similarly valued, a merger has merit – if Twitter can tie up loose ends with Elon Musk.
Fintech crash is an M&A opportunity for bold banks 21 Jul 2022 Financial technology groups like $8 bln Affirm, Klarna and Robinhood have plunged in value. Heavy losses and obstinate founders make them tough takeover targets. But lenders like Goldman Sachs could in theory run them more profitably – and boost their own growth in the process.
Netflix only partly dressed for ad auditions 19 Jul 2022 The $90 bln streaming service’s subscribers grew faster than expected, boosting revenue and sending shares up 7% after Tuesday’s close. But cash flow is still under pressure. As the ads business kicks in, Netflix can’t rely just on lazy users. Eyeballs on content matter more.
GE’s new branding is appropriately pedestrian 18 Jul 2022 It took six months and thousands of conversations to name the $69 bln firm’s post-split divisions: GE Healthcare, GE Aerospace, and – the creative bit – GE Vernova. The separation is an effort to help shareholder value. With those names, GE is setting expectations low.
Goldman Sachs revamp gets a pre-recession shove 18 Jul 2022 Earnings halved in the second quarter as deals dried up. Sprightly trading made up for it, but that won't last. Beneath the noise, Goldman's pivot to being a fee-and-interest machine is accelerating. That's good for its valuation - and for closing the gap with Morgan Stanley.
GSK spinoff boost may be as good as it gets 18 Jul 2022 The drugmaker’s Haleon consumer unit started trading at 40 bln pounds including debt – below the 50 bln pound offer it rejected from Unilever. The Sensodyne maker has hefty borrowings and two big investors eager to sell. But its valuation mostly prices in a healthier future.
GSK split gives CEO fresh M&A test 15 Jul 2022 Emma Walmsley is hiving off the $102 bln drugmaker’s consumer unit. What’s left is currently valued at a discount to pharma peers, despite fast-growing vaccines sales, due to loss of exclusivity on key drugs. Walmsley needs to show she can buy businesses as well as break them up.
New York City is losing its real estate swagger 14 Jul 2022 Global investors are eyeing alternative destinations, like Atlanta. Meanwhile high mortgage rates and market jitters are chilling Manhattan’s residential sales. The Big Apple relies on property for half of its taxes, and its economy is slowing to a crawl. A downturn could smart.
Comatose watchdogs evoke Great Recession flashback 14 Jul 2022 Crypto lender Celsius slipped through regulatory cracks at the state and federal level. Failures in isolation aren’t big enough to be systemic. But SPACs, too, are crumbling, and people are getting hurt. As sirens wail, like 15 years ago, financial police sleep through it.
FOMO will be private equity’s saving grace 13 Jul 2022 The appetite to commit to new buyout funds is waning as declining public market valuations make pensioners and others overweight in private holdings. Spiraling requests from the likes of KKR may make investors want to retrench. But post-crisis bargains are too good to pass up.
Capital Calls: Delta’s earnings are bad and worse 13 Jul 2022 Concise views on global finance: Shares in the company fell 7% after the company missed earnings expectations. That’s bad, but worse is that its main strength – pricing power – has limits.
China’s “new retail” hype meets old retail reality 13 Jul 2022 Alibaba’s high-tech Freshippo grocery chain lowered its targeted valuation by 40% as investors shy away from trendy online-to-offline retail plays. Shares in traditional supermarket chains are outperforming as e-commerce brands tank. It’s a lesson in the limits of disruption.
Wall Street hates to love watchdog Rohit Chopra 12 Jul 2022 The head of the U.S. consumer finance agency has an expansive view of his role, to the chagrin of lenders he regulates. But banks are going overboard in attacks on the CFPB’s bid to reduce discrimination and vet mergers. Chopra may be their best bet for reining in fintech rivals.
Health adds new letter to ESG for food groups 12 Jul 2022 Government crackdowns on junk food marketing will hurt sales for companies like Frosties maker Kellogg. And investors are increasingly pushing consumer groups to use independent criteria to show how healthy their grub is. Tougher scrutiny will mean a valuation slap for laggards.
Capital Calls: PC meltdown, Software short-seller 12 Jul 2022 Concise views on global finance: Shipments of personal computers suffered the biggest decline in years, yet still exceed pre-pandemic levels; SoftBank-backed communication software group Sinch has lost over a third of its value after a short-seller attacked its accounting.
Capital Calls: Klarna’s slashed valuation 11 Jul 2022 Concise views on global finance: The Swedish fintech group’s valuation is down 85% in just over a year to $6.7 bln.
Facebook loses its FAANG chompers 8 Jul 2022 Meta’s Mark Zuckerberg is prepping for a downturn not seen since its early days as a public company. That’s as Google, Amazon, Apple and Netflix are chasing advertising, its main business. If Facebook’s share of the ad pie slips by a hair, Meta’s stock could be worth 25% less.
Kraft Heinz grocer war, China’s creaking economy 7 Jul 2022 Tesco has pulled products made by the $47 bln baked bean producer over price rises. In this Viewsroom podcast, Breakingviews columnists debate how this loss of variety could open the door for rivals to expand. Also, the People’s Republic’s means of hitting economic goals.
Reliance dresses Gap in more optimistic India garb 7 Jul 2022 A franchise deal with the underperforming U.S apparel outfit is boss Mukesh Ambani’s latest bid to expand his shopping empire. It’s a low-margin business: Gap lost money for an earlier partner. India’s retail king has the scale and supply chains to stitch together better returns.
Amazon and Grubhub cook up low cash diet plan 6 Jul 2022 The food delivery firm has agreed to pay Amazon in warrants in return for the e-commerce giant serving up new customers. Paying a supplier in stock – as tech firms do their staff – makes sense when cash is tight. Amazon is the perfect chef to stir that pot.