M&A bankers should consider going back to college 8 May 2020 Not for the frat parties. Even before the pandemic, demographics were working against the economics of higher education. Crunched finances make it worse, and online learning has exposed absurd tuition costs. Colleges seeking size, scale and stability will need strategic advice.
Uber, Lyft need more than cuts to fill profit tank 7 May 2020 The U.S. ride-hailing firms are slashing staff amid a drop in their core business. Uber is in better shape with more revenue streams like food delivery. But lowering expenses only goes so far. Reductions can also hurt their long-term future if autonomous-vehicle investments fall.
Elliott’s utility rescue flips a familiar switch 7 May 2020 Paul Singer’s hedge fund is part of a group investing $1.4 billion in struggling Texas-based CenterPoint. It has had a tough few months, on top of the challenges that power companies in general face. And Elliott has experience: A similar deal with FirstEnergy in 2018 paid off.
Viewsroom: Mega-mega mergers 7 May 2020 The Great Lockdown will inevitably encourage governments to foster the creation of ever-larger “national champions” through corporate consolidation. Rob Cox, Edward Chancellor and Lauren Silva Laughlin discuss possible combos – and why this would be a bad outcome for capitalism.
Cable networks risk post-virus vicious cycle 7 May 2020 Live sports are a big reason Americans tolerate pricey pay-TV packages. The lack of games is an excuse to cut the cord. Yet the NFL and others will want more for broadcast rights to make up for empty seats. That could push cable bills higher, and more subscribers toward the exit.
Argentina’s whiz kid may flunk restructuring test 7 May 2020 Martin Guzman, the 37-year-old economy minister, is trying to get a deal with holders of over $65 bln of debt using academic theories about what's sustainable. He makes valid points but the clock is ticking before default. Pragmatism is needed – otherwise it may tick for him too.
Corona Capital: Payments M&A brawl, Endeavor 7 May 2020 Concise views on the pandemic’s corporate and financial fallout: Payments firm Wex’s attempt to ditch a double deal for two UK rivals will face legal pushback and perhaps Elliott Management’s ire. Talent agency Endeavor’s 2018 Epic Games investment is starting to come in handy.
Supply chains’ tectonic shift will get viral jolt 7 May 2020 Tariffs, automation and climate change had businesses rethinking how best to secure their goods even before Covid-19. The pandemic has highlighted global supply chains’ vulnerability to lockdowns. Countries and companies alike will increasingly set their sights nearer home.
SPACs need a governance overhaul 6 May 2020 With IPOs struggling and mergers effectively halted, pools of cash sitting in listed acquisition vehicles are a chance for dealmaking. But the fees and valuation methodology of these so-called SPACs favor their managers. They will be unloved in the deal world until that changes.
Critical workers hold keys to higher minimum pay 6 May 2020 U.S. ambulance drivers make under $15 per hour, EMTs under $20. And “essential” retail staff make about $13. These and others indispensable in a lockdown and at risk on the Covid-19 front line are under-rewarded. Any post-virus rethink of supply chains must also include wages.
Carmakers put V-shaped recovery hopes to the test 6 May 2020 GM, Fiat Chrysler and Ford hope to restart U.S. production soon. Analysts expect new-car sales to return quickly. But the poor financial health of customers and industries like construction and energy will sap demand. That could turn a V into a U.
Will casual sex get shafted by the pandemic? 6 May 2020 That’s what dating apps like Tinder, Match and Bumble are trying to answer. Diseases like AIDS changed intimacy patterns before. Covid-19 will make it harder for lovers to swipe right with peace of mind. But more engagement, if fewer hookups, may benefit the matchmaker model.
New normal will demand new gold-standard portfolio 6 May 2020 Parking 60% in equities and 40% in fixed income is the traditional balanced approach. That’s off kilter if bonds are going to offer less and less income and are sometimes almost as volatile as shares. The solution may be to hold more stocks and cash, and possibly gold, too.
Corona Capital: Beyond Meat, Facebook, Natixis 6 May 2020 Concise views on the pandemic’s corporate and financial fallout: Beyond Meat’s stock burn, Facebook installs an oversight board, Natixis’s bad news-good news situation.
UniCredit gets little reward for virus caution 6 May 2020 Covid-19 provisions and restructuring costs risk erasing the $16 bln Italian bank’s profit this year. CEO Jean Pierre Mustier is being more prudent than his peers, but that is not reflected in a lowly stock price. At least investors stand to gain more when the recovery comes.
Oil car crash highlights Aramco investors’ airbag 6 May 2020 The Saudi crude giant’s shares have fallen less than those of western peers. Shareholders’ scope to avoid the dividend cuts now hitting oil majors is one reason why. It helps that Riyadh may be able to borrow its way out of the crisis rather than have to drain its cash cow.
Hong Kong’s jobless rate understates harsh reality 6 May 2020 The 4.2% figure is implausibly low given the protests and the pandemic. With U.S. unemployment expected to reach 20%, the Asian financial hub’s distorting omissions of many classes of workers are left exposed. Restaurant receipts and retail sales hint at the true economic damage.
Disney’s advantages over Netflix are now flaws 5 May 2020 The Magic Kingdom’s theme parks and movies once seemed safer bets than high-cost, high-growth video streaming. Lockdown and a possibly protracted period of social distancing have changed that. Netflix will be stronger by the time Disney regains its former glory.
Trucks inch towards electric-vehicle critical mass 5 May 2020 Automakers have invested heavily in electric cars. But selling enough to justify needed infrastructure remains a chicken-and-egg problem. Putting batteries into the haulage fleets of Amazon, UPS and others could vault to a solution. A new report shows how utilities can help, too.
Biotech M&A deal looks too rich for its blood 5 May 2020 Alexion agreed to pay $1.4 bln for smaller rival Portola and its potentially promising drug to reverse anticoagulants. The target has been on a downward slide for years – but is still bagging a 132% premium. That’s baking in success, but it’s more likely Alexion is overpaying.