Blackstone becomes Wall Street’s deals backstop 23 Apr 2020 Advisory boutiques like Evercore and Moelis are putting their faith in private-equity firms to end the virus-induced merger drought. With $150 bln to invest, Steve Schwarzman’s outfit is the biggest, and ready to pounce. The juicy fees from big buyouts are a way off yet, though.
EDF bailout would nuke Macron’s market ambitions 23 Apr 2020 Slumping power demand may force $23 bln EDF to seek fresh capital. The state utility might need at least $4 bln – but likely more. Having pledged to bail out carrier Air France, President Emmanuel Macron’s plan to back away from owning the means of production is fast unravelling.
Corona Capital: Merger bans, Moelis, Domino’s Pizza 23 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. politicians plan a curb on opportunistic M&A, advisory boutique Moelis cuts its dividend, and Domino's delivers.
Birkin bags are Covid-19’s most resistant nemesis 23 Apr 2020 The pandemic appears to have hit $77 bln Hermes less than luxury peers Kering and LVMH. A Chinese sales rebound suggests refined appetites of its rich clientele remain undiminished. Investors are right in betting the French group will outpace rivals in riding out of the crisis.
China’s Didi looks short on engine power 23 Apr 2020 The ride-hailing giant unveiled a three-year plan. Hard-to-compare targets and more of the same bets hardly inspire, especially as tech peers Alibaba and Meituan grab Covid-19 opportunities in health and more. Didi’s $53 bln valuation is vulnerable without a stronger drive.
Crisis paves way for South Korea’s New Deal 23 Apr 2020 President Moon Jae-in has long wanted to redirect the emphasis from exports to jobs and wages. As the pandemic’s economic toll mounts, his government has unveiled nearly $200 bln of relief measures. Fresh political support could help make the “income-led” growth plan a reality.
Uber’s next pick-up: about $4 billion 22 Apr 2020 The ride-sharing firm ended 2019 with $10.8 bln of cash, and the hit to its main business from Covid-19 means that is already depleting. Faced with the prospect of having only a tiny cushion in 2021, now would be a good time for CEO Dara Khosrowshahi to fill the tank.
Dollar-backed crypto shapes up as pandemic winner 22 Apr 2020 Cash is neither contactless nor clean, drawbacks that might have pushed money into big-name bitcoin. Instead, investors have focused on so-called stablecoins like Tether and USD Coin, linked to the U.S. currency. A revamped Libra even has a shot if Facebook gets out of the way.
Guest view: Push the economic pain up the chain 22 Apr 2020 The crisis created by Covid-19 will leave the most vulnerable facing the biggest burdens. Courts have tools that can help spread the pain more fairly. To preserve the basic economic relationships critical to recovery this should be a top priority, argues lawyer Jamie Gamble.
Earth Day’s 50th comes at just the right moment 22 Apr 2020 Half a century ago, Americans protested in droves for cleaner air and water. But progress has slowed, or been undone, while air pollution costs the global economy $3 trln a year. The pandemic has given a taste of a less smoggy world that could bolster efforts to cut emissions.
Corona Capital: Extended Stay, Victoria’s Secret 22 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.
UniCredit offers banks some hope on bad debt 22 Apr 2020 Italy’s top lender expects the pandemic to hike provisions for dud credit to up to 1.2% of loans in 2020. The spike is chunky, but joint central bank and government action mean it’s lower than past crisis peaks. An expected fallback to pre-Covid-19 levels next year is reassuring.
Guest view: Mutual debt is spectre haunting the EU 22 Apr 2020 European leaders meet on Thursday to discuss how to tackle the economic costs of the pandemic. Collective borrowing is the most contentious item on the agenda. Carlo Altomonte of Bocconi University and Fabrizio Pagani of Muzinich explain how a joint “recovery fund” might work.
Netflix locks down first-mover advantage 21 Apr 2020 Stay-at-home edicts helped the $190 bln streaming service best subscriber estimates last quarter. Reed Hastings’ firm lacks Disney’s live-sports and advertising woes, and can weather the new-content pause better than latecomers AT&T and Apple. Netflix is now even harder to beat.
SEC puts small plug in oil ETF loss gusher 21 Apr 2020 The U.S. agency has stopped USO, a popular exchange-traded fund used by investors to bet on oil, from creating new shares. Stemming the fund’s growth may help trading in a futures market wracked by negative prices. But it won’t stop its investors facing huge losses.
Philip Morris shows going upmarket has a downside 21 Apr 2020 The Marlboro maker says its profit may be hit because travelers aren’t buying pricier brands in duty-free shops. That jars with the idea that peddling nicotine is recession-proof. As customers quit or die, tobacco companies rely more on trading up. That leaves them exposed.
Branson’s asset-light touch leaves Virgin exposed 21 Apr 2020 Despite his reputed billions, the bearded businessman is struggling for cash to save Virgin Atlantic. Like the ailing airline, Branson owns little: His assets include a Caribbean island and stakes in ventures like space tourism. The brand-centric business has found its limits.
Tech’s virus pain would have trustbusters Yelping 21 Apr 2020 The online-review site helped spur D.C. probes of ad giants like Google. Now it, Groupon and other mid-size Silicon Valley firms can’t get small-business aid, are laying off thousands and may not survive the crisis. That’d leave Big Tech’s worrying dominance more entrenched.
Corona Capital: HCA Healthcare, Kering 21 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: The virus helps one part of the U.S. healthcare industry, but harms another; and luxury group Kering's Chinese fortunes may depend on an end to Italy's lockdown.
Oil’s big crash is more rational than it looks 20 Apr 2020 U.S. one-month crude futures went below zero for the first time ever on Monday. With the May contract about to expire, the slump is partly driven by technical factors. But the wider panic – that recent output cuts won’t stop storage being filled – couldn’t be any more real.