Meta’s EU subscription looks suspiciously pricey 3 Oct 2023 The Instagram owner may allow Europeans to pay $14 a month to avoid ads. It’s hard to see many users signing up, and the price is far higher than Meta’s regional revenue per user. Regulators and courts, which effectively pushed for this outcome, may get a phantom solution.
Uncle Sam risks recession by a thousand cuts 22 Sep 2023 A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.
Amazon-EU web content spat is all about grey areas 20 Jul 2023 The $1.4 trln e-commerce giant is fighting Brussels’ decision to class it as a large online platform and hence face extra scrutiny. Given its size, Amazon’s challenge at first looks like a long shot. Yet the legislation’s vague language creates scope for disputes.
Bain’s Chindata buyout saga verges on absurd 13 Jul 2023 The US investment firm last month offered $2.9 bln for the Chinese data centre operator it already controls after potential rival bids yielded nothing. Now a state-backed group has bested Bain’s offer by 15%, yet is being ignored. It’s an odd way to get the best deal all round.
Gregorian calendar, Fed target spoil inflation dip 12 Jul 2023 New data suggests the US is close to beating inflation. Yet June’s 3% rate was somewhat helped by a yearly comparison that will only get tougher. And with the Federal Reserve sticking closely to its 2% inflation goal, the finish line is probably much further out.
Big Tech backlash swells the AI gold rush 26 Jun 2023 Cloud provider Databricks is buying a machine learning startup for $1.3 bln, almost six times its valuation earlier this year. Models backed by Microsoft and Google dominate artificial intelligence. But a bet that companies want to control their data is pumping up smaller rivals.
Reddit’s golden geese foul up its IPO plans 16 Jun 2023 The social network differs from peers like Facebook in its reliance on moderators – effectively unpaid employees, many of whom are on strike. Until CEO Steve Huffman can align their interests with his future investors, it’s hard to see Reddit as ready for public-company life.
A $6 bln server deal is template for a mini-boom 1 Jun 2023 Buyers raced to pay sky-high prices for data centers feeding the cloud - until a market turn brought bankruptcies and tumbling shares. A bidding war involving Brookfield suggests the race is on again, as buyers try to exploit the last cycle’s exuberance and the next one’s hype.
Capital Calls: Lucky LBOs, Byron Trott 12 Dec 2022 Concise views on global finance: Coupa Software, a business that tracks expenses has a message for investors weighing its sale to Thoma Bravo: it is doing terribly. Byron Trott’s BDT is taking grill-maker Weber private again for $3.7 bln, a discount to last year’s IPO valuation.
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.
Alibaba suffers under someone else’s cloud 15 Jul 2022 Investors erased $14 bln of the company’s value on news that authorities summoned executives after a breach of a police database it hosts. The hack of 1 bln Chinese citizens’ details seems mostly an embarrassing government cybersecurity flop. But Alibaba is an easy proxy target.
China data centres get handy M&A jolt from Beijing 26 Apr 2022 U.S.-listed Vnet and Chindata’s beaten-up valuations are already seeding takeover interest. The deals look opportunistic but a new government-led digital infrastructure push is a game-changer. That should allow rainmaking rivals to benefit even more from consolidation.
Capital Calls: Snowflake’s no snowflake 3 Mar 2022 Concise views on global finance: The data warehouse firm doubled revenue, but the stock was whacked. Snowflake’s solid finances mean missteps are valuation conundrums, not existential threats.
Africa’s lofty data-centre prices have solid roots 4 Jan 2022 After deals in Nigeria and Kenya, $50 bln U.S. operator Digital Realty is buying most of South African rival Teraco. The $3.5 bln price tag is eye-catching given the risky location. But the continent’s growing population and rising data demand make the long-term numbers add up.
Capital Calls: China’s data centre sale 24 Nov 2021 Concise views on global finance: Global Switch is attracting big-name private equity interest, but its quirky setup might justify suitors asking for a discount.
Data-center valuations enter the metaverse 15 Nov 2021 CyrusOne has struck a deal with buyout firm KKR for a rich $15 bln, while peer CoreSite is selling itself to American Tower for $10 bln. Both deals show from different angles how financial and industrial buyers are banking on the arrival of Silicon Valley’s new virtual reality.
AT&T deal is a drama in search of a plot 16 Nov 2021 The $177 bln telecom giant hasn’t detailed the structure of the deal with Discovery it announced in May. It hasn’t articulated an operational strategy either, and its pay-TV unit HBO looks like it’s in a sweet spot. AT&T is committed to a deal – but maybe it shouldn’t be.
Capital Calls: Philips, Chinese overseas IPOs 15 Nov 2021 Concise views on global finance: The Dutch electronics firm’s shares drop 11% as it faces new questions over a recall of faulty ventilators; the country’s cyberspace regulator makes clear that sensitive data questions for initial public offerings apply to Hong Kong too.
Facebook rebrand more Altria than Alphabet 28 Oct 2021 The tech giant will call itself Meta, to reflect Mark Zuckerberg’s focus on creating a “metaverse” blending immersive virtual experiences with reality. Delivering the many technologies needed may take decades. For today, the rebrand just applies gauze to a tarnished name.
Google antitrust boogeyman is lurking in the wings 26 Oct 2021 Parent Alphabet’s quarterly revenue rose 41% and its stock has outperformed rivals. U.S. political anger is fixated on Facebook, but the search engine is more exposed in regulatory probes. A lawsuit revealing evidence of anti-competitive behavior is a reminder of the threat.