Reddit’s future looks bright through VR goggles 22 Feb 2024 The social media firm's IPO document shows narrowing losses and a fast-growing top line. But compared to competitors, a mooted $5 bln valuation should be a stretch. The upshot is founder Steve Huffman’s plan to sell data to train AI models. That has promise, in a virtual world.
Capital Calls: Oil M&A 22 Feb 2024 Concise views on global finance: The $11 billion Williston Basin combination of Chord Energy and Enerplus lacks the wow factor of Exxon’s and Chevron’s mega-mergers, but there are sufficient savings to suggest more deals will be on the way.
Universal Music’s John Legend deal is harmonious 21 Feb 2024 The music giant is purchasing a more than 25% stake in Chord for $240 mln, gaining some control over the music with a sliver of its own money at risk. Importantly, Universal is buying Chord from KKR. Swapping tunes between sophisticated buyers legitimizes the business.
Walmart buys TV portal to nowhere 20 Feb 2024 The $484 bln retailer is buying smart-TV maker Vizio for $2.3 bln. It’s a tiny gamble on the possibility the operating system eventually captures individual viewing habits and beefs up ad capabilities. But given Walmart’s M&A track record, chances are, it’s still a waste.
Capital One will struggle to cash in M&A rewards 20 Feb 2024 An $80 bln deal with Discover would create a credit-card giant with a Visa-like payment network and huge cost savings. These perks can only be redeemed by overcoming political foes, regulators and the target’s conduct issues. On balance, it’s wise to buy now, and maybe pay later.
JD is logical winner of odd UK retail bidding war 19 Feb 2024 The $37 bln Chinese e-tailer is mulling an offer for Britain’s Currys, also the subject of interest from Elliott Advisors. A feeding frenzy for a sub-$1 bln UK asset with an unproven turnaround story sounds weird. But JD.com’s need to expand overseas is a strong motivation.
Deal famine is driving private equity evolution 15 Feb 2024 M&A activity fell 30% in 2023 and this year is off to a relatively slow start. In this Viewsroom podcast, Breakingviews columnists discuss how a dearth of deals is spotlighting a shift of focus among traditional buyout houses like KKR and Carlyle into areas like private credit.
Japan’s overseas tech deal crosses financial wires 15 Feb 2024 Electronics design outfit Altium has a smart product and is growing at a decent pace. That doesn't justify Renesas paying $6 bln for the Australian-listed company. Unless the buyer can supercharge revenue, it's another Japanese outbound deal that will generate meagre returns.
Capital Calls: Lyft 14 Feb 2024 Concise views on global finance: The US ride-hailing firm mistakenly forecast 500 basis points of margin improvement for 2024, causing its stock to surge some 60% before it came back to earth.
Gaming suitors have a window in which to pounce 13 Feb 2024 After a ropey 2022, the $180 bln sector grew less than 1% last year. Former stars like Ubisoft have been cutting staff, and their shares now look cheap. That gives perennial suitors who think gaming can recover – like Netflix, Disney and Saudi Arabia – a chance to bulk up.
Shale twins’ $26 bln deal can afford to be pricey 12 Feb 2024 Permian producer Diamondback is buying a smaller version of itself in Endeavor, from overlapping acreage to neighboring offices. That implies the price is maybe $1 bln over the odds. Given unique savings the duo can reap in the heart of the US oil boom, the buyer can afford it.
PGA political golf drama is Saudi’s Trump card 12 Feb 2024 Senators accused former Citi banker Michael Klein and other consultants of siding with PIF over an agreement with the PGA and its investments in the US. While the golf tie-up remains in flux, political scrutiny is intensifying. A delay could work in the Saudis' favor.
Europe’s wilting bourses get fresh cause to unite 12 Feb 2024 The likely de-listings of Italy’s Saras and Tod’s add to a wider exodus from euro zone stock exchanges. Part of the problem is a lack of new European companies to replace them. But Europe could also help itself if its equity market rules and trading were less fragmented.
UK $13 bln cardboard saga has durable M&A endgame 9 Feb 2024 Three years after its last approach, $7.4 bln Mondi wants to merge with $5.4 bln DS Smith. Amid slowing consumer demand, there’s more strategic and financial logic in uniting the UK-listed packagers. That doesn’t mean there won’t be a squabble over how they’re scrunched together.
BHP and Rio take competition out of going green 9 Feb 2024 The giant miners are teaming up to try and decarbonise steel production. Cutting the 8% of global emissions the current process belches out is key to saving the planet. The collaboration can help Australia keep up too. It makes this unusual setting aside of rivalry doubly smart.
Capital Calls: Disney 7 Feb 2024 Concise views on global finance: Boss Bob Iger nabbed Taylor Swift’s movie for his company’s streaming service, took a $1.5 bln stake in Epic Games and shipped more money to shareholders. But traditional TV is declining, and a new sports partnership makes for an awkward fit.
Woodside torches Santos’ quick activist fix 7 Feb 2024 The oil and gas driller ended talks with its smaller rival about a $52 bln merger Down Under. A deal always looked hard. But it could have got investors off Santos CEO Kevin Gallagher’s back. Now he’ll have to try the slower route of capital returns, cost cuts and asset sales.
WeWork needs an Adam Neumann, not the Adam Neumann 6 Feb 2024 The founder of the office-sharing firm is trying to drum up support to buy his former firm out of bankruptcy. With momentum in its favor, WeWork, at the right value, has prospects, and an insider could be useful. But Neumann’s credibility is forever shot.
Why tech giants will rake in AI’s big gains 6 Feb 2024 Amazon, Microsoft, Nvidia and Alphabet powered roughly 8% of 2023’s North American venture deals, largely in artificial intelligence. In this Exchange podcast, Altimeter Capital investor Apoorv Agrawal explains why these companies are reaping rewards from the latest tech craze.
Disney board bake-off will burn Nelson Peltz 5 Feb 2024 The entertainment colossus is battling against the corporate cage rattler’s director nominees. His previous fight with P&G shows how he can win with a small stake and disparate shareholder base. But this latest contest includes other adversaries, making success less likely.