Education

Textbook supplier Chegg flunks terminal-value test

2 Nov 2021

A 48% collapse in the educational book-rental company’s shares – after it cut its sales forecast by just 6% – might seem draconian. Chegg’s misfortune shows how, for companies betting on long-term demographic trends, small shifts in assumptions can trigger huge changes in worth.

Indian edtech scores relatively high marks

16 Aug 2021

Foreign investors are piling into Byju’s, upGrad, Eruditus and others, fuelling valuations and acquisitions. They have a stronger foundation for international expansion than Chinese peers. A young population also makes a Beijing-style crackdown on online learning less likely.

Chancellor: Bringing down the Red Curtain

4 Aug 2021

Recent shocks from Beijing are reminders that while investors in the West are protected by the rule of law, China’s markets are characterised by the “rule by law”. Investors shouldn’t forget Beijing has the final say on how capital is allocated and who gets paid and who doesn’t.

China’s tutoring rules create tough VIE homework

27 Jul 2021

Variable interest entities used to skirt overseas investment restrictions have existed in a regulatory gray area. Beijing’s ban on foreign funds in education suggests those days are ending. Unwinding the structures will be messy, but also could teach other industries a lesson.

Chinese communists are souring on capitalism

26 Jul 2021

Beijing wants its $120 bln tutoring industry to turn non-profit, wiping billions off U.S.-listed TAL and peers. Fintech giants are being forced to hand intellectual property to state banks. A push to shrink margins and convert private assets into public goods is gaining momentum.

China’s education crackdown flunks economics

21 Jun 2021

Tougher rules on tutoring services are hammering shares of TAL, Gaotu and others. The country’s manic competition for school admission distorts the labour supply and suppresses the birth rate. It’s a byproduct of a widening wealth gap, however. This approach could make it worse.

Beijing finally gives China shorts a helping hand

15 Jun 2021

Central government crackdowns and the collapse of U.S.-based fund Archegos have delivered selective relief to investors betting against Chinese companies listed in New York. Caution is warranted as outbound investment quotas ease. Patriotic reinforcements are on the way.

Review: Meritocracy is a myth

4 Jun 2021

The business leaders who flock to the World Economic Forum use wealth and power to get their offspring into the best schools. This approach increasingly undercuts a society based on merit. Today’s capitalist elite, argues Adrian Wooldridge, is a new aristocracy in disguise.

Capital Calls: AT&T’s bankers, Blackstone in Italy

17 May 2021

Concise views on global finance: The U.S. telecom giant’s unwinding of its purchase of Time Warner is a gift for advisers on Wall Street; a court rules that the U.S. private equity firm’s 2013 purchase of Corriere della Sera’s HQ was valid.

Capital Calls: Disney misses the mark

13 May 2021

Concise views on global finance: Walt Disney reported nearly 104 million subscribers for its streaming flagship service.

David Swensen’s Yale model is tough to follow

6 May 2021

The architect since 1985 of the Ivy League university’s $31 bln endowment has died. His early belief in alternative, uncorrelated assets and top-ranked returns changed the industry. Swensen’s long-term outlook and relative lack of greed make him particularly hard to replace.

EQT pays an electrifying price for U.S. bus ride

23 Apr 2021

The Swedish buyout group is acquiring two of travel operator FirstGroup’s North American units for $4.6 bln. It’s a punchy valuation. To earn a decent return, EQT will have to boost growth by converting the iconic yellow school bus network into a fleet of clean electric vehicles.

The Exchange: Fewer bankers, more engineers needed

20 Apr 2021

That’s one of Jacques Attali’s many prescriptions to enhance the economy of life. The former EBRD boss and French presidential adviser also discusses Big Tech breakups, Europe’s lagging vaccination efforts, Macron’s political prospects and his plan to close the elite ENA.

Capital Calls: Cellebrite good times

8 Apr 2021

Concise views on global finance in the Covid-19 era: The Israeli cracker of mobile-phone encryption is going public via a SPAC at a $2.4 billion valuation.

UK’s Pearson listens to its own online lessons

8 Mar 2021

The 6 bln pound firm is doubling down on a year of virtual learning by selling education directly to individuals. Winning mass-market adherents will take time and is not a given. Yet anything that reduces its reliance on declining textbook sales is a step in the right direction.

BC Partners finds awkward fix for low-tech buyouts

7 Dec 2020

After three failed IPOs, the private-equity firm may sell publisher Springer Nature to a new fund it controls for 6 bln euros, the FT says. It’s messy, but probably better than a botched listing. With public investors wary of sluggish assets, other deals may face a similar fate.

Corona Capital: Record Dow, Basketball, GoCompare

25 Nov 2020

Concise views on the pandemic’s corporate and financial fallout: Vaccine optimism shunts the blue-chip Dow Jones index through 30,000; U.S. college basketball gets back on the court; and UK publisher Future snaps up the bargain-hunting website.

Teaching apps confront elephant in the classroom

15 Oct 2020

SoftBank’s call to buy a 9.7% stake in Kahoot! reflects a surge in demand for educational tech. But given users of the $2.7 bln Norwegian group’s app access it using Google, the U.S. tech giant may decide to develop its own version. That could at least limit stateside growth.

Corona Capital: Bankers, Virus vices, Student digs

8 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: Japan’s Mizuho tries to get its employees to take it easy; smokers and gamblers struggle to kick the habit during lockdown; UK landlord Unite Group finds even student property is not immune to Covid-19.

Corona Capital: Dividends, Zoom, Big-screen blues

24 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: As company bosses try to conserve cash, investors are feeling the pinch; Zoom has a back-to-school problem; and a mediocre debut for Russell Crowe’s new road-rage movie shows Hollywood is stuck in the slow lane.