Public investors lasso Square to tame the unicorns 19 Nov 2015 Jack Dorsey’s payments firm has priced below its indicated range and at less than half the value of its last funding round. A two-timing CEO, rising competition and losses provided ammunition for old-school mutual fund managers demanding big discounts to lofty private valuations.
Record fine is least of Toshiba’s problems 18 Nov 2015 The scandal-hit Japanese group faces a record regulatory fine, a newspaper says. A $60 mln levy would be embarrassing but easy to bear. That leaves Toshiba free to face its real challenges: regaining investor confidence and restructuring laggard businesses as fast as possible.
Dialog shareholders should short-circuit Atmel bid 17 Nov 2015 The Anglo-German chipmaker’s $4 billion-plus bid for its U.S. peer has been opposed by activist Elliott Management. Both sides have put forward doubtful theories to make their case. But Elliott is right on one thing: the integration risks look too big.
Apple and banks spoil for electronic-payment fight 12 Nov 2015 JPMorgan, Wells Fargo and others may let customers send money over the iPhone maker’s network. All are playing catch-up to the likes of PayPal and Facebook. The Apple Pay plan may wrest back some control for banks, but also portends an intense battle for money flows.
Strategies diverge on China’s new web battlefield 11 Nov 2015 The country’s online giants are pouring cash into local services like taxi-hailing and takeaway food. Baidu invests mostly in wholly-owned units, while Tencent takes minority stakes. Alibaba does both. As costs mount amid uncertain returns, investors are happier with less risk.
Tech crunched between clashing U.S.-EU privacy law 10 Nov 2015 Facebook got dinged in Belgium for secretly tracking visitors, while Spokeo’s similarly nosy conduct will probably go unpunished in America. Yet in neither case could victims prove they were harmed. The disparate outcomes highlight the need for more uniform data-gathering rules.
Banks and big media wake up to aggregation risks 10 Nov 2015 An array of websites and apps allow consumers to see multiple financial accounts in one place. BofA is the latest lender to resist. Similarly, Netflix aggregates TV shows and media companies are showing more hate than love. Both traditional industries are fighting the tide.
Square’s down round offers cautionary unicorn tale 6 Nov 2015 Jack Dorsey’s payments firm may go public for $3.5 bln, or 41 pct below its last private valuation. Rising competition, losing Starbucks’ business and deflating markets are only partly to blame. It’s a sign to well-funded upstarts that good ideas don’t always guarantee success.
Facebook a master at hooking users on mobile habit 4 Nov 2015 The social network reported more than 1 bln active daily visitors, a testament to its success in persuading people to check in on smartphones and tablets. Its reward was a 40 pct rise in ad revenue. Future growth may depend on pushing this kind of digital addiction.
Expedia finds back door to Airbnb’s market 4 Nov 2015 The travel site is paying $3.9 bln for HomeAway. Though the vacation-rental firm lacks the urban clout of its better-known rival, moving in with its new parent will help. Cost cuts are low, but HomeAway’s cash pile will ease the blow to Expedia of shelling out a 28 pct premium.
Financial tech has as much to gain as fear from D.C. 4 Nov 2015 A new lobbying group of five big Silicon Valley firms reflects concerns that Washington may not understand the benefits of booming fintech. Banks have long made similar complaints about Uncle Sam. Like them, the industry needs to realize that regulation can help rein in excess.
Singles’ Day spat shows Alibaba’s jealous side 4 Nov 2015 The Chinese e-commerce giant’s annual Nov. 11 shopping promotion has become a national festival. Now a smaller rival has accused Alibaba of bullying merchants into using only its platform. Market power may be good for driving sales, but not if it prompts regulators to weigh in.
No simple cures for Gilead and Apple valuations 28 Oct 2015 Like the iPhone maker, the biotech is the best in its industry and churns out hefty profit. Yet its stock trades at a big discount to the market. Investor impatience for astonishing new products - and fears that neither company will find them - borders on the irrational.
Did Watson randomly generate IBM’s weather deal? 28 Oct 2015 Big Blue’s purchase of the bulk of Weather Co assets carries no clear strategic logic or even a price tag. But it has created a golden opportunity for CEO Ginni Rometty to distract her long-suffering shareholders with a litany of buzzwords and hollow corporate speak.
Apple: a tech company with Chinese characteristics 27 Oct 2015 Almost a quarter of sales – and two-thirds of revenue growth – came from China. Apple’s new iPhone installment plan could bump this up even further. Chief Executive Tim Cook’s bet on the Middle Kingdom is yielding impressive dividends, but carries existential political risks.
Twitter CEO’s creative giveback is promising start 23 Oct 2015 Jack Dorsey is donating a third of his stake in the $20 bln microblogging site, or about $200 mln worth, to the employee compensation pool. The move should engender some needed loyalty after his decision to moonlight as CEO of Square. Twitter could use more such bold ideas.
Google and Amazon grapple happily with maturity 22 Oct 2015 Alphabet, the new holding company for the search giant, is returning cash to shareholders. Amazon delivered profits. Both operations are growing so fast, and throwing off so much cash, that they can act as responsible stewards of capital while still chasing the next big thing.
Dell may be poisoning EMC deal’s golden goose 21 Oct 2015 VMware, the separately listed, fast-growing software firm that EMC controls, is central to Dell’s buyout, now valued at $61 bln. The proposed tracking stock hurt VMware’s actual shares. The company’s own earnings just triggered another 20 pct plunge. The terms may need to change.
Aging tech firms suddenly look spry at M&A shindig 21 Oct 2015 The merger boom has hit data-storage provider Western Digital, chipmaker Lam Research and other old-line companies with $30 bln in transactions. The codgers see tie-ups as a way to boost efficiency and cut costs. More peers may join them before the deal clock strikes midnight.
Dell’s tracking stock 2.0 boasts fixes, new bugs 20 Oct 2015 The tech crash of 2000 exposed governance gaps and other risks of synthetic shares pegged to certain assets. The PC maker has patched some flaws in proposing to issue shadow VMware stock in its $60 bln-plus deal for EMC. But investors still might not relish the user experience.