Management & Leadership

Credit Suisse’s Archegos albatross is hard to dump

29 July 2021

A clampdown on risk after the lender lost $5.5 billion on Bill Hwang’s fund contributed to outflows of client assets and lower investment-bank revenue. And a review of the sorry saga found deep cultural failings. That complicates Chair António Horta-Osório’s efforts to move on.

Cost control gives Barclays edge over Deutsche

28 July 2021

Robust capital markets helped boost both lenders’ earnings in the first half. But the German bank run by Christian Sewing likely needs top-line growth to hit its 2022 profit goal. Rival Jes Staley’s tighter efficiency means the UK group is less reliant on unreliable revenue.

Bolder smoke-free goals can singe BAT discount

28 July 2021

The Camel maker’s first-half sales grew 8% and it’s on track to generate 5 bln pounds in revenue from products like vapes by 2025. Yet its stock trades at half rival Philip Morris International’s multiple. U.S. exposure is partly to blame, but a bigger target would help too.

Rio Tinto CEO picks cash shower over kitchen sink

28 July 2021

Jakob Stausholm is spraying the miner’s shareholders with a hardy $9.1 bln in dividends after his first six months in the job. There’s also plenty to splash out on projects like Serbian lithium. Despite the mopping up required in ESG and beyond, the financial plumbing is sound.

Capital Calls: Bank mergers, GlaxoSmithKline

28 July 2021

Concise views on global finance: U.S. lender Citizens helps make the case for consolidation with its $3.5 billion acquisition of New Jersey-based Investors Bancorp. A pandemic drug bounty may help the UK pharma group’s CEO Emma Walmsley see off activist Elliott.

Capital Calls: Grill makers cook their IPOs rare

27 July 2021

Concise views on global finance: Weber and Traeger set conservative prices for their market debuts, leaving something on the table for new investors.

Tiffany shine contradicts LVMH deal tantrum

27 July 2021

The French luxury giant’s jewellery division, now including the famed U.S. brand, is more profitable than in 2019. Soaring first-half sales are also at odds with boss Bernard Arnault’s attempts to wriggle out of the deal during the pandemic. Future LVMH targets will take note.

ABB offers lesson in virtue of simplicity

26 July 2021

The $75 bln Swiss industrials giant is selling a power transmission unit to RBC Bearings for $2.9 bln. The rich price vindicates CEO Bjorn Rosengren’s plan to slim down and focus on electrification and robots. That will likely cement a premium valuation versus rival Siemens.

Capital Calls: Duolingo IPO valuation

26 July 2021

Concise views on global finance: The language learning app has increased its price by almost 20%.

GSK’s messy split opens door to cleaner M&A cure

26 July 2021

The British drugmaker could sell its consumer unit after pressure from activist Elliott. The maker of Advil painkillers might be worth $70 bln to a bidder like Procter & Gamble. A sale would mean a faster exit and raise more cash than CEO Emma Walmsley’s spinoff plan.

Review: The many unseemly faces of Facebook

23 July 2021

The $1 trillion social network’s ruthless rise is well documented. “An Ugly Truth” captivates with new, disturbing details on recent scandals and CEO Mark Zuckerberg’s handling of the firm’s growing power. The uglier reality is that its 3 billion-plus users aren’t that bothered.

EQT makes hay while clouds begin to gather

22 July 2021

The $46 bln buyout group’s shares rose 11% after first-half earnings soared. CEO Christian Sinding is selling companies in frothy markets while return-hungry investors pile into his funds. Higher interest rates would undermine both trends, as well as EQT’s richly priced equity.

Cigar exit is next strike in Swedish Match revamp

20 July 2021

Most of the $14 bln group’s sales come from oral tobacco and nicotine pouches which are less harmful than cigarettes, giving it a rich valuation. But rivals like Philip Morris are catching up. Getting out of stogies could raise $2 bln and give its stock a brighter ethical flame.

UBS’s Ralph Hamers is a CEO in search of a problem

20 July 2021

The $50 bln Swiss bank is one of the few in Europe trading at book value and earning its keep. The Dutch boss could cut more expenses, but it won’t get him anywhere near U.S. rivals’ profitability levels. The path of least resistance is to change little and talk a lot about ESG.

Ackman music SPAC flop makes second album trickier

19 July 2021

The billionaire’s $4 bln blank-cheque vehicle will seek a new deal after U.S. regulators questioned its purchase of 10% of Universal Music. The false start could put off future targets. For all its investor-friendly features, the vehicle’s backers may end up singing the blues.

Zegna’s SPAC deal offers discounted path to luxury

19 July 2021

The Italian maker of pricey men’s suits is shedding its stock market aversion to list in New York via a blank-cheque company. At an enterprise value of $3.2 bln, it’s more affordable than most peers. Still, investors have to trust its ability to navigate the shift to casualwear.

Capital Calls: Online fashion retail

15 July 2021

Concise views on global finance: The return of old customer habits and muted demand as the pandemic lingers could reverse the recent stellar run of the likes of ASOS.

Elon Musk is stuck in an alternate past

13 July 2021

In testimony about the 2016 SolarCity deal, Tesla’s boss said the carmaker would “die” if he wasn’t CEO. That was true once, but not now. He’s in denial about his sway over the board then, too. It suggests governance changes since could be at risk if he becomes chairman again.

Review: The dark side of stakeholder capitalism

9 July 2021

Arif Naqvi promised to make money while doing good in emerging markets. But he treated his Abraaj private equity group’s cash as his own, pocketing $780 mln. “The Key Man” tells how he hoodwinked the likes of Bill Gates and TPG. It’s an overdue reality check for impact investing.

Wizz Air CEO’s 100 mln pound bonus is aptly remote

6 July 2021

Jozsef Varadi’s payday could be even bigger than Michael O’Leary’s at rival Ryanair if his airline’s shares nearly treble. Linking such a big reward to stock performance looks crude but the target implies a fourfold revenue jump. Even Varadi can’t sustain that steep a climb.