Regulation

Chancellor: Regulators will kill the SPAC frenzy

20 April 2021

Like “Bubble Companies” of 1720 England, today’s blank-cheque vehicles are “carrying on an undertaking of great advantage, but nobody to know what it is.” That speculative era ended when authorities stepped in. The SPAC bubble may be more rational but will meet a similar fate.

Capital Calls: Bank of America, WeWork, Kering

20 April 2021

Concise views on global finance: The bank’s shareholders voted against a deeper dive into its impact on racial inequality; the office landlord is taking bitcoin as payment, for now; the Gucci owner needs to run faster to catch arch-rival LVMH.

EU’s new supply-chain stick delivers fair whack

16 April 2021

Germany and others plan to make firms liable for human rights and environmental abuses by suppliers. The financial gains derived from outsourcing justify the legal stretch. Scandal-wary giants like Nestlé already self-police their sourcing. Hefty fines are an added incentive.

China’s antitrust push forces digital reinvention

15 April 2021

Beijing has ordered 34 online platforms including ByteDance and JD.com to rectify their behaviour. Unable to demand exclusive contracts, abuse subsidies or personal data, some will scramble to find new revenue streams. That means M&A, vertical integration, and research spending.

Capital Calls: Christine Lagarde, Bernie Madoff

14 April 2021

Concise views on global finance: The European Central Bank president’s quest for inflation will take a while to achieve its goal; investor gullibility will live on after the death of the Ponzi schemer in a U.S. federal prison.

Capital Calls: LVMH surges back to full health

13 April 2021

Concise views on global finance: The 300 billion euro luxury conglomerate’s first-quarter sales surpass pre-Covid-19 levels.

Beijing makes Ant’s credit less addictive

13 April 2021

The central bank is curbing the fintech giant's $260 bln consumer loans business. Surging household debt is raising alarm bells, so it looks prudent to make it harder to borrow for online purchases. But the overall effect will weaken Ant’s biggest appeal to its vast user base.

China’s rectified internet will be fairer, duller

14 April 2021

Having fined e-commerce giant Alibaba $2.8 bln, President Xi Jinping is widening his net to other hot tech companies. Halting monopolistic practices is welcome, but entrepreneurs and investors must start pricing in the risk of a sweeping, unfocused and indefinite crackdown.

China’s Alibaba slap offers clues to hit Amazon

12 April 2021

Jeff Bezos’s firm has reason to worry about the $2.8 bln fine for Jack Ma’s e-commerce giant. Beijing’s definition of the appropriate market and focus on data may provide helpful tips to U.S. watchdogs. Still, Amazon has something Alibaba lacks: recourse to American courts.

SEC’s SPAC threats need more firepower

9 April 2021

The U.S. watchdog is zeroing in on the projections that targets of blank check companies use in deals. That focus is a start. But more and clearer disclosures on deal structure, price, and management goodies are needed too. Then the agency has guardrails to punish rule breakers.

Capital Calls: Cellebrite good times

8 April 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.

SPACs can reverse listings decline with SEC’s help

7 April 2021

Blank-check vehicles are flawed, but they bring new businesses to public markets. If the hot first-quarter pace keeps up, SPACs could double the number of firms traded on U.S. exchanges in maybe four years. Even if activity slows, it’s a reason watchdogs may treat them gently.

Capital Calls: Bling deal

6 April 2021

Concise views on global finance in the Covid-19 era: Signet, the owner of jewelers Zales and Kay, is buying rental firm Rocksbox.

Wall St may get greater of two bank capital evils

5 April 2021

Financial firms just lost a regulatory perk that had allowed them to guzzle Treasuries with abandon. They may yet get a reprieve since looser leverage limits help the central bank too. But if the Fed tightens other capital rules instead, lenders could be even worse off.

Trains deal takes regulatory risk on a round trip

1 April 2021

Canadian Pacific can effectively close its $25 bln takeover of Kansas City Southern before watchdogs approve the deal, because of a quirk of U.S. rail regulation. Sellers’ shareholders get paid out. But the combined company shoulders regulatory risk in a more complicated way.

Viewsroom: Everything we know about Archegos

1 April 2021

The extraordinary unwinding of Bill Hwang’s family office was one of those rare stories that connected Breakingviews columnists from Hong Kong, New York, Zurich, London, Melbourne and Washington into one big, hard-working family. Here are some of the lessons they learned.

Capital Calls: Elon Musk, LeBron James

1 April 2021

Concise views on global finance in the Covid-19 era: Endeavor, Ari Emanuel’s entertainment group, is hoping the Tesla boss’s stardust will help a second attempt at an IPO; the basketball star’s stake in the Red Sox is a foil to Steve Cohen’s Mets deal.

Joe Biden’s trustbusters reveal their merger DNA

31 March 2021

The U.S. Federal Trade Commission wants to block Illumina’s $7.1 bln purchase of cancer-testing outfit Grail. Preventing the gene-sequencing group from reabsorbing a company it spun out in 2017 shows that watchdogs’ tougher thinking about competition is turning into action.

Deliveroo is unsavoury appetiser for UK IPO revamp

31 March 2021

The food delivery group’s shares dropped up to 30% on their stock market debut. Hefty losses, a punchy valuation and founder Will Shu’s super-voting stock proved a turnoff. The flop should prompt a rethink of the government’s rushed plans to lure more such companies to London.

Capital Calls: Volvo IPO, Walgreens, Saudi Arabia

31 March 2021

Concise views on global finance in the Covid-19 era: Geely’s mooted $20 bln valuation for its Swedish brand still looks ambitious; Amazon can't match the transatlantic pharmacy chain's in-store clinics; Mohammed bin Salman grabs private cash to pay for a switch away from oil.