Spotify and Netflix hum different content tunes 4 Dec 2023 The music-streaming service is slashing its workforce by 17% to stem losses. Like Netflix, Spotify is beholden to onerous content costs. But Reed Hastings’ company is making shows and has higher gross margins. Spotify boss Daniel Ek’s ‘buy’ strategy hasn’t borne regular profit.
Capital Calls: Carlyle, Panasonic 22 Nov 2023 Concise views on global finance: The US private equity firm is making a decent return selling its stake in McDonald’s China back to the burger chain. The $25 bln Japanese conglomerate is offloading a chunk of its low-margin automotive unit and will consider a listing, too.
Microsoft will struggle to clean up ugly AI mess 20 Nov 2023 The software giant hired ousted OpenAI boss Sam Altman to run a new in-house artificial intelligence hub. It creates fresh confusion about strategy and brainpower, as CEO Satya Nadella scrambles to preserve his company’s $13 bln investment. There’s probably more upheaval to come.
Carlyle’s next takeover target should be itself 16 Nov 2023 Boss Harvey Schwartz lacks the small-investor firehose or balance-sheet heft of listed rivals that public investors crave. A muddled handover by the firm’s founders slowed progress. They could help now by joining with outside capital to buy the private equity giant out.
Endeavor’s envy could become contagious 7 Nov 2023 The $12 bln talent agency and WWE owner led by Hollywood mogul Ari Emanuel is eyeing options after billionaire François-Henri Pinault paid a rich price for peer CAA. Silver Lake, with 71% of the vote, wants to take it private. A stingy bid risks making minority investors jealous.
Vans owner VF is due a wardrobe refresh 6 Nov 2023 The $6 bln apparel empire’s debt soared as shares sank 40% under its ex-CEO, whose costly deal for Supreme ran counter to its modus operandi. New boss Bracken Darrell’s cost-cutting plan has promise. Selling the streetwear brand and investing in known hits is the best next step.
Tough dealmaking conditions dull Waystar’s shine 31 Oct 2023 The healthcare technology firm is angling for a stock-market listing on the back of rapid, acquisition-fueled growth. With a sale looking difficult and heavy debt bearing down, an IPO may be its private equity backers’ best option, but a mooted $8 bln valuation looks steep.
Smithfield US homecoming looks like pig in a poke 30 Oct 2023 China’s biggest pork firm may relist its US unit in New York. With $7.6 bln in market cap, investors don’t seem to attach much value to its 2013 buy. Moving West is a hedge against geopolitics, but a revaluation is unlikely if the Washington-Beijing relationship remains fraught.
Music fund’s flat deal calls for major key change 25 Oct 2023 Shareholders are pushing Hipgnosis, run by industry veteran Merck Mercuriadis, to overhaul its board and cancel a $440 mln asset sale involving Blackstone. Poor governance and a discount value add weight to their case. A new management team could do better by selling the company.
Flights to safety in a dangerous world are on sale 20 Oct 2023 Fears of war, pestilence or financial collapse usually drive demand for safe assets like US treasuries or gold, making them a gauge of unease. Yet amid spiraling global threats, that isn’t happening. Whether from calm or complacency, the price of geopolitical insurance is cheap.
Siemens is case study in China de-risking dilemma 4 Oct 2023 The $110 bln conglomerate trades well below the sum of its parts. The normal fix would be to offload low-margin areas like its legacy railway division. But Siemens has a patchy record on M&A, and its growth story largely depends on China – from which it is obliged to de-risk.
Alibaba spinoff can deliver two recovery packages 4 Oct 2023 Logistics unit Cainiao’s name may mean “rookie”, but the group is profitable and weaning itself off dependence on its parent. A successful IPO valuing it at $10 bln or more would warm up Hong Kong’s market and show Alibaba’s overhaul is on track after CEO Daniel Zhang’s exit.
Asia’s breakup party is happening under duress 4 Oct 2023 India’s Anil Agarwal is splitting his $10 bln mining company Vedanta into six. As with China’s Alibaba, the carve-up is spurred by external problems, namely debt at its unlisted parent. Tycoons are unlocking value for weary shareholders, but mostly because they have no choice.
Retailer ‘shrink’ becomes too big to box up 3 Oct 2023 American stores lost $73 bln to theft last year, a nearly 20% rise from 2021, while Target just blamed crime for nine closures. Few chains report specifics, however, stirring doubts about anecdotal evidence. Consistent disclosure would help keep investors from getting fleeced.
China has reason not to let Evergrande rejig rot 3 Oct 2023 Its chairman is suspected of crimes. Offshore creditors may hope a proposal to restructure their $19 bln holdings is still on the table. A forced liquidation will see them recover as little as 2%. Their fate will offer a clue to whether Beijing still values overseas debt markets.
Toilet maker artfully unclogs bondholder backup 29 Sep 2023 Embattled Ideal Standard has struck a $640 mln deal to be bought by Germany’s Villeroy & Boch. The key was persuading creditors to accept less than par on 2026 debt. Other struggling companies could make use of similar financial plumbing.
Uncle Sam risks recession by a thousand cuts 22 Sep 2023 A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.
Capital Calls: Disney, Cazoo 20 Sep 2023 Concise views on global finance: Boss Bob Iger’s $60 bln splash on theme parks and cruises invites further scrutiny of the Magic Kingdom’s wild cash flow ride; the UK-based online car retailer, valued at $7 bln in a SPAC deal two years ago, is handing the keys to bondholders.
Capital Calls: Citi shakeup 13 Sep 2023 Concise views on global finance: Boss Jane Fraser is restructuring divisions and slashing jobs, calling the moves the most “consequential changes” to how the mega-bank has been organized in 20 years. Given its tortured history, that's a big claim to live up to.
Capital Calls: Warner Bros’ Max, GameStop 7 Sep 2023 Concise views on global finance: The HBO-parent intends to offer live sports and news to its streaming package. Customers will end up footing the bill; the $6 bln video-game retailer turned itself from a meme stock to a viable company by recovering through cost cuts.