Profitable Klarna poses IPO valuation conundrum 9 Nov 2023 The pay-later group is making money. Ahead of a possible float, that makes it easier for CEO Sebastian Siemiatkowski to claim he has a viable business. Yet to get an uplift on his last $7 bln price tag, he’ll have to persuade investors to value Klarna like a fintech, not a bank.
Apple’s cash insures against exuberance 3 Nov 2023 The $2.8 trln iPhone maker’s valuation is rich even as growth slows, antitrust worries cloud its services business and trade wars threaten China sales. While investors seem as confident as ever, the company’s balance sheet suggests boss Tim Cook is exercising some caution.
Uncle Sam provides shaky base for Caterpillar 31 Oct 2023 The equipment maker beat third-quarter profit forecasts with help from Washington’s infrastructure bill. Yet half of the $550 bln package has been spent, and Caterpillar’s backlog is shrinking. Like other government-supported spending, federal aid can only help for so long.
Biden AI plan is one step in avoiding crypto trap 30 Oct 2023 The president’s new executive order aims to set regulatory guardrails for artificial intelligence. It still leaves a big hole for Congress to fill. Failing to set coherent rules risks the kind of piecemeal enforcement that hobbled crypto, but for a technology with higher stakes.
Meta tenuously clings to financial reality 26 Oct 2023 Facebook’s owner grew quarterly revenue 23% and vowed to keep expenses in check. AI investments and a planned hiring spree may yet run into an economic slump, however, and reverse an ad rebound. Only then will boss Mark Zuckerberg’s power of self-restraint become clear.
Worldline crash is pivotal moment for payments 25 Oct 2023 The $7 bln French group’s shares fell 60% after it said sales would be hit by a call to ditch riskier merchants. Investors expect payment providers to be on top of flaky transactions. The fact that a leading player has had to rethink will scare them, and alert regulators.
Stolen genetic data points to mutating cyber risk 17 Oct 2023 Biotech firm 23andMe may have fallen victim to hackers, joining other sabotage targets Clorox and MGM. Companies can strengthen their systems, but human error plays a role too – with customers and employees as potential vulnerabilities. That adds a new front to an ongoing battle.
Amazon’s space dreams deserve to be grounded 16 Oct 2023 The tech giant's $10 bln internet-in-the-sky venture is years late and thousands of satellites short in rivaling SpaceX. It may appeal to founder Jeff Bezos and his rocket-maker Blue Origin. But Amazon risks a costly rerun of prior telecom booms that led to painful busts.
One $16 bln deal travels lonely dual track 9 Oct 2023 Buyout shops GTCR and Apax may be exploring both a sale and an IPO for insurance broker AssuredPartners. Using two separate paths typically aims to create competitive tension and lift valuations. With equity, debt and M&A markets all cool, neither option poses a plausible threat.
Dating apps can embrace gamification of hookups 6 Oct 2023 Tinder is rolling out a $500-a-month service to keep pace with other matchmakers who cater to premium users. That might help $12 bln parent Match bring in more revenue. But a better way to capitalize on scale would be to charge per swipe. If gamers will pay, so will players.
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.
Meta’s EU subscription looks suspiciously pricey 3 Oct 2023 The Instagram owner may allow Europeans to pay $14 a month to avoid ads. It’s hard to see many users signing up, and the price is far higher than Meta’s regional revenue per user. Regulators and courts, which effectively pushed for this outcome, may get a phantom solution.
AI is making Meta virtually cool again 28 Sep 2023 Mark Zuckerberg talked up his $780 bln social media company’s artificial intelligence products at a developer conference. If they added as much value as Instagram, Meta could be worth $140 bln more. But Zuckerberg has to show he can monetize something he’s building from scratch.
Capital Calls: Pelululemon 28 Sep 2023 Concise views on global finance: The apparel firm and the exercise-bike maker have entered into a five-year partnership, ending a costly feud. For Lululemon, it removes the risk of an outright acquisition. Peloton gains a valuable partner, but still faces an uphill climb.
Apple may be poisoned by Google antitrust fallout 27 Sep 2023 Founder Steve Jobs once threatened “thermonuclear war” against his rival for copying the iPhone. Now, more than 15% of Apple's operating profit might be coming from fees paid by the search giant. The big risk is that an unfavorable verdict will taint its rich valuation multiple.
Microsoft’s gaming M&A takes it to the next level 27 Sep 2023 The $2.4 trln group’s Activision deal has been picked at by regulators, and it’s exposed to consoles that may be upended by cloud gaming. Still, the $69 bln play diversifies Microsoft into mobile. And it leaves the group better placed to fight the industry’s content wars.
Bankers’ IPO support could easily buckle 26 Sep 2023 Arm, Instacart and Klaviyo egged on opening pops for their listings by selling a meager number of shares, but have fallen since. While big debuts are good for the companies, their inability to outpace a still-weak market means the opportunity for others to follow remains narrow.
Amazon’s AI bulk-up merits the risk of a bust-up 25 Sep 2023 An agreement to plow up to $4 bln into artificial-intelligence startup Anthropic could give the tech giant’s cloud arm, crucial to its valuation, a growth boost. Despite the risks of a costly AI arms race or catching regulators’ ire, placing this catch-up bet makes sense.
Cisco’s $28 bln spelunking yields dicey deal 21 Sep 2023 Buying data and security outfit Splunk could increase recurring revenue at the $215 bln networking giant. Cisco is also paying a low multiple. But the two don’t have much overlap, and Splunk’s cloud-based business needs work. Cisco bears execution risk, which hinges on growth.
Instacart under-promises in hope of overdelivering 19 Sep 2023 The grocery delivery service’s shares started trading at $42 apiece, 40% higher than where it priced last night. That may seem wacky, but at $14 bln, Instacart is still reasonably valued. In this market, it’s a wise strategy for boss Fidji Simo.