Atlassian CEOs give Elon Musk mission-creep lesson 1 Aug 2022 The $53 bln software company’s two bosses are using their own cash for dealmaking side projects. They’re avoiding getting too distracted from their day job by having experts mostly run the show. It’s a useful example of how the Tesla chief can avoid a repeat of his Twitter mess.
Capital Calls: LVMH succession, Swedish Match 22 Jul 2022 Concise views on global finance: Bernard Arnault insures the luxury group against future family feuds; the oral tobacco company’s results will embolden deal resisters.
Fintech crash is an M&A opportunity for bold banks 21 Jul 2022 Financial technology groups like $8 bln Affirm, Klarna and Robinhood have plunged in value. Heavy losses and obstinate founders make them tough takeover targets. But lenders like Goldman Sachs could in theory run them more profitably – and boost their own growth in the process.
Video game deal shows late-cycle identity crisis 13 Jul 2022 Graphics-maker Unity is buying Israeli ad-tech firm IronSource for $4.4 bln, a 94% premium. That suggests optimism. But insider Silver Lake will make a $1 bln convertible investment while Unity buys back stock, buffering dilution. Classically, smart investors protect themselves.
Capital Calls: Delta’s earnings are bad and worse 13 Jul 2022 Concise views on global finance: Shares in the company fell 7% after the company missed earnings expectations. That’s bad, but worse is that its main strength – pricing power – has limits.
Capital Calls: PC meltdown, Software short-seller 12 Jul 2022 Concise views on global finance: Shipments of personal computers suffered the biggest decline in years, yet still exceed pre-pandemic levels; SoftBank-backed communication software group Sinch has lost over a third of its value after a short-seller attacked its accounting.
Capital Calls: Klarna’s slashed valuation 11 Jul 2022 Concise views on global finance: The Swedish fintech group’s valuation is down 85% in just over a year to $6.7 bln.
Japan strains to populate its sparse unicorn farm 4 Jul 2022 As economic troubles mount, Prime Minister Fumio Kishida wants the country’s $1.5 trln pension fund to play venture capitalist to help create more startups like SmartNews and Spiber. It will take far more than government money, however, to incubate entrepreneurial spirits.
Robinhood’s reversal, Russian oil cap 30 Jun 2022 The digital brokerage is worth less than a quarter of its $32 bln IPO value. In this Viewsroom podcast, Breakingviews columnists argue that its $7 bln cash pile and ample user base make it an attractive target. Also, Western leaders’ plan to restrict funds to Moscow may backfire.
Naspers “put” tackles one of its Tencent problems 27 Jun 2022 The South African firm and its Dutch offshoot will buy back stock by slowly trimming their $133 bln stake in the Chinese tech giant. Tax liabilities and clunky governance remain valuation drags. But investors can worry less about Naspers blowing its riches on other startups.
Zendesk’s sad exit shows tech bubble madness 24 Jun 2022 The customer service software firm agreed to a $10 bln offer – 40% lower than the one it nixed in February. Yet the private equity buyers aren’t getting an obvious bargain either, at over 50 times estimated EBITDA. Readjusting to reality can take a while.
Capital Calls: Hydrogen IPO, Call centre M&A 20 Jun 2022 Concise views on global finance: Despite Thyssenkrupp postponing its clean energy listing, De Nora is still pressing on with its own one at a lower 3 bln euro valuation; customer-service group Sitel agrees to buy 2.6 bln euro rival Majorel in a cash-and-stock deal.
Rift at the top casts doubt on Atos’ breakup plans 15 Jun 2022 The French IT company’s shares slumped after its new CEO resigned just as it broached a tentative plan to divide its cybersecurity and legacy infrastructure businesses. Longer-term, Atos needs radical surgery. In the short run, delivering on its targets would be a start.
Broadcom gives only limp defense of VMware deal 26 May 2022 The chip giant is being vague about the benefits of a $61 bln tie-up with software maker VMware, giving only a lofty and distant profit target. Meeting it would require juiced-up revenue or massive cost cuts. The ambiguity may reflect that shareholders have no real say anyway.
Broadcom’s build-up hints at future break-up 23 May 2022 A bid for $48 bln software firm VMware would fit with boss Hock Tan’s campaign to turn his chipmaker into a kind of tech conglomerate. The potential returns don’t look great, and nor does the logic. If Tan succeeds, it could bolster the case for rethinking Broadcom’s structure.
Capital Calls: Stablecoin’s safety measures 19 May 2022 Concise views on global finance: As crypto assets wobble, Tether, with $75 bln worth of digital tokens in circulation pegged to the U.S. dollar, is boosting its reserves of cash and U.S. Treasury bills while shrinking its commercial paper holdings.
Klarna’s $46 bln price tag endures only in theory 19 May 2022 Investors heavily marked down the value of the Swedish startup’s buy-now-pay-later rivals like Affirm. On their sales multiples, privately held Klarna’s valuation would be cut by 75%. While the business is diversified with better funding, it still requires lots of red pen.
Tech unicorns become zombies 13 May 2022 Companies like Peloton, Carvana and DraftKings hit up investors for cheap capital to bolster balance sheets over the past years. But they haven’t used the cash to sort out business models – and they continue to burn through it. They have varying cushion but may already be dead.
Stablecoin crash drags crypto ideals back to earth 11 May 2022 TerraUSD, a digital token supposedly pegged to the U.S. dollar, slumped to a fraction of that. The popular store of value is vulnerable because its design is based on trading incentives, not hard reserves. For crypto fans there’s a tradeoff between decentralisation and stability.
Grindr’s SPAC profile picture is a blur 10 May 2022 The LGBTQ community’s favoured dating app is listing via a merger with a blank-cheque firm run by a major shareholder. The $2.1 bln price tag looks chunky next to peers like Bumble. Besides data security and governance, investors can fret about potential conflicts of interest.