Technology

Netflix investors risk ruing streaming-stock binge

21 January 2020

Reed Hastings’ firm has little if any need for TV ratings, box-office sales or ads, unlike rivals. Shareholders focus on subscriber and revenue growth, fueling its stock-market success. But a slowdown in new users and an excessive, if declining, cash burn put that under threat.

Democratizing U.S. data access has drawbacks

21 January 2020

Plans to change how journalists handle some releases, including the crucial jobs report, aim to ensure traders and the public get them at the same time. But markets may become jumpier. And those with big bucks will still contrive to get the data a few microseconds sooner.

Telco IPO is only one way to paint Africa Orange

21 January 2020

The French group may float its local unit, which could be worth nearly 13 bln euros. That’ll raise plenty of cash to enter Ethiopia but isn’t CEO Stephane Richard’s only option. A mobile-tower sale would achieve the same aim, and deliver a bigger valuation boost for the parent.

BAE’s U.S. pivot can help defuse Saudi discount

20 January 2020

The $27 bln UK defence firm has bought satellite navigation and radio businesses from merger partners Raytheon and United Technologies. The $2.2 bln price looks fair. Greater sales in America, and a lesser reliance on Riyadh, should boost the Typhoon-maker’s depressed stock.

Microsoft puts climate grandstanders in the shade

17 January 2020

The $1.3 trln software firm’s plan to remove all carbon it has ever produced raises the bar for rivals seeking to appear green. Funding tech to remove atmospheric CO2 adds a multiplier effect. The only way Microsoft could improve on this would be to ditch its dirtier customers.

Huawei can afford to hang up on America

17 January 2020

The Chinese telecoms firm is fighting to keep its rural-carrier customers amid D.C. pressure. It’s a losing battle and makes little sense given the tiny contribution to Huawei’s top line. Quitting the U.S. would get rid of a headache and leave more energy for bigger conflicts.

Trump’s trade war chases its own tail

16 January 2020

The U.S. president is hailing his agreement with China as a boost to farmers and manufacturing workers. It is, but only because they were the losers from trade conflict. Obama showed that following the rules doesn’t work; Trump has only shown that ripping them up doesn’t either.

Holding: EU may spoil FBI bid to hack Apple phones

16 January 2020

A deal allowing U.S. firms like Facebook to move data from Europe is already fragile. It might break if the iPhone maker bows to criticism from Donald Trump and others and unlocks a mass shooter’s devices. Law enforcement matters, but privacy shouldn’t be so easily breached.

China trade deal gives Trump a campaign win

15 January 2020

Beijing pledged to buy more U.S. goods and enforce intellectual-property rights. It has fallen short on similar promises in the past, and anyway the conflict was partly whipped up by the U.S. president. Still, he can tout the new “phase one” agreement as he seeks re-election.

UK’s $13 bln tech scene may already have peaked

15 January 2020

Startups in Britain raised 44% more money last year than in 2018. Relative to the size of its economy, UK technology investment now matches the U.S. A Brexit-induced talent squeeze, and Prime Minister Boris Johnson’s strategic pivot away from London, will cap future growth.

Facebook cash a CEO blessing, investor curse

14 January 2020

Antitrust heat makes it hard for the $633 bln social network to use its $52 bln war chest on deals. A dividend creates a tax hit for its boss Mark Zuckerberg. Without warehouses to buy or software to bolster, buying shares is the best option. But that consolidates power.

Capgemini blinks first in Elliott face-off

14 January 2020

The French IT services group has raised its offer to buy $4 bln Altran despite previously insisting it wouldn’t. CEO Paul Hermelin is hoping that swallowing his pride will get him what he wants. But a modest $140 million bump up is unlikely to placate the holdout U.S. activist.

Visa learns sellers have upper hand in fintech M&A

14 January 2020

The $421 bln group is shelling out $5.3 bln for Plaid, which enables payments that bypass the card network. For a rich acquisition multiple, it gets a hedge against a potential threat. The U.S. startup’s owners can cash out and let others worry about challenges such as Big Tech.

Finablr faces tricky reboot after Travelex hack

14 January 2020

Shares in the London-listed fintech group have fallen 23% after a cyberattack on its bureau de change unit. The $350 mln decline probably overstates the immediate damage. The bigger risk is whether the mess deters corporate clients from Finablr’s faster-growing payments business.

Consumer wallets are top risk to chip titan TSMC

14 January 2020

A heady valuation multiple for Taiwan's $295 bln supplier to Apple, Huawei and others reflects its relentless march on rivals. Rising retail prices for ever-fancier smartphones, though, may curb demand. That’s possibly the biggest risk for the tech supply chain’s sturdiest player.

Silicon Valley wakes up to financial independence

13 January 2020

Scooter-sharing outfit Lime is exiting cities and letting staff go in the hope of turning a profit. After WeWork’s nightmarish IPO failure, it’s not the only startup whose vision now includes making money. What’s old has become new for tech newbies, but growing up isn’t easy.

Private equity tries for the tech patriot premium

9 January 2020

Insight Partners is buying a Swiss cloud company for $5 bln, relocating it to the United States and replacing its Russian co-founders on the board. Veeam wants U.S. growth, and Insight will eventually want to sell or float the business. Making it more American can only help.

China’s Ucommune may have missed WeWork IPO memo

9 January 2019

The country's biggest shared-office outfit is gearing up to go public after its U.S. peer flamed out. A $2.6 bln private valuation implies a similarly punchy 13 times estimated sales. And like WeWork, Ucommune rents from its entrenched founder. A down-round or worse probably awaits.

Elliott doubles down on Capgemini game of chicken

8 January 2020

The U.S. activist will not tender its 14% stake in Altran, which the French consultancy wants to buy for $4 bln. Buoyant markets should limit Elliott’s downside if the deal fails. And if Capgemini secures a majority, a legal trial may yet give investors a shot at a higher price.

Investors fuel unicorns’ belief in their own magic

7 January 2020

Private tech startups can control their valuations by only raising money when their worth is rising. Valuing businesses based on a fraction of their capital and the latest preferred-share terms also creates problems. Even WeWork may not be enough of a reality check.