Technology

India’s taxi-app war enters China territory

15 June 2018

Local operator Ola lost over $700 mln in the year to March 2017 despite growing revenue 70 pct. That’s nearly as much as Uber was burning when it was battling China’s Didi. The U.S. company’s commitment to India suggests losses will keep piling up for both SoftBank-backed firms.

Xiaomi IPO escalates China’s battle of the bourses

15 June 2018

The handset-maker will now sell at least half of its mooted $10 bln offering in Shanghai. That is a blow to the other listing venue, Hong Kong, which changed its rules to woo more tech IPOs. The city will have to share a lot of this business with its two mainland rivals.

China’s DRAM dreams may trigger glut memories

14 June 2018

Consolidation, rising costs, and technological limits have turned memory-chip production from a cash-burning exercise into a profitable triopoly. Chinese firms’ efforts to break in – along with Beijing’s pricing investigation – risk eroding the industry’s good times.

FIFA’s $25 bln backers could end up on losing team

14 June 2018

Soccer’s governing body may tap investors like SoftBank to fund two new tournaments. They’d have to be almost as lucrative as the World Cup before the backers see a return. Like SoftBank CEO Masayoshi Son’s other bets, it hinges on creative thinking and generous assumptions.

Hong Kong could teach China tech some manners

14 June 2018

Sina plans a secondary listing in the city, under new rules welcoming Chinese tech outfits traded overseas. In New York, the $7 bln web portal and its peers can issue super-voting stock on a whim and skip annual general meetings. The Fragrant Harbour will be less soft.

Toshiba’s $6 bln buyback signals welcome change

13 June 2018

The electronics group will retire more than it raised from hedge funds last year. While it was flush with cash after selling a memory chip unit, the new CEO had plenty of reasons to hoard. That he didn’t aligns Toshiba with Japan’s broader push to be more investor-friendly.

Facebook is light on Washington friending skills

12 June 2018

Its lobbyists tried to do damage control in Congress as its data-sharing with China’s Huawei came to light. Their lack of answers left the impression they weren’t in the loop, and the company’s defensive tweets didn’t help. Facebook could use a lesson in diplomacy as well as transparency.

Valuing Xiaomi

12 June 2018

The Chinese smartphone maker is heading toward one of the biggest IPOs in years. A $75 bln valuation is being reported as a possibility. Run the growth, profitability and earnings multiple numbers to see how such a lofty figure might be achieved.

Only a bold call dials up $75 bln Xiaomi valuation

12 June 2018

The Chinese company would have to deliver another year of soaring handset sales and double revenue from internet services. Superior profit margins and premium multiples also must be assumed, a Breakingviews calculator shows. Anything less and the IPO will have the wrong number.

CFIUS proves it is not a one-way bet after all

11 June 2018

The U.S. security panel cleared China Oceanwide’s $2.7 bln takeover of Genworth, after nearly two years of waiting and as Washington and Beijing feud over trade. The insurer’s shares carried a 30 pct discount, showing just how hard it is to price regulatory risk right now.

China’s $50 bln bid for market calm might backfire

11 June 2018

New funds will guarantee demand for a string of big tech listings. They will also lock up backers' money for three long years, to dampen a frothy market. There could be unintended results: thinly traded stocks that are more volatile and fund investors who regret being trapped.

Verizon’s new boss will unscramble M&A signals

8 June 2018

Outgoing CEO Lowell McAdam sent mixed messages on whether the U.S. telecom would buy a big media company. Replacing him with the chief tech guy suggests Verizon is more interested in growing its reach than its content. A bid for $15 bln satellite operator Dish could follow.

Ant’s $14 bln haul epitomises private excess

8 June 2018

The Chinese fintech group’s eye-popping funding round cements a $150 bln valuation. Ant raised nearly as much as Facebook and GM did in their IPOs, even as tech valuations cool and regulatory risks loom over Jack Ma’s firm. As insiders pile in, public investors may get squeezed.

Tencent gets onboard the state capitalism train

8 June 2018

The gaming giant and carmaker Geely are paying $670 mln to buy into a wifi unit of China Railway. Neither is an obvious choice to help bring passengers online. Still, Beijing will encourage more of these unlikely partnerships to help its public-sector behemoths pick up steam.

Viewsroom: Are tech investors lemmings?

7 June 2018

Despite Facebook’s mounting problems, only a third of independent shareholders refused to reelect Mark Zuckerberg and Sheryl Sandberg to the board. Tesla and Netflix owners tend to follow the leader, too. Yet protest votes are useful. Plus: Chinese stocks make it into the MSCI.

ZTE deal sets a bad precedent

7 June 2018

The White House will fine the sanctions-violating Chinese telecoms giant $1 bln and replace its board. The sum is a financial giggle, board changes look mostly symbolic, and a new compliance team will be challenged from the get-go. It’s a weak deterrent and a wasted opportunity.

China hands Facebook its worst political misstep

6 June 2018

The social network was already in trouble for Russian election meddling. But its undisclosed data-sharing with Chinese phone maker Huawei will inflame U.S. politicians from both parties. The dalliance makes punishing legislation, and tougher scrutiny from watchdogs, more likely.

Facebook’s top two get a muddled message

5 June 2018

Most independent shareholders elected to nix the social network’s super voting rights. Yet they voiced approval for Mark Zuckerberg and Sheryl Sandberg. The strong showing for the boss and COO undercuts the argument to scrap the structure that keeps them entrenched.

Apple’s value can chug well past $1 trillion

5 June 2018

The tech giant is close to being the first to pass that threshold in market capitalization, as Breakingviews predicted seven years ago. Growth has slowed but customers remain loyal and today’s valuation is far from stretched. Apple’s focus on data privacy may help it get there.

SoftBank’s Chinese chip deal doesn’t quite add up

6 June 2018

The Japanese group is selling 51 pct of its local Arm unit to unnamed buyers at a curiously low $1.5 bln valuation. SoftBank paid $32 bln for the semiconductor designer and the division accounts for a fifth of sales. China’s tech self-sufficiency push looms as a possible factor.