China audit crackdown is a Wall Street nightmare 13 Jun 2019 U.S. Senator Marco Rubio wants to force mainland companies listed on American exchanges to submit to local oversight - or leave. The problem is real. But torching shares with a market value of roughly $1.8 trln and millions in fees is a heavy price to pay for transparency.
Dassault’s drug data wager relies on heady growth 12 Jun 2019 The French software group is buying U.S. peer Medidata for $5.8 bln. The deal boosts Dassault’s exposure to the hot trend of using big data to develop and test drugs. But likely modest synergies and the rich price mean investors will have to wait years for the deal to pay off.
Credit Suisse gets closer to real Alibaba trophy 12 Jun 2019 The tech giant has picked the Swiss bank, along with part-owned CICC, to lead a $20 bln Hong Kong share sale. Both have largely stayed clear of Alibaba rivals, suggesting loyalty is being rewarded. They are now positioned to contest a bigger prize: $150 bln Ant Financial’s IPO.
Jeff Bezos adds fasting to meal-delivery menu 11 Jun 2019 He’s closing Amazon Restaurants after it failed to get much business. That leaves the likes of Grubhub, Uber and DoorDash trying to dominate a capital-hungry market with ever decreasing margins. Leaving them at the table looks like the smart move.
Foxconn leaves room for governance improvement 11 Jun 2019 Taiwan's $32 bln iPhone assembler has missed an opportunity with its first investor day. A management rejig is encouraging, but stops short of a succession plan. Worse, it fails to clarify departing boss Terry Gou’s future role. Shareholders will be left only a little wiser.
Tech can help uncover the basics of basic income 10 Jun 2019 Seed-capital guru Y Combinator is the latest to study the pros and cons of giving people a guaranteed monthly stipend. Its project is bigger, longer and less restrictive than the Finnish state’s or the U.S. city of Stockton’s. The higher standard should yield more useful results.
Salesforce visualizes M&A benefits, market doesn’t 10 Jun 2019 The $125 bln software firm is paying $15 bln for Tableau. Founder Marc Benioff says the combination will allow sales reps to see data better, and that makes sense. Wall Street, though, is looking askance at a premium price that comes in at 11 times Tableau’s forecast revenue.
Review: Rockonomics nicely reflects the real world 7 Jun 2019 Alan Krueger’s posthumous work on the finances of rock and roll functions in equal parts as a basic industry primer, a textbook on broader economic concepts and a guidebook for musicians wanting to start a band. It’s also a window, if an imperfect one, into the author’s soul.
Facebook coin may aid crypto-rivals more than self 6 Jun 2019 Mark Zuckerberg’s social network could launch its own digital currency as a way into global payments, but it faces daunting trust and regulatory issues. Still, if some of its 2.4 bln users get hooked, that would boost the likes of bitcoin as well as blockchain technology overall.
Cloud stocks have drifted too high 6 Jun 2019 Software as a service deserves some of its hype. But high valuations for companies like Veeva and Shopify can make missteps into disasters. Look at the plunging share prices of Cloudera and Pivotal. It doesn’t help that scrutiny of big tech has dulled the prospect of M&A exits.
Uber analysts ride dreams to common destination 4 Jun 2019 They expect the $70 bln ride-hailing app to lose money for years but see various grounds for optimism, from cross-platform synergies to flying cars to demographics. Yet most roads lead to a forecast price upside of around 25%. It’s Wall Street’s form of herd immunity.
U.S.-PRC tensions upend tech funding supply chain 4 Jun 2019 American venture capitalists pumped a record $19 bln into Chinese startups in 2018 while flows the other way reached a high of $3.6 bln. Tougher foreign-investment rules and rising nationalism are set to add friction to capital movement, creating new winners and losers.
Google and Amazon are the antitrust appetizer 3 Jun 2019 U.S. regulators may be divvying up oversight of the tech giants, paving the way for potential investigations. Facebook ought to worry too. The social network creates less overt competition risk, but the experience of vetting Google and Amazon could guide tougher fights.
U.S. food-delivery rivals risk capital destruction 30 May 2019 Using the internet to turn people’s laziness and hunger into a business sounds like a sure win for Silicon Valley. Uber, Grubhub, DoorDash and others are feasting on meal-delivery cravings. But sector valuations may overstate the market opportunity, at least in the United States.
Huawei’s EU friends will stay on the line for now 30 May 2019 BT and Vodafone paused sales of some of the Chinese group’s phones after America put it on a blacklist. Yet Huawei equipment still pervades European telecom networks. Ripping it out now would be costly and disruptive. Better to wait and see whether the U.S. pressure persists.
Uber and Lyft create Asian valuation conundrum 30 May 2019 U.S. ride-hailing exuberance faded into lacklustre market debuts. At the same time, Singapore’s $14 bln Grab, for example, recently raised capital privately at 7 times expected revenue, compared to Uber’s 5 times. Fast-growing payment units can only justify some of the gap.
U.S. watchdog should throw down Facebook gauntlet 29 May 2019 The FTC is working with the social network on a settlement for failing to protect user data, including a mooted fine of up to $5 bln. A lawsuit against Mark Zuckerberg’s firm might be a better option. It’s risky, but it could grab Facebook’s attention and change its behavior.
Hadas: Facebook could fall into a new-money trap 29 May 2019 The social network could muscle into the fast-growing but competitive payments business. But founder Mark Zuckerberg appears to want to start a new currency. That’s crazy. A company with data-control issues is more likely to fall apart than break the government-bank money nexus.
Payments bonanza has spoils even for latecomers 28 May 2019 Global Payments’ $22 bln merger with Total System Services is the sector’s third big deal this year. What it lacks in first-mover advantage it makes up for with sensible terms – the premium is less than FIS is giving Worldpay. Missing consolidation would have been a worse fate.
Alibaba’s cracks show by revisiting Hong Kong 28 May 2019 The $400 bln e-commerce company plans to raise up to $20 bln from a second listing, five years after its New York IPO. Investors closer to home may give Alibaba a richer valuation. But seeking fresh capital alongside younger rivals also suggests its dominance is under threat.