SoftBank’s Einstein pitch fails relativity test 6 Feb 2019 Masayoshi Son invoked the Nobel Prize winner’s theories to argue the Japanese group is worth $110 bln more. But adjust his sums for low liquidity and the possibility of squandered cash, and the black hole is small. Massive objects like the Vision Fund distort the laws of physics.
The Exchange: How Facebook takes away our humanity 5 Feb 2019 That’s the way early investor Roger McNamee describes what the social network – and Google – is doing without proper oversight. In discussing his book, “Zucked,” he explains why just changing Facebook management won’t solve its problems and why he remains hopeful of a solution.
Holding: Boards miss message about personal email 5 Feb 2019 Until recently, directors and officers could chat on individual accounts with near impunity. Now courts are forcing bosses at Uber, Facebook, Papa John's and elsewhere to cough up private and often incriminating texts. Think twice before sending that smiley-face emoticon.
Apple’s Austrian roadkill looks like an M&A target 5 Feb 2019 Chipmaker AMS is being squeezed by the U.S. tech giant, its biggest customer. A heavy debt pile and rising investment needs have scuppered its dividend. With shares down 70 pct in six months, investors’ best hope may be a sale to a fellow Apple supplier, like STM.
Software M&A makes LBO shops click on club deals 4 Feb 2019 A group led by Hellman & Friedman is paying more than 30 times EBITDA for its $11 bln buyout of Ultimate Software. Private equity is targeting the tech cloud. But such lofty valuations require big equity checks few can or want to write. That means teaming up, despite the risks.
Japanese carmakers can find trade-war refuges 4 Feb 2019 A stronger yen docked some $390 mln from Honda's revenue last quarter, adding to other blows. It's been tough to juggle a safe-haven domestic currency and growth that comes largely from overseas. Rival Mitsubishi's stellar results, built on emerging markets, show it can be done.
Review: The case for regulating Facebook 1 Feb 2019 Mark Zuckerberg’s social-media outfit has been caught pushing the data-privacy envelope again – by Apple. In his new book, “Zucked: Waking Up to the Facebook Catastrophe,” early adviser Roger McNamee lays out what went wrong – and how to tackle the dangers such companies present.
PlayStation glitch lights fire under Sony CEO 1 Feb 2019 The $64 bln electronics giant missed operating profit forecasts, as video-games sales disappointed and smartphones tanked. As cash-cow businesses slow, the heat is rising for Kenichiro Yoshida to deliver growth from music and movies - and ditch the unprofitable handsets unit.
KFC is finger lickin’ in a less appetising China 1 Feb 2019 Mainland appetite for fried chicken helped Yum China turn a fourth-quarter profit and pushed same-store sales up 2 pct, beating forecasts. It's still expanding fast too. That suggests a resilient bet on Chinese consumers: even as budgets tighten, cheap eats stay on the menu.
Singapore’s Grab tempts headquarters curse 1 Feb 2019 The ride-hailing app plans to occupy a newly designed $135 mln building, under an 11-year lease. From Myspace to Yahoo, lavish moves have been a bad omen. Grab has cash, but is young, unprofitable and in a fierce rivalry with Go-Jek. Tech optimism may have gone too far again.
Amazon and Walmart get caught in India’s web 1 Feb 2019 The U.S. titans will be limited to operating marketplaces and prevented from being online retailers under New Delhi’s rules. That opens the door for billionaire Mukesh Ambani to power ahead with his own e-commerce plans. The miscalculation by Amazon and Walmart could be costly.
Viewsroom: Why did PG&E file for bankruptcy? 31 Jan 2019 The California utility may face up to $30 bln in wildfire costs. But shareholders see value and lenders were willing to stump up cash. The board’s desire to cut other expenses may have driven the decision. Plus: How U.S. charges against Huawei may affect the telco industry.
Nokia valuation lacks Huawei boost 31 Jan 2019 Like Sweden’s Ericsson, the Finnish telecom-kit maker will gain if the Chinese rival is shut out of more markets. Yet Nokia’s valuation is lower than for much of last year and CEO Rajeev Suri expects a so-so 2019. A European ban on Huawei would change that.
Nintendo brushes up gaming skills for 2019 31 Jan 2019 The $36 bln Japanese video-games giant smashed quarterly earnings expectations thanks to new titles. Even after cutting its Switch console sales target, the maker of Super Mario hits looks on track to challenge rival Sony’s PS4. Nintendo’s beaten-down shares are due a boost.
Foxconn’s U.S. debacle offers an economics lesson 31 Jan 2019 The iPhone maker and Wisconsin taxpayers made a $10 bln bet on a manufacturing revival in the United States. Now Terry Gou's outfit says making flat screens there is uncompetitive, and jobs will be in research and design. It's a reality check for Donald Trump's industrial dream.
Microsoft floats above tech downdraft 30 Jan 2019 The software giant, at some $820 bln vying to be the most valuable company, racked up another quarter of strong growth and profit as more business moved to the cloud. The shift has years to go and could accelerate in a recession. Microsoft’s lesser regulatory worries are a bonus.
Alibaba powers on with small things 30 Jan 2019 Quarterly sales grew 41 pct, the weakest pace in three years. But there’s still momentum in Jack Ma’s retail juggernaut. China’s wider slowdown has been marked by tepid demand for big-ticket items like iPhones. Everyday purchases like groceries and apparel are propelling Alibaba.
Apple cash and services salve iPhone worries 29 Jan 2019 The tech giant’s holiday quarter was dismal, as warned. A 5 pct sales drop shows Tim Cook’s company can no longer expect to sell significantly more phones or jack up prices. But rising margins on services for iPhone users and hefty capital returns buys Apple time to refresh.
The Exchange: Joseph Tsai 29 Jan 2019 Alibaba’s co-founder and executive vice chairman joins Breakingviews to reveal what the future holds for the $400 billion tech giant. As investors fret over economic uncertainties, Tsai also tackles the recent fallout from Huawei, a bruising trade war and the case for tax cuts.
Europe’s telcos have 20 bln reasons to love Huawei 29 Jan 2019 Ditching the Chinese supplier could push up costs for the region’s carriers, and knock 7 pct off their market value. Politicians may deem that a price worth paying to ensure the security of mobile networks. Yet slow-growing, debt-heavy telcos hardly need another cash flow hit.