Starbucks’ union brouhaha risks Schultz’s legacy 14 Mar 2023 Employees have organized and U.S. courts found that the $115 bln latte maker broke labor laws. But operating costs may go up by just $23 mln, or 0.2%, as a result of the current unions. What’s more at risk is Howard Schultz’s legacy and the company’s worker-friendly reputation.
Startup CEOs learn a lesson in counterparty risk 13 Mar 2023 The venture-backed firms that used Silicon Valley Bank tended to keep large, uninsured piles of cash there. That helped them access credit and other services but concentration was risky. The bank’s failure will bring change – with diversification in banks and in investments.
Bank rescue buys stability at a high price 12 Mar 2023 Authorities have swooped in to back depositors of the failed Silicon Valley Bank – even those not guaranteed their money back – and open the spigots for other lenders short of cash. That stops the immediate risk of bank runs. But the underlying regulatory failure is clear.
Capital Calls: SVB found old concentration risk 10 Mar 2023 Concise views on global finance: The busted bank counted half of all U.S. venture capital-backed startups as clients. As with financiers to oil barons in the 1980s, monomaniacal focus on a booming industry is a way to court disaster.
Swiss red carpet for China stocks rolls downhill 9 Mar 2023 Easier rules have made Switzerland a popular destination for mainland firms selling shares abroad. With battery giant CATL mulling a $5 bln Zurich offering, other European bourses will be eager to join in. Yet the long-term benefits of luring secondary Chinese listings are hazy.
Capital Calls: L&G/UK insurers 8 Mar 2023 Concise views on global finance: The $19 bln group led by Nigel Wilson is expanding rapidly overseas, which should help its depressed valuation.
China targets disruption-free tech disruption 8 Mar 2023 Beijing wants to foster innovation amid US sanctions by centralising how data, patents and more are governed. The shake-up will, among other fixes, help avoid agency turf wars and resource misallocation. Achieving tech self-sufficiency via regulation, though, looks a stretch.
Make-in-India dials up a tycoon premium 6 Mar 2023 Foxconn is leading a charge by foreigners to team up with local giants including Tata and Vedanta. Such partners can help cut red tape and tap subsidies, freeing up incoming manufacturers to focus on boosting production quality. For now, it is a win-win for those scaling up fast.
Venture capitalists swap Paris Hilton for Al Gore 3 Mar 2023 Rising rates and falling valuations have forced startup investors to move beyond reality stars and cryptocurrencies. Chatter at a Los Angeles confab suggests more useful ideas like green energy and healthcare are getting more attention. Tight funding demands sober analysis.
Capital Calls: Blacklisting China 3 Mar 2023 Concise views on global finance: Another 28 Chinese firms were blacklisted by the United States, making it harder for them to buy US goods. As security officials warn of TikTok’s massive reach, personal data should count as an American export, too.
There’s hope beyond moaning for European telcos 3 Mar 2023 Orange and Deutsche Telekom asked for US Big Tech to pay for a “fair share” of network investment at the sector’s annual Barcelona bunfight. Even if it helps, it won’t be a quick fix. At least there’s hope the EU will allow more mergers, and new technology could help cut costs.
Fintech darling Stripe has first-world problems 2 Mar 2023 The payment startup is raising new cash at a valuation roughly half its previous worth of $95 billion. A solid business model and rapid growth allowed Stripe to stay private. But slowing revenue and the need to retain employees have forced it to acknowledge financial gravity.
Tesla prepares for its next production hell 2 Mar 2023 Boss Elon Musk addressed “anyone who is an investor in Earth” at a rambling event, but there was no unveiling of a much-hyped $25,000 car. New cost-cutting goals imply the cheaper vehicle may deliver healthy 20% gross margins. Whenever it comes, though, it will be a tough drive.
Alphabet’s AI response is make-or-break-it 1 Mar 2023 Microsoft’s chatbot likened a journalist to Hitler and spews falsehoods. But a bigger threat is to the Google owner. Given time and improvements, artificial intelligence could cannibalize three-quarters of the search market. Failing to catch up would pose an existential threat.
Overlong arms of law grip chipmakers and Disney 28 Feb 2023 Joe Biden is attaching childcare and profit-sharing strings to $39 bln of U.S. funding for semiconductor companies. Meanwhile, Florida’s governor has taken new power over Magic Kingdom theme parks. The mission creep in both cases sets unpleasant precedents for corporate America.
Court dunk changes game for digital collectibles 28 Feb 2023 U.S. regulators didn’t say whether non-fungible tokens are financial securities before the $40 bln market swelled. Now it’s up to the courts. A judge’s ruling against fantasy basketball card developer Dapper Labs raises big risks for NFT companies. But there’s still no referee.
Capital Calls: Monte dei Paschi, Abrdn 28 Feb 2023 Concise views on global finance: Insurer AXA is selling shares in the Italian bank just four months after joining a risky capital increase; meanwhile, the UK asset management group run by Stephen Bird is still shrinking.
Airtel would be a complex saviour for Paytm 28 Feb 2023 Any investment from telecoms magnate Sunil Bharti Mittal would be a timely sign of confidence in the loss-making fintech darling as its big Chinese investors exit. Tycoons and banks are not happy bedfellows in India Inc, but deal talk at least shifts the debate to Paytm’s value.
Open-source software braces for trade war 27 Feb 2023 Sharing code that runs databases, phones and more benefits the world economy. But mutual walls are going up: ChatGPT is blocked in China while the White House has cut off Huawei from Android. Many Chinese and U.S. software projects are intertwined. They might also be doomed.
Politicians could do better with FTX donations 24 Feb 2023 Recipients of cash from Bernie Madoff and Allen Stanford had to hand it back. In Madoff’s case some $14 billion was recouped. The people overseeing the FTX bankruptcy vow to go after politicians. In a perfect world, lawmakers would voluntarily give money back.