Capital Calls: Twitter snubs investors 27 May 2022 Concise views on global finance: The social media platform refused to accept the resignation of director Egon Durban, one more check for bad corporate governance. But it’s not like investors have held the company to a high standard.
Subdued Alibaba strikes fitting new tone 27 May 2022 New finance chief Toby Xu's focus on cost cuts and better-than-expected sales growth powered a 15% stock rally. The regulatory-thwacked e-commerce group is taking control where it can but exercising discipline on the bottom line in a slowing Chinese economy invites trouble too.
Review: War on digital payment fails to hit target 20 May 2022 Brett Scott’s “Cloudmoney” seeks to remind the world of the value of physical cash. It’s true that an overly automated system of money carries risks like the potential for surveillance. But the campaigner underestimates consumer demand for digital transactions.
Capital Calls: Stablecoin’s safety measures 19 May 2022 Concise views on global finance: As crypto assets wobble, Tether, with $75 bln worth of digital tokens in circulation pegged to the U.S. dollar, is boosting its reserves of cash and U.S. Treasury bills while shrinking its commercial paper holdings.
Klarna’s $46 bln price tag endures only in theory 19 May 2022 Investors heavily marked down the value of the Swedish startup’s buy-now-pay-later rivals like Affirm. On their sales multiples, privately held Klarna’s valuation would be cut by 75%. While the business is diversified with better funding, it still requires lots of red pen.
Stablecoin panics may be a feature not a bug 17 May 2022 Crypto tokens like Terra and $80 bln Tether were supposedly pegged to the dollar. Yet the former failed and the latter wobbled. Holding 100% cash reserves would help. But there’s no fun, or money, in that. Users can always flock to the new, sketchy coin offering juicy rewards.
Tech unicorns become zombies 13 May 2022 Companies like Peloton, Carvana and DraftKings hit up investors for cheap capital to bolster balance sheets over the past years. But they haven’t used the cash to sort out business models – and they continue to burn through it. They have varying cushion but may already be dead.
Xiaomi fight puts China Inc on India red alert 13 May 2022 The country’s tax and financial agencies have tried to block some $1.2 bln of the smartphone maker’s funds. New Delhi engaged Vodafone, Cairn and others in similar battles but its testy relations with Beijing up the ante. Xiaomi and Chinese peers in India face a slow decline.
Vodafone’s deal zeal is a risk factor 12 May 2022 The telecoms group may combine its UK business with smaller rival Three, owned by Hong Kong’s CK Hutchison. Its 39 bln pound debt pile makes a joint venture more likely than an outright purchase. CEO Nick Read’s eagerness to hook up means he may not secure the best deal possible.
SoftBank’s Son is running out of ammunition 12 May 2022 The stock market values the $60 bln technology conglomerate at half the sum of its parts. In the past, founder Masayoshi Son has used buybacks to prop up the shares. High leverage and slumping markets make that tricky. More radical measures, like a breakup, seem off the table.
Stablecoin crash drags crypto ideals back to earth 11 May 2022 TerraUSD, a digital token supposedly pegged to the U.S. dollar, slumped to a fraction of that. The popular store of value is vulnerable because its design is based on trading incentives, not hard reserves. For crypto fans there’s a tradeoff between decentralisation and stability.
Grindr’s SPAC profile picture is a blur 10 May 2022 The LGBTQ community’s favoured dating app is listing via a merger with a blank-cheque firm run by a major shareholder. The $2.1 bln price tag looks chunky next to peers like Bumble. Besides data security and governance, investors can fret about potential conflicts of interest.
Capital Calls: Turkey, Nintendo/Sony, India IPO 10 May 2022 Concise views on global finance: President Erdogan makes another ham-fisted monetary intervention; the Switch maker weathers supply chain ructions better than its larger rival; New Delhi needs to be even more generous in its landmark listing of Life Insurance Corp of India.
China’s private cloud giants sail into storm 10 May 2022 Alibaba and Tencent want to dominate the country's $35 bln data storage and services market. But cybersecurity hawks are pushing contracts toward state-backed firms. Trying to identify and back China's answer to Amazon Web Services may not turn out the way investors expect.
Didi’s New York woes mask deeper problems 4 May 2022 The Chinese ride-hailing group hopes leaving the Big Board will ease Beijing’s cybersecurity probe. It now faces a U.S. investigation into its IPO. Yet the bigger blow in its new annual report is rising regulatory pressure at home, raising fresh doubts about Didi’s core business.
China’s ZTE answers the call on Huawei’s crisis 3 May 2022 Fresh off five years of U.S. probation, the $16 bln telecom-equipment maker is growing sales and improving margins as American sanctions hurt its larger rival. An expanding 5G rollout leaves additional market share up for grabs. Its discounted valuation is poised to be dialed up.
Arm IPO bankers will struggle to tell growth story 29 Apr 2022 Owner SoftBank is picking advisers for what CEO Masayoshi Son calls the most significant float in the chip industry’s history. A boost from 5G phones and data-centre demand may lure growth-hungry investors. But that won’t be enough to justify a mooted $60 bln valuation.
NFTs are more opportunity than threat for Spotify 28 Apr 2022 Music streamers have cause to fear so-called non-fungible-token platforms, which enable artists to nab bigger royalties. Yet Spotify and its peers are where the fans are. If digital collectibles take off, streamers may be able to take a piece of the pie rather than being eaten.
Capital Calls: U.S. GDP fall masks solid economy 28 Apr 2022 Concise views on global finance: Consumer spending and business investment are resilient amid price hikes.
Capital Calls: GM electrifies executives’ pay 27 Apr 2022 Concise views on global finance: The Detroit automaker’s move to tie boss Mary Barra’s pay to electric vehicles goals is a new spin on pledges to shift away from combustion-engine cars.