Marriott and Airbnb aren’t a tale of two cities 15 Feb 2022 The $56 bln hotel chain’s revenue hasn’t fully recovered to its pre-pandemic level but is expected to grow quickly to get there by next year. Meantime Airbnb’s best growth days may be behind it. Yet the $108 bln home-sharing app’s valuation is far higher. The two need to converge.
Intel’s Tower deal comes up strategically short 15 Feb 2022 The $200 bln chipmaker has many problems to solve. A $5.4 bln acquisition of an Israeli rival shows there are no easy answers. Tower brings key skills and industrial applications, but Intel’s tech still lags. And even tiny chip deals risk taking heaps of time and effort to close.
Tech investors ignore stock comp at their peril 15 Feb 2022 Companies like Uber adjust for awarded share grants in favorite figures that show increasing profitability. But unlike tech firms of yore that had sizable net incomes, like Facebook, stock compensation is a big part of those earnings. It’s a skewed representation of expenses.
Canada’s tech darling may be headed for a fall 14 Feb 2022 Shopify already fell off its perch as Canada’s most valuable listed company, but the e-commerce giant’s $105 bln valuation is still in the stratosphere, at over 100 times forecast EBITDA. With tech investors jittery, even a minor slipup could lead to a sizeable correction.
Zendesk’s best M&A strategy starts with failure 14 Feb 2022 The software firm’s unpopular $4 bln bid for SurveyMonkey’s parent has pushed down its stock, irked activists and provoked a $16 bln opportunistic private equity bid. Zendesk’s shareholders can still vote down its deal. Doing so might secure a higher price for their own shares.
Twitter share buyback is an odd way to take flight 10 Feb 2022 New CEO Parag Agrawal plans to repurchase $4 billion in stock. He will also spend more to improve tepid revenue growth. But tough competition and the $30 bln company’s slim slice of the ad market mean Agrawal could do with keeping more in the coffers to help him hit his targets.
Viewsroom: Spotify, Peloton and failed chip deals 10 Feb 2022 Neil Young’s podcast protests have shone a light on a potential flaw in Spotify’s business model, says Liam Proud. Peloton highlights the danger of giving company founders too much voting power, Rob Cyran argues. And semiconductor M&A gives global antitrust regulators agita.
Capital Calls: ABB’s car chargers, Airport M&A 10 Feb 2022 Concise views on global finance: The Swiss engineering group’s listing plans come at an unfortunate moment; Britain’s John Menzies takes a risk with rejection of “opportunistic” approach from Kuwaiti air services group NAS.
Disney closes gap with Netflix in value, not risk 9 Feb 2022 The Magic Kingdom’s streaming service Disney+ now has 130 mln subscribers, narrowing the gulf with its bigger rival. Investors value the two firms’ earnings on a similar multiple. Yet even though Netflix is now a smaller company by market value, it’s Disney that’s the greater gamble.
Uber looks like a tech stock in the worst ways 9 Feb 2022 The ride-hailing firm is expected to grow sales rapidly. But that isn’t coming easy – or cheap - and the valuation is now in line with Netflix. As investors decide to look more closely at the fundamentals of tech darlings, Uber has more troubling attributes than the good ones.
Facebook’s future rests on Reels, not metaverse 9 Feb 2022 Mark Zuckerberg’s iffy bet on virtual reality cost Meta Platforms $10 bln last year. But the $600 bln social network has gotten higher returns for investors by improving on ideas that already exist. The best way to stop its decline is to copy its biggest competitor TikTok.
Spending bitcoin is harder than stealing it 9 Feb 2022 Cryptocurrency crime is soaring. But the seizure by U.S. authorities of bitcoin worth $3.6 bln, six years after the theft, shows it’s difficult to turn stolen tokens into cash. Anonymous transactions leave a clear trail. Even if the boom fades, the pursuit of thieves will go on.
Dutch $64 bln payments star is cure for tech gloom 9 Feb 2022 Adyen’s stock surged 10% after its results showed accelerating revenue. Following the rout in shares like PayPal and Netflix, it’s a reminder that piggybacking on the digital economy is a good bet. The catch for investors is that the best firms still trade at crazy valuations.
Arm IPO marks sober end to SoftBank chip party 8 Feb 2022 Under pressure from competition authorities, Nvidia dropped its deal to buy the UK chip designer from Masayoshi Son’s group. Arm’s sensitive position makes a listing the only realistic option. But Son will probably need to accept a valuation below the $32 bln he paid in 2016.
SoftBank Alibaba problem is worth more than an Arm 8 Feb 2022 Weak earnings from the Japanese conglomerate were eclipsed by its failed sale of the chip designer. Floating it instead could yet work well, but it won’t ease boss Masayoshi Son’s bigger issue: his stake in the Chinese e-commerce titan, which is worth as much as his entire firm.
The Exchange: Margrethe Vestager 8 Feb 2022 Europe’s antitrust tsar is responsible for keeping U.S. digital behemoths in check and making sure that the bloc doesn’t slip too far behind on technology. She joined Liam Proud to talk about a string of recent court losses and the future of competition policy.
Capital Calls: Continental, Harley-Davidson 8 Feb 2022 Concise views on global finance: German car-parts maker Continental may spin off its self-driving unit, while the iconic maker of motorbikes has turned supply shortages to its own advantage.
Failed deals illuminate red lines for chip buys 8 Feb 2022 The regulatory foiling of UK-based Arm and Germany's Siltronic, foreign takeovers worth $45 bln on announcement, says more about scarce tech than the prospects for industry consolidation. Humdrum mergers remain a useful way for companies to ride out the global chip crisis.
Amazon could get Peloton at garage-sale price 7 Feb 2022 The workout firm’s shares surged after suggestions the $1.6 trln e-commerce giant may buy it. Peloton isn’t an obvious fit, but the ability to sell subscriptions to even a sliver of Amazon’s user base is valuable. With the right regime, Peloton’s value could conceivably double.
Facebook $250 bln slump punctures antitrust case 7 Feb 2022 That’s how much Mark Zuckerberg’s firm Meta Platforms lost in value after growth stalled. Competition from TikTok specifically is getting tough, but U.S. antitrust regulators who are fighting Facebook have said the Chinese-owned app isn’t a rival. The market begs to differ.