Vodafone intruder adds hope to activist toolbox 31 Jan 2022 Shareholder Cevian Capital lacks obvious levers to boost the 36 bln pound telco’s performance. Consolidation in markets like Spain, Italy and the UK would lower costs and improve pricing. But success depends on competition watchdogs dropping their opposition to fewer operators.
Breakdown: Real profit and loss in the metaverse 28 Jan 2022 Mark Zuckerberg is on the case, and nascent virtual spaces like Decentraland could be the next social-networking hit. Breakingviews unpacks the metaverse, what it offers users and investors, and the risks.
Apple supply shortages are a good problem to have 27 Jan 2022 Tech investors fear the pandemic pulled forward demand, especially for cloud-based companies. The $2.6 trln Apple has the opposite issue. Covid-fueled supply-chain woes have prevented it from satiating iPhone demand. Customer loyalty probably means these sales will come later.
Capital Calls: Blackstone, German chips, Guy Hands 27 Jan 2022 Concise views on global finance: The $140 bln group braces for falling asset values and rising interest rates; Berlin sends the wrong signal by ignoring a 4.4 bln euro offer for wafer maker Siltronic; Britain seeks to reverse the financier’s lucrative 1996 housing deal.
Korean retail investors prefer their value trap 27 Jan 2022 LG Chem and SK are spinning off prize units, hoping to shrink their conglomerate discounts. They have met heavy resistance from individual shareholders panicked about dilution. Buybacks and dividends would be more persuasive than jargon about unlocking value.
Microsoft’s scale and M&A invite scrutiny 25 Jan 2022 The $2.2 trln software giant's quarterly sales jumped 20% last quarter. Boss Satya Nadella has outperformed many Big Tech peers of late. After last week's deal to buy Activision for $69 bln, Microsoft's uncanny ability to avoid regulators' crosshairs may be running out.
Italy telco deal would open European floodgates 25 Jan 2022 Vodafone and Iliad may merge their Italian units, cutting the number of operators in the country to three. EU competition boss Margrethe Vestager has less scope than previously to scupper such a tieup. Copycat consolidation in Germany, Spain, France and Britain could follow.
Capital Calls: GE’s Larry Culp learns to say “no” 25 Jan 2022 Concise views on global finance: It will be a while before the industrial conglomerate’s markets normalize, and its planned breakup takes place. In the meantime GE is trying to cut costs and be more selective. That means less revenue, at least at first.
Review: Venture capital is a victim of own success 21 Jan 2022 Sebastian Mallaby’s “The Power Law” traces the $1.8 trln industry’s history back to the 1950s. Early investors’ triumphs invited imitators, making capital into a commodity and empowering cocksure startup founders. The lesson is that VCs’ influence over companies may have peaked.
ByteDance’s lukewarm 2021 presages a bleak 2022 21 Jan 2022 TikTok’s owner grew annual sales 70% to $58 bln. That’s slower than the previous year and is mostly from its home market. An advertising slowdown will further bite, while China’s crackdowns in education and video games have foiled nascent bets. Finding new growth will be hard.
Alibaba’s U.S. cloud probe has big silver lining 19 Jan 2022 Washington is examining whether the $350 bln Chinese e-commerce giant’s data-storage business poses a risk to national security. That could hobble the unit’s global ambitions. But shareholders, at least, have little to worry about yet: They already ascribe almost no value to it.
Sony brings a knife to global video-games gunfight 19 Jan 2022 Investors erased 10% of its market value after Microsoft's $69 bln swoop for Activision. The Japanese group may lose access to some content but that looks manageable for now. The bigger worry is that Sony is no match against its far-larger rival as gamers look beyond consoles.
Microsoft’s Activision deal has on virtual goggles 18 Jan 2022 The software giant is paying $69 bln for the gaming firm, a 45% premium, though less than Activision’s value a year ago. It’s a good fit and gives Activision shareholders a way to cash out. But it is likely to catch the eyes of watchdogs, who have mostly let Microsoft skate by.
Capital Calls: Dan Loeb’s gadfly circles again 18 Jan 2022 Concise views on global finance: The U.S. activist’s activists up the ante with call for independent director.
The Exchange: Xpeng boldly goes 18 Jan 2022 The Chinese electric-car maker has navigated everything from shrinking subsidies to Covid-19. Embracing new ways of working is critical, President Brian Gu tells Katrina Hamlin. Future forays into Europe, the metaverse and flying cars will test the Tesla rival’s resilience again.
Covid-19 victory lap leaves Beijing exhausted 14 Jan 2022 China gloated over its pandemic control and took advantage of economic stability to launch risky crackdowns on tech and property. Now mini-outbreaks are prompting fresh lockdowns as an export boom looks set to slow. In 2022, malaise could prove harder to manage than disease.
Taiwan’s TSMC is wisely cashing in more chips 13 Jan 2022 The $620 bln top chipmaker is hiking prices in response to the global shortage, giving up some of its relative restraint versus competitors. Coupled with voracious demand from the likes of Apple, the increase will pad profits even as it ramps up spending to maintain its huge tech lead.
Turo IPO falls short of being Airbnb for autos 12 Jan 2022 The car-sharing startup backed by Barry Diller’s IAC has filed to go public. If it can keep growing as an intermediary like Airbnb, it could be worth $7 bln. The risk is it ends up with heavier cost burdens like Uber - or even Hertz, which would peg its worth below $2 bln.
Philips crisis breathes new life into breakup case 12 Jan 2022 The health-technology group has lost 20 bln euros of value since April due to supply snags and possibly carcinogenic ventilators. Even after recent disposals, CEO Frans van Houten has a vast, toothbrushes-to-CT-scanners stable of gadgets. The variety is getting harder to justify.
Digital ad hogs leave room at the trough 11 Jan 2022 Google and Facebook dominate U.S. online advertising, but the overall pie is growing quickly. Even if the twin giants take their usual share, that leaves an additional $50 bln up for grabs, Breakingviews estimates. That’s an opportunity for the likes of Snap and Microsoft.