China EV champs race to make leaner green machines 8 Nov 2023 Nio is ditching 10% of its staff. Rivals won’t be far behind. While electric-car startups in the People’s Republic have proven their tech can keep pace with Tesla, their losses have been rising, in part due to a persistent price war. That makes cutting costs the next big test.
Alphabet feigns to be underdog in cloud game 3 Nov 2023 The $1.6 trln tech giant invested in AI startup Anthropic. Its outlay will come back to the Google parent in payments for cloud computing. CEO Pichai is giving companies an alternative to Microsoft and Amazon. Competition is good, but would be better if it wasn’t among Big Tech.
Capital Calls: CVC, Grocer wars, Atos 2 Nov 2023 Concise views on global finance: The European buyout group has postponed its plans to list in Amsterdam; British supermarket Sainsbury’s is thriving, which is bad news for rivals like CD&R-owned Morrisons; French IT firm Onepoint has grabbed a 10% stake in ailing peer Atos.
Broadcom can brave China’s sword of Damocles 31 Oct 2023 The chipmaker expects to seal its strategically shaky VMware deal as Beijing’s blessing pends amid escalating geopolitical tension. In 17 months of waiting, however, its rising shares have lifted the purchase price by 16%, to $80 bln. Boss Hock Tan is better off taking the blade.
Biden AI plan is one step in avoiding crypto trap 30 Oct 2023 The president’s new executive order aims to set regulatory guardrails for artificial intelligence. It still leaves a big hole for Congress to fill. Failing to set coherent rules risks the kind of piecemeal enforcement that hobbled crypto, but for a technology with higher stakes.
Capital Calls: Big Oil, Intel 27 Oct 2023 Concise views on global finance: Exxon returned $8 bln of cash to investors in the quarter, while Chevron returned some $6 bln. With investment rising and M&A on the table, investors are competing with new priorities; Intel shares jumped 10% after slowing declines in revenue.
Worldline crash is pivotal moment for payments 25 Oct 2023 The $7 bln French group’s shares fell 60% after it said sales would be hit by a call to ditch riskier merchants. Investors expect payment providers to be on top of flaky transactions. The fact that a leading player has had to rethink will scare them, and alert regulators.
Alphabet’s present looks brighter than its future 24 Oct 2023 Revenue at the Google parent rose more than 10% for the first time since mid-2022 because of a recovery in online advertising, its bread-and-butter. But a stumble in its fast-growing cloud computing unit suggests it will be tough for Alphabet to catch up with weightier rivals.
US tech controls help and hinder China chipmakers 20 Oct 2023 Washington’s latest restrictions aim to curb Chinese access to semiconductors for AI and warfare. Beijing is years away from replicating sophisticated components and tools like those made by ASML. But the rules create opportunities for local champions such as $30 bln SMIC.
European payments LBO would be rewarding but messy 18 Oct 2023 CVC may bid for Milan-listed Nexi, Bloomberg reported. A $16 bln buyout could earn handsome returns, even if the group just performs as analysts expect. But Nexi’s private-equity shareholders like Hellman & Friedman know this, forcing buyers to either cough up or bring them in.
Capital Calls: BlackRock, Dollar General 13 Oct 2023 Concise views on global finance: Boss Larry Fink squares off with Uncle Sam; Dollar General bets on its ex-boss’s old magic.
‘Tomb Raider’ maker’s odyssey charts gaming pains 12 Oct 2023 Embracer’s share price is back at 2018 levels, when it stepped up an M&A spree that saw it become Europe’s largest video game group. The $2.5 bln Swedish firm has slipped on its own banana skins. But its decline also shines a light on the sector’s post-pandemic struggles.
AI may force IT spending into economic decoupling 11 Oct 2023 If companies want to gain from artificial intelligence, they’ll have to spend big on IT. Clients are holding back for now as global growth slows but valuations of tech giants like Accenture and Tata Consultancy suggest clients will loosen purse strings sooner rather than later.
Israel’s robust economy faces a major stress test 10 Oct 2023 The Middle East state’s thriving tech sector and strong institutions have helped it weather past security crises. Its latest one is much bigger, though. One key indicator will be whether foreign capital can retain its recent enthusiasm for investing in the $500 bln economy.
Intel’s latest breakup is a test for more to come 4 Oct 2023 The semiconductor giant will hive off more of its empire with IPO plans for its programmable chip unit. Weak markets dinged its last spinoff, but this separation can flout strong profit to highlight $18 bln of hidden value. It’s a dry run for a bigger split down the road.
Siemens is case study in China de-risking dilemma 4 Oct 2023 The $110 bln conglomerate trades well below the sum of its parts. The normal fix would be to offload low-margin areas like its legacy railway division. But Siemens has a patchy record on M&A, and its growth story largely depends on China – from which it is obliged to de-risk.
Alibaba spinoff can deliver two recovery packages 4 Oct 2023 Logistics unit Cainiao’s name may mean “rookie”, but the group is profitable and weaning itself off dependence on its parent. A successful IPO valuing it at $10 bln or more would warm up Hong Kong’s market and show Alibaba’s overhaul is on track after CEO Daniel Zhang’s exit.
Capital Calls: Food prices, Brookfield, SPAC spin 3 Oct 2023 Concise views on global finance: The cost of ingredients for the average UK meal fell 0.1% in September; the Canadian giant’s $1 bln renewables deal reflects how European green assets are getting more appealing; Singapore’s SPAC puts a new spin on blank-cheque targets.
China’s electric cars reinvent the wheel for good 3 Oct 2023 The country’s automakers are overtaking legacy marques at home and abroad. In this Exchange podcast, industry consultant Tu Le explains what has given BYD, especially, the edge over rivals. He also makes the case for treating Elon Musk’s Tesla as a Chinese carmaker.
Fixing Intel ends with taking it apart 29 Sep 2023 The chip giant faces the existential challenge of regaining its lost lead in manufacturing. Doing so could double its $145 bln market value, but maintaining an edge requires ever more spending, fed by serving outside customers. The best way to do that: split Intel in two.