Amazon cloud, shipping power puts rivals in shade 30 Jan 2020 Jeff Bezos’s e-tailing giant spent heavily last quarter to fend off Microsoft’s surge in cloud computing and retail rivals with faster shipping. It paid off with rapid growth, a fat bottom line and a return to the trillion-dollar club. That should spur Bezos to invest yet more.
Mario Kart puts Nintendo on track to mobile riches 30 Jan 2020 Smartphone hits including one featuring the Japanese company’s iconic plumber racing on wheels accounted for just 3% of its $5 bln in quarterly sales. That may soon change, as Nintendo charges for subscriptions and in-game prizes. Steady mobile profit and a valuation boost await.
Facebook’s user black box is cause for concern 29 Jan 2020 Investors may be punishing Mark Zuckerberg’s $636 bln social network for rising costs and slower sales last quarter, even though it had flagged them and beat estimates. A bigger issue is that Facebook is lumping WhatsApp and Instagram into user metrics. It should aim for clarity.
AT&T answers cash call, with caveats 29 Jan 2020 Boss Randall Stephenson is making good on goals by reducing debt, halting M&A, selling assets and raising the dividend. But the $280 bln telecom firm’s use of preferred shares is another form of leverage. Directing $30 bln of precious cash to buybacks is an idea worth ditching.
Apple investors cook up complacent valuation 28 Jan 2020 The $1.4 trln tech giant consistently squeezes more juice out of a mature smartphone market. Its price-to-earnings ratio has nearly doubled in a year, closing on Facebook and Alphabet. In part that’s overdue, but Apple is also the most exposed to risks in China.
UK’s Huawei call is anti-Trump parting gift to EU 28 Jan 2020 Britain has granted the Chinese telecom-kit maker a limited role in 5G networks. The U.S. president, who had pushed for a ban, will be as miffed as mobile operators will be relieved. On the eve of Brexit, London has also shown Europe how to balance Washington and Beijing.
Elliott’s friendly tech bet faces tough second act 28 Jan 2020 Shares in SAP are up 19% since the activist unveiled a stake. Investors seem to believe the $160 billion company will hit ambitious targets endorsed by Paul Singer’s fund. But tough competition and increasingly muddy governance mean there is limited scope for further quick wins.
Capgemini victory over Elliott comes with baggage 27 Jan 2020 The French IT group won a $4.1 bln bid to take control of Altran, which the New York activist tried to veto. The victory is a coup for CEO Paul Hermelin, who steps down in May. But Elliott can block a full takeover. That presents an integration headache for successor Aiman Ezzat.
China puts Washington into awkward M&A role 24 Jan 2020 The government faces the temptation to broker new tie-ups to mitigate the blacklisting of telco Huawei, and unwinding of China-related mergers. True, Beijing-bashing could inspire other deals: think Cisco buying Nokia. But Washington is better as an onlooker than a matchmaker.
Review: Trapped inside Big Tech’s “Uncanny Valley” 24 Jan 2020 Anna Wiener slams the industry’s godlike power in her new memoir about Silicon Valley’s recent gold rush. But the book mirrors what it mocks, largely reducing people to their social media posts or buying habits. It shows how impossible it is to escape the Bay Area’s long shadow.
Ericsson gives glimpse of pain from 5G squeeze 24 Jan 2020 An earnings hit from a U.S. mega-merger is only one headache for the $28 bln Swedish telecoms firm. Britain appears to be throwing a lifeline to Chinese rival Huawei. And mobile operators are pushing hard to break the pair’s grip over the $500 bln market for next-generation kit.
Wuhan virus will shape China’s smart city vision 24 Jan 2020 The metropolis of 11 mln is under quarantine. Big investments in healthcare, AI and even surveillance led by the $50 bln Hikvision and other giants could help curb future contagion risk. That might compensate for less tractable problems: human error and institutional weakness.
Hong Kong homecoming bets are only half a whim 24 Jan 2020 Trip and Baidu are mulling secondary listings in the Asian hub, following in the footsteps of Alibaba. Early evidence suggests that could boost valuations. For now, it’s more convincingly a hedge against any politically-driven crackdown on Chinese companies listed in New York.
U.S.-France digital tax truce could easily unravel 23 Jan 2020 Treasury Secretary Steven Mnuchin is no longer demanding that any global Big Tech levy be optional, while Paris will delay collecting payments from groups like Google. That was the easy part. Even basics, such as how much to charge such companies, will be harder to hammer out.
Flying cars are a cool solution to a tiny problem 23 Jan 2020 Toyota has pledged $394 mln to support aviation startup Joby; Geely and Hyundai are also dabbling. Technology advances have put commercialisation within reach, and regulators will slowly come to grips with the idea. The final frontier is finding actual customers.
Naspers rejig only nibbles at Tencent discount 22 Jan 2020 The African tech group has sold $1.7 bln of shares in its Amsterdam spinoff Prosus, whose main asset is a $150 bln stake in the Chinese web giant. Using the funds to buy back stock has merit, but Naspers will have to be bolder if it wants to close the Dutch firm’s valuation gap.
Netflix investors risk ruing streaming-stock binge 21 Jan 2020 Reed Hastings’ firm has little if any need for TV ratings, box-office sales or ads, unlike rivals. Shareholders focus on subscriber and revenue growth, fueling its stock-market success. But a slowdown in new users and an excessive, if declining, cash burn put that under threat.
Democratizing U.S. data access has drawbacks 21 Jan 2020 Plans to change how journalists handle some releases, including the crucial jobs report, aim to ensure traders and the public get them at the same time. But markets may become jumpier. And those with big bucks will still contrive to get the data a few microseconds sooner.
Telco IPO is only one way to paint Africa Orange 21 Jan 2020 The French group may float its local unit, which could be worth nearly 13 bln euros. That’ll raise plenty of cash to enter Ethiopia but isn’t CEO Stephane Richard’s only option. A mobile-tower sale would achieve the same aim, and deliver a bigger valuation boost for the parent.
BAE’s U.S. pivot can help defuse Saudi discount 20 Jan 2020 The $27 bln UK defence firm has bought satellite navigation and radio businesses from merger partners Raytheon and United Technologies. The $2.2 bln price looks fair. Greater sales in America, and a lesser reliance on Riyadh, should boost the Typhoon-maker’s depressed stock.