Amazon’s space dreams deserve to be grounded 16 Oct 2023 The tech giant's $10 bln internet-in-the-sky venture is years late and thousands of satellites short in rivaling SpaceX. It may appeal to founder Jeff Bezos and his rocket-maker Blue Origin. But Amazon risks a costly rerun of prior telecom booms that led to painful busts.
Capital Calls: Covid exits earnings with a bump 12 Oct 2023 Concise views on global finance: Pandemic beneficiaries Domino’s Pizza and Walgreens are delivering fewer vaccines and pizzas, while Delta Air Lines had record revenue. After three and a half years, an infectious trade has run its course.
One $16 bln deal travels lonely dual track 9 Oct 2023 Buyout shops GTCR and Apax may be exploring both a sale and an IPO for insurance broker AssuredPartners. Using two separate paths typically aims to create competitive tension and lift valuations. With equity, debt and M&A markets all cool, neither option poses a plausible threat.
Apple may be poisoned by Google antitrust fallout 27 Sep 2023 Founder Steve Jobs once threatened “thermonuclear war” against his rival for copying the iPhone. Now, more than 15% of Apple's operating profit might be coming from fees paid by the search giant. The big risk is that an unfavorable verdict will taint its rich valuation multiple.
Capital Calls: Net neutrality is back, again 26 Sep 2023 Concise views on global finance: US regulators want to reopen a decade-old fight over the internet’s rules of the road. But just like merger cops who have struggled to gain traction, they are trying to use yesterday’s tools to predict tomorrow’s problems.
John Malone wields hammer over media coffin 6 Sep 2023 A dispute has cut Charter’s cable viewers off from Disney content. Charter backer Malone is betting traditional TV is fading, risking $17 bln of rich fees for Disney. Forcing a showdown makes sense. It’s hard to see why distributors should subsidize the pivot to streaming.
Telecom Italia debt legacy outlasts its initiator 22 Aug 2023 Two decades after the Italian telco’s landmark leveraged takeover its architect, Roberto Colaninno, has passed away. His bold acquisition ended up saddling the ex-monopolist with a huge debt pile. A KKR-led deal, blessed by Rome, may finally end the sorry saga.
Mastercard’s African fintech bet is VC, but better 15 Aug 2023 Mastercard is investing in telecoms company MTN Group’s $5.2 bln mobile payments unit after backing an Airtel Africa-owned rival. The price is higher than past deals. But historical underinvestment in African fintech helps, as does its ability to spread money around.
Capital Calls: Italian bank levy flip-flop 9 Aug 2023 Concise views on global finance: Rome has only partially soothed investors panicking over its windfall tax on lenders.
Altice’s beaten-up debt is only a bet for the bold 8 Aug 2023 Patrick Drahi’s telco empire faces a funding crunch, with $60 bln of debt coming due by 2030. He must pull off a tough turnaround in France and sell assets, a tricky task made even harder by a corruption probe. Even with current high yields, Altice debt is a risky punt on Drahi.
Capital Calls: Dish and EchoStar 8 Aug 2023 Concise views on global finance: Billionaire Charlie Ergen is reuniting the two satellite businesses he controls, beefing up the $4.5 billion Dish Network’s strained balance sheet as it tries to expand its wireless strategy.
Dish Network enters dangerous financial orbit 31 Jul 2023 Charlie Ergen’s satellite operator is among the many companies to scrape by on low interest rates. It borrowed heavily to bet on wireless spectrum. With $5 bln of debt maturing soon, higher borrowing costs and pay-TV cash flow ebbing, it now faces a predicament others will, too.
Capital Calls: Sequoia, Heineken, Moneyball 31 Jul 2023 Concise views on global finance: The venture capital firm issues a refund to cryptocurrency investors; the $57 bln brewer slashes its operating profit outlook; Steve Cohen’s New York Mets baseball team and its whopping $364 mln payroll is a mess, but in sports beta is the alpha.
Verizon’s frequency ducks rivals’ interference 25 Jul 2023 The $144 bln telecom giant unexpectedly added a lucrative set of subscribers this quarter. Focus on areas less pressured by rising cable rivals shines through fierce competitive intensity. That makes its coveted dividend safer than competitor AT&T's.
Capital Calls: European earnings 20 Jul 2023 Concise views on global finance: Consumer-facing companies Electrolux, Essity and HelloFresh all plunged after weaker-than-expected financial reports.
AT&T is another corporate elder aging ungracefully 19 Jul 2023 The telecom’s stock hit 30-year lows over liability fears from decades-old lead-lined cables. As with J&J now or oil giants tomorrow, over-the-hill corporate titans have the time to accumulate opaque environmental and legal liabilities that are often ignored, until they can’t be.
Capital Calls: Cathay, Telecoms kit makers, Byju’s 14 Jul 2023 Concise views on global finance: The Hong Kong carrier expects to turn a profit; a push into 5G has caught European telecoms gear makers like Nokia and Ericsson short; India’s troubled ed-tech giant appoints a top former banker to a newly formed advisory council.
History is against UK and Spanish telecoms M&A 12 Jul 2023 Vodafone and Orange have deals worth $40 bln on antitrust agencies’ desks. Europe has only once approved a similar merger without competitive remedies, which involved a tiny Dutch player. The telcos may have to make big concessions, undermining their tie-ups, or accept defeat.
BT’s vacant CEO job will only appeal to masochists 10 Jul 2023 Less than two months after releasing a turnaround plan that failed to convince investors, boss Philip Jansen said he will leave. There are no clear alternatives to his strategy of laying fibre broadband and cutting costs. Tricky shareholders will only add to the new broom’s pain.
Capital Calls: Eli Lilly gorges on obesity options 27 Jun 2023 Concise views on global finance: The drugmaker found patients losing an incredible 24% of their weight on one of its latest treatments. First-movers don’t always win out in pharma, however, as Pfizer proved with Lipitor. That’s why Lilly is wise to keep investing in alternatives.