Transportation

Uber-Lyft price-war truce will be temporary

8 August 2019

The ride-hailing firms say user fees are becoming more rational while passenger growth was steady. But, expenses are up. A record $5.2 bln quarterly loss and drags from freight and food delivery put Uber under more pressure. Cutting prices may be a tempting way to boost growth.

A year later, Tesla could use buyout-like focus

7 August 2019

CEO Elon Musk was upbraided for tweeting he had “funding secured” to take the carmaker private 12 months ago. Tesla now trades at barely half his mooted price, loses money and struggles to sustain growth. It’s no LBO candidate, but a dose of buyout discipline wouldn’t go amiss.

U.S. strength gives Fiat Chrysler an M&A breather

31 July 2019

The $21 billion Jeep maker is braving the car market downturn better than rivals. Record results in the key North American market produced better-than-expected operating profit. That gives boss Mike Manley headroom to cut costs while keeping an eye out for potential partners.

U.S. car-pollution pact cuts through D.C. smog

25 July 2019

California’s deal with BMW, Ford, Honda and VW shows the auto industry can cut U.S. emissions despite White House intransigence. The better match with overseas standards should aid progress and profitability. Add incentives to invest in electric vehicles and it’s a smart mix.

VW debt paints fairer picture than battered shares

25 July 2019

The carmaker’s valuation implies it will be worthless by the mid-2020s. Yet its 10-year bonds yield just 1.4%. Shareholders are panicked by the threat of tariffs, ride-sharing, and self-driving cars. But the disparity shows investor pessimism towards the auto sector is overdone.

If only James Bond could rescue Aston Martin

24 July 2019

The $2.2 bln maker of 007’s legendary sports car is struggling. With the auto industry’s future in flux, once-reliable buyers like VW or Ford are no longer in the business of collecting trophy assets. Barring the odd billionaire, Aston looks destined to continue skidding out.

Peugeot’s Tavares could use another deal

24 July 2019

The 20 bln euro French group’s CEO quickly turned around Opel Vauxhall, bought from GM in 2017. Now operating margins seem near their peak, and global car sales are stalling. Teaming up with Fiat Chrysler or Jaguar Land Rover would give the famous cost-cutter more fat to trim.

IndiGo row makes case for clipping founders’ wings

10 July 2019

The two top owners of India's largest and most profitable airline are at war over an old shareholder deal handing one of them outsize control. Now that the country has laid out strict rules for dual class shares and more, such pacts look like a relic of bad governance past.

Branson’s space deal defies financial gravity

9 July 2019

The bearded billionaire is selling half his cosmic travel group to former Facebook executive Chamath Palihapitiya’s blank-check vehicle. A $1.5 bln valuation looks rich given Virgin Galactic’s record of two test flights. Still, it needs cash, and Palihapitiya has too much of it.

Brookfield on slow train to infrastructure payback

1 July 2019

The investor and Singapore’s GIC are buying U.S. railroad group Genesee & Wyoming for about $6.4 bln. The return on total investment works out under 5%, partly reflecting the scarcity of transport assets. Brookfield at least has the portfolio and experience to squeeze out more.

San Francisco vaping ban shows warped agenda

28 June 2019

Juul Labs’ home is the first U.S. city to block its sales. Local agencies can’t use facial-recognition software. Meanwhile the area has a property-crime problem and human feces on its streets. The place boasting the highest density of billionaires is neglecting basic services.

FedEx gets caught in a trade-war vise

25 June 2019

The $41 bln parcel carrier is suing the U.S. government over onerous rules for exports, not least to China. Meanwhile, its own errors may land it on a Beijing blacklist. FedEx can handle a profit hit, but getting embroiled in a tariff fight would put it further behind rival UPS.

Greyhound activist gets few scraps from board coup

25 June 2019

Coast Capital failed in its move to revamp the board of FirstGroup, UK owner of the bus operator. True, Chairman Wolfhart Hauser won’t stand for re-election. But the board is mostly unchanged. And, having defeated one revolt, FirstGroup may take longer to break itself up.

KKR’s $3 bln rail float helps to clear IPO line

21 June 2019

UK website Trainline priced near the top of its range and popped 20% after listing in London. Its rapid growth and positive cash flow make an alluring combo, but investors also looked past risks including shifting UK rail policy. That bodes well for fellow IPO travellers.

Deutsche Bahn faces Corbyn haircut on UK rail exit

21 June 2019

The German train group is selling its Arriva unit for a mooted 3.5 bln euros. Its British buses and European networks justify the price, suggesting the UK rail franchise comes for free. It’s a fair call given opposition leader Jeremy Corbyn wants to end private ownership.

Ride-hailing misses the U.S. IPO bus

17 June 2019

Lyft and Uber are rare laggards among 2019 debutants. Plant-based burger maker Beyond Meat is the top performer, but others involve video chats, online retailing, cybersecurity, and plain old blue jeans. Investors see a bright future – except perhaps in the overhyped gig economy.

Gulf oil risk response looks too sanguine

13 June 2019

The price of Brent crude jumped 2.5% after attacks on two tankers near the critical Strait of Hormuz. The U.S. secretary of state blames Iran. With oil still barely above $60 a barrel, the market reaction to this tense situation looks mild. That puts a lot of faith in cool heads.

Uber analysts ride dreams to common destination

4 June 2019

They expect the $70 bln ride-hailing app to lose money for years but see various grounds for optimism, from cross-platform synergies to flying cars to demographics. Yet most roads lead to a forecast price upside of around 25%. It’s Wall Street’s form of herd immunity.

Fiat’s French appeasement game is means to an end

3 June 2019

Chairman John Elkann is mulling concessions to get the French state to greenlight the $35 bln Renault merger. A board seat for Paris and some cash shouldn’t risk planned cost savings, or Nissan’s assent. It’s a small price to pay for first-mover advantage in car consolidation.

Arduous road awaits refueled Chinese used-car app

29 May 2019

Uxin is issuing $230 mln of convertible bonds, including to existing investors TPG and Warburg Pincus. It follows a 70% loss in market value since last year's IPO. A short attack, China’s slowdown and generous terms make it hard to see the deal as accurately calling a bottom.