Americas

Capital Calls: Charter and Altice

27 Feb 2024

Concise views on global finance: Tying up Charter, the cable giant backed by the media mogul, with rival Altice USA would form the country’s largest broadband player. That isn’t worth bearing the burden of regulatory hurdles, Altice’s mountain of debt, or its over-rich valuation.

Stephen King ghost-writes trustbusting bestseller

27 Feb 2024

The US FTC is suing to block the $25 bln merger of grocers Kroger and Albertsons partly because of perceived harm to union labor. It resembles, oddly enough, a winning DOJ lawsuit over Penguin’s deal to buy Simon & Schuster. The case has a good shot at becoming a horror classic.

A plot twist threatens Jay Powell’s artful script

27 Feb 2024

Higher borrowing costs are helping achieve the Fed’s 2% inflation target without a recession, but US wages and consumer spending tell a different tale. The upward price pressure augurs elevated interest rates for longer. To ensure a happy ending may require revising the story.

Why central banks risk making more mistakes

27 Feb 2024

Western rate-setters were late in fighting inflation. In this Exchange podcast, TS Lombard economists Dario Perkins and Davide Oneglia argue that, as price growth abates, the US Federal Reserve and European Central Bank may be too slow in easing monetary policy.

Buffett puts $1 trln grid problem in a bad light

26 Feb 2024

The billionaire’s Berkshire Hathaway became one of the biggest US utilities on the basis that providing electricity would generate steady returns. He now says he made a “costly mistake.” Thirteen-digit capital demands from climate change are quickly dimming investment prospects.

Top JPMorgan banker spots value in Citi rotation

26 Feb 2024

Viswas Raghavan is leaving a senior post at the world’s largest investment bank to lead a broader but smaller business for its rival. If he partly narrows the gap between the two, investors should gain. The 57-year-old might even have a shot at succeeding Citi CEO Jane Fraser.

Reddit loves users, so it’s giving itself a deal

26 Feb 2024

The social media firm plans to reserve IPO shares for loyal visitors, a tactic enlisted by the maker of Sam Adams beer and trading firm Robinhood. So-called “affinity programs” are risky, as Robinhood’s 2021 offering shows. But it may help Reddit get the valuation it wants.

Europe shares’ granola rush will become thin gruel

26 Feb 2024

The STOXX 600 Index has hit a record, but local funds are seeing outflows. As in the US a small bunch of companies – the so-called GRANOLAS group – are behind the good news. But in the Old Continent they’re more dependent on weak economic growth rather than the AI revolution.

Alcoa forges smart deal out of metal woes

26 Feb 2024

The US metal producer wants to buy Alumina, whose sole asset is 40% of a joint venture with its wannabe new owner. Benefits to Alcoa from the $2.2 bln deal include a simpler structure. And selling investors get a premium despite rising costs and falling aluminium prices.

Warner Bros Discovery makes case against media M&A

23 Feb 2024

The HBO owner’s first full year since the merger of Warner and Discovery was a grim one. Boss David Zaslav lived up to cost-cut goals but missed nearly everywhere else. Even well-run deals can’t stem industry woes, making future tie-ups - with, say, Paramount - look ill-advised.

Wall Street lives libertarian-lite dream in Miami

23 Feb 2024

Financial luminaries have flocked to the city for a Saudi-backed answer to Davos, a sign that Florida’s rise as a financial hub is durable. The Sunshine State gives the wealthy a glimpse of low taxes, entrepreneurialism and small government. It’s freedom, but only for some.

Strategic clarity fuels US oil giants’ M&A spree

23 Feb 2024

Exxon Mobil and Chevron are buying up rival drillers on expectations that demand for crude will still be robust in 2050. European rivals like Shell are less bullish about oil, but reluctant to pile headlong into green energy. That helps explain the transatlantic valuation gap.

Reddit’s future looks bright through VR goggles

22 Feb 2024

The social media firm's IPO document shows narrowing losses and a fast-growing top line. But compared to competitors, a mooted $5 bln valuation should be a stretch. The upshot is founder Steve Huffman’s plan to sell data to train AI models. That has promise, in a virtual world.

Rivian swerves dangerously into crowded slow lane

22 Feb 2024

The electric-truck maker’s market value fell by a quarter to $11 bln after warning that production would flatline at about 57,000 vehicles. It joins rivals rapidly rewriting growth-to-profitability manuals copied from Tesla. Grinding down costs instead will be a far tougher road.

Mining pain may be just getting started

22 Feb 2024

Falling prices for nickel, lithium and copper have hit earnings at Glencore and Anglo American. In this Viewsroom podcast, Breakingviews columnists explain why competition and dwindling demand for electric vehicles will keep key battery commodities under pressure.

Higher rates insidiously creep into the boardroom

22 Feb 2024

Stock prices have been on a tear, in anticipation of the Fed reversing its policy. The exuberance ignores longer-term consequences of growing interest expenses. To pay them, many companies will have to cut back elsewhere. Share buybacks, capex and M&A look especially vulnerable.

Capital Calls: Oil M&A

22 Feb 2024

Concise views on global finance: The $11 billion Williston Basin combination of Chord Energy and Enerplus lacks the wow factor of Exxon’s and Chevron’s mega-mergers, but there are sufficient savings to suggest more deals will be on the way.

Nvidia’s AI stronghold supports $3 trln valuation

21 Feb 2024

The chipmaker’s latest results support the frenzy that tripled its stock price in a year. Unlike other dubious beneficiaries of artificial intelligence hype, the $1.7 trln company’s grip on the market will be hard to wrest. It could soon be worth nearly twice as much again.

Universal Music’s John Legend deal is harmonious

21 Feb 2024

The music giant is purchasing a more than 25% stake in Chord for $240 mln, gaining some control over the music with a sliver of its own money at risk. Importantly, Universal is buying Chord from KKR. Swapping tunes between sophisticated buyers legitimizes the business.

Too many drugmakers drool at anti-obesity trough

21 Feb 2024

Novo Nordisk’s and Eli Lilly’s jumbo valuations are luring rivals eager for a piece of the $100 bln weight-loss pie. This herd behavior has become a pattern in pharma, crimping returns on R&D. Despite slim odds of getting a big market slice, the temptation is too hard to resist.