United States of America

Google antitrust roulette puts $600 bln at stake

9 Oct 2024

US competition cops presented a grab bag of possible remedies, including breaking up the $2 trln tech giant, after it was ruled a monopoly. Its dominance may soften the blow. But with search revenue and more at risk, the worst-case hit could top a quarter of Google’s value.

Richemont exits online hell, but heaven is way off

9 Oct 2024

The $70 bln luxury group is offloading its ailing platform YNAP in exchange for a stake in US-listed buyer Mytheresa. Chair Johann Rupert gets rid of a loss-making arm. But the sector’s dubious economics make it hard to see how he winds up with a holding that offsets his blushes.

Rio’s $6.7 bln lithium bet is a pricey slow burn

9 Oct 2024

The $112 bln miner is paying a 90% premium to buy Arcadium in cash. That’s probably not justified by the synergies – and Rio Tinto has yet to reveal them. Boss Jakob Stausholm can point to forecasts of a lithium demand surge, but right now investors have to take his word for it.

Neither precedent nor Trump can save Big Tech

8 Oct 2024

Epic Games’ victory in a suit against Google means the search giant must open up its app store. Tech honchos may be hopeful for a change of administration. But even if a new president softens stance, the past four years and lawsuits elsewhere will do permanent damage.

Qualcomm’s Apple threat explains interest in Intel

8 Oct 2024

Most of the $190 bln wireless firm's revenue comes from designing chips for phones, and Apple chafes at hefty royalties. Acquiring bits or all of Intel would offer diversification and make Qualcomm a more “American” company. Mulling such a risky deal shows the company’s weakness.

Decoding the puzzle of SoftBank’s Masayoshi Son

8 Oct 2024

The Japanese tycoon shaped global technology while building and losing vast fortunes. How does he keep going? In the first episode of Breakingviews’ new podcast, The Big View, former FT editor Lionel Barber discusses what he uncovered in his biography of Son, ‘Gambling Man’.

Ireland spins global tax mess into $28 bln of gold

8 Oct 2024

Dublin expects a 2024 budget surplus worth 8% of gross national income, thanks to the presence of US companies lured by low levies. It’s evidence that profit shifting lives on despite a landmark OECD deal. The good news for Ireland is that there’s little chance of that changing.

Pfizer’s M&A disease brings activist cure

7 Oct 2024

The pharma giant generated over $30 bln of extra cash during the pandemic, then spent over twice as much on questionable deals. With shareholders sitting on a loss under CEO Albert Bourla, Starboard will push for a return to former CEO Ian Read’s parsimony.

AI sparks only dim odds of nuclear chain reaction

7 Oct 2024

Plans to reopen a Three Mile Island plant have created buzz about an atomic energy comeback. For $1.6 bln, however, Constellation’s site would power just one big data center. The economics may someday compete with solar, but it will take coordination as hard to manage as fission.

Debt feast helps buyout firms through IPO gloom

7 Oct 2024

Dividend recaps, where private equity managers pile debt onto a company to give themselves a payday, are booming, with $17 bln in the US last month. Since public offerings look tough, it’s a handy cash-raising alternative. The trend will continue, if the economy plays ball.

Union flaws run amok on both sides of picket line

4 Oct 2024

Port workers on the US East Coast have negotiated a 62% pay rise over six years. The resolution seems fair. But the process has highlighted gross inefficiencies – from overpaid union leaders to a nebulous counterparty. A revamp of unions, in the absence of politics, is necessary.

Capital woes are no rebuttal to merger foes

4 Oct 2024

Budget airline Spirit may file for bankruptcy after competition cops grounded a merger with rival JetBlue. A judge ignored pleas that the firm is failing – but even now, Spirit doesn’t meet a legal test that’s strict for good reason. The market has ways to fix bad businesses.

Filmmaker’s SPAC deal stages Oscar-worthy horror

4 Oct 2024

Angel Studios is going public at a $1.6 bln valuation with scary self-dealing and bitcoin featured. It also lost its biggest show, owes damages to Disney and courted controversy with child-trafficking movie “Sound of Freedom.” Even seasoned blank-check pros will be spooked.

OpenAI’s $157 bln valuation requires hand waving

3 Oct 2024

Assuming new investors want a 20% return in the artificial intelligence company, it needs a $1 trln price tag in a decade. That’s conceivable, based on other tech giants’ history. Founder Sam Altman just needs to beat rivals, turn a profit, and update its business model.

Middle East turmoil edges closer to global economy

3 Oct 2024

Military escalation between Iran and Israel may at some point affect the price of oil. In this Viewsroom podcast, Breakingviews columnists debate how the conflict may prompt a fresh inflationary headache for central banks – and how Saudi Arabia might offset that risk.

Big Tech farms out AI power build, keeps the risk

3 Oct 2024

Microsoft’s 10.5 GW electricity deal with Brookfield typifies a trend towards mega supply pacts. Given the huge capex bill for data centres, third-party power makes sense. But if artificial intelligence flops, so-called hyperscalers may be left with a lot of electrons to flog.

Beware hallucinations in AI chipmaker IPO

2 Oct 2024

Cerebras, a wannabe Nvidia challenger, may seek a valuation as high as $8 bln, or some 29 times sales. ChatGPT hype and Arm’s success will help, but the company’s growth hinges on one customer, Abu Dhabi’s G42. Their broader circular relationship also warrants sober scrutiny.

Gulf turmoil will leave ratesetters on edge

2 Oct 2024

Israel’s riposte to Iran’s missile strike may see oil prices spike. The Fed, the ECB and peers struggled to contain inflation in 2022. A new energy crisis, along with a US docker strike, would force central banks to rethink rate cuts just as markets price them in.

Bain jets towards first-class lounge Down Under

2 Oct 2024

The private equity firm is selling 25% of Virgin Australia to Qatar Airways for an undisclosed sum ahead of an IPO. Fold in last year’s dividend recap and assume it’s growing like larger rival Qantas, and the airline is en route to delivering Bain a sky-high 40%-plus return.

AI’s next feat will be its descent from the cloud

2 Oct 2024

Tech giants hoping to spend $1 trln on data centres are struggling to secure power supplies and space. That bolsters the case for smaller artificial intelligence models that can run on devices, not a remote platform. Phone and laptop makers from Apple to Lenovo stand to benefit.