Consumer Products and Services

SVB sale puts too-big-to-fail risk in a new bottle

27 Mar 2023

First Citizens got a good deal buying Silicon Valley Bank’s assets. For regulators, it’s a tradeoff. The buyer’s balance sheet has nearly quadrupled in just over a year. Until flaws in overseeing fast-growing banks are fixed, promoting aggressive expansion brings new pitfalls.

Even a half-empty glass would satisfy dealmakers

24 Mar 2023

Despite efforts to put on brave faces, M&A advisers gathered in New Orleans betrayed uncharacteristic pessimism. Just as clients were coming to grips with tougher financing, regulatory and valuation considerations, banks started collapsing. Confidence is in ever-shorter supply.

Bitcoin is a solution looking for a problem

24 Mar 2023

Peter Thiel says the cryptocurrency is an inflation hedge, and bitcoin’s price has soared since Silicon Valley Bank’s collapse. But his actions don’t match that advice, and the Fed’s backing of the system is antithetical. Plus, importantly, bitcoin, unlike gold, is speculative.

Canada’s retail problems augur insular economy

23 Mar 2023

Nordstrom became the latest US chain to fold up north after failing to crack a relatively small market with local competition. Fewer major metropolitan areas than the US is one issue, but the challenges aren’t confined to the sector. Canada is at risk of further isolating itself.

Capital Calls: Credit Suisse bump trade

20 Mar 2023

Concise views on global finance: The bank’s shares closed above the implied value of UBS’s $3.2 bln government-backed offer. Investors expecting more may be disappointed.

Salesforce is stuck with its pricey acquisitions

20 Mar 2023

Pushy investors persuaded the business software developer to cut back on M&A, but undoing past deals would be tougher. Offloading $28 bln Slack, $16 bln Tableau or $7 bln MuleSoft looks to be more trouble than it’s worth. Integrating them is a better, albeit slower, approach.

Capital Calls: FedEx delivers, for now

17 Mar 2023

Concise views on global finance: Shares in the delivery company shot up over 10% on Friday, as cost-cutting measures pay off. Those benefits could easily dwindle.

Capital Calls: BlackRock and ESG, UK pensions

15 Mar 2023

Concise views on global finance: Bank ructions and inflation give Larry Fink, boss of the $8 trln asset manager, cover to talk about something other than climate change in his annual letter; Britain’s abolition of a retirement tax threshold is an expensive way to help the rich.

Goldman’s new strategy gets baptism of fire

15 Mar 2023

Its traders bought bonds from SVB as its bankers tried to help plug the hole that was left. Colleagues in investment may now be able to pick up troubled assets in the wreckage. It’s true to boss David Solomon’s One Goldman vision, though ideally the client lives to tell the tale.

Kanye West blunder puts Adidas in play

15 Mar 2023

The $28 bln sportswear maker is battling to restore its image after ditching a lucrative but dubious alliance with the musician. That requires CEO Bjorn Gulden to splurge on marketing, hitting dividends and margins. Adidas’s depressed valuation may soon catch the eye of rivals.

Capital Calls: Uber’s risky gig, Meta’s NFTs

14 Mar 2023

Concise views on global finance: A California court ruled in favor of classifying drivers as independent contractors, but investors may be overlooking other risks; after less than a year, Mark Zuckerberg’s $465 bln social media company is getting rid of its NFT capabilities.

Icahn reacts audaciously to Illumina’s audacity

14 Mar 2023

The mouthy billionaire wants three board seats at the $36 bln biotech company and for it to spin off Grail. Boss Francis deSouza overpaid to buy back the cancer detection business and took on too much regulatory risk. Some oversight is warranted, but a 1% stake only buys so much.

Hollywood faces a content reckoning

14 Mar 2023

Netflix and other streaming giants are refocusing on profitability over subscriber growth. In this episode of The Exchange, Vania Schlogel, an investor in Brad Pitt’s production firm, explains what challenges lie ahead for those selling TV shows, movies and music rights.

Starbucks’ union brouhaha risks Schultz’s legacy

14 Mar 2023

Employees have organized and U.S. courts found that the $115 bln latte maker broke labor laws. But operating costs may go up by just $23 mln, or 0.2%, as a result of the current unions. What’s more at risk is Howard Schultz’s legacy and the company’s worker-friendly reputation.

Startup CEOs learn a lesson in counterparty risk

13 Mar 2023

The venture-backed firms that used Silicon Valley Bank tended to keep large, uninsured piles of cash there. That helped them access credit and other services but concentration was risky. The bank’s failure will bring change – with diversification in banks and in investments.

Obesity drugs have heft beyond Weight Watchers

7 Mar 2023

The first effective obesity therapies are just starting to have effects beyond their pharma developers and patients. WW International’s purchase of a telehealth prescriber is a pivot, but one that may help its existing business. Other firms will follow.

Amazon expansion collides with contraction

6 Mar 2023

Cities from Newark to Dallas bent over backwards to court the e-commerce giant five years ago. Now it is hitting the pause button on HQ2. The fate of a Virginia compound depends on labor market and work-from-home trends. Even $1 trillion companies are without a crystal ball.

Altria partly learns from its vaping mistakes

6 Mar 2023

The home of Marlboro is spending up to $3.3 bln on vape maker NJOY, reflecting a heady multiple of 33 times sales. Altria gets a validated e-cigarette product, which is more than could be said for Juul. It has to make NJOY popular, though, which won’t be easy.

U.S. stores hawk same brand of cautious pessimism

2 Mar 2023

Retail bosses from Walmart’s Doug McMillon to Home Depot’s Ted Decker are warning that consumers will curb spending this year. Stubborn inflation and supply-chain ructions fog the outlook. CEOs have good reasons to be uneasy. There’s also nothing but upside if they’re wrong.

Instacart could do worse than incinerating $32 bln

1 Mar 2023

That’s about how much the company’s value could fall in an IPO compared to its last fundraising. But public market prices have fallen considerably, and Instacart insiders might be getting antsy. If it doesn’t take a valuation reckoning, it could miss the chance.