Consumer Products and Services

Capital Calls: Twitter snubs investors

27 May 2022

Concise views on global finance: The social media platform refused to accept the resignation of director Egon Durban, one more check for bad corporate governance. But it’s not like investors have held the company to a high standard.

Consumers are the next transitory guessing game

27 May 2022

Central bankers and investors spent months debating whether inflation was here to stay. Now that mystery applies to the financial state of Americans, who are glum about the economy but still spending. It’s a problem for the Fed, but consumers might just have staying power.

Icahn squanders golden chance to shape McDonald’s

25 May 2022

The activist’s campaign to shake up the chain’s board with two directors over claims of the mistreatment of pregnant pigs is likely to fail. ESG issues can usher in change as Exxon can attest. But Icahn’s focus is too narrow, and McDonald’s board – and business – could use help.

Capital Calls: Airbnb, Prudential, Glencore

25 May 2022

Concise views on global finance: The $68 bln vacation-booking platform will shut its Chinese business; the insurer appoints a new CEO – finally; the commodities giant has a $10 bln reason to keep its nose clean, after a $1.5 bln settlement for corruption allegations.

Alibaba’s overseas growth push faces European test

25 May 2022

The $223 bln Chinese e-commerce giant hopes to offset sluggish growth at home by expanding in the region via its Southeast Asian offshoot, Lazada. But with a European market share of less than 5%, and entrenched rivals like Amazon, Alibaba may struggle to justify the investment.

Snap! Elon Musk has another Twitter excuse

24 May 2022

The disappearing message app abruptly slashed its quarterly profit forecast, sending shares spiraling nearly 40%. That’s an ominous sign for Twitter, which like Snap, relies on brand advertisers. It also gives the Tesla boss another reason to bail on buying the social platform.

Capital Calls: Didi delists from the NYSE

24 May 2022

Concise views on global finance: Shareholders have voted to remove the beleaguered ride-hailing service from the Big Board. One way to play the company now is as a risky bet on which road Beijing’s regulators decide to take.

Review: War on digital payment fails to hit target

20 May 2022

Brett Scott’s “Cloudmoney” seeks to remind the world of the value of physical cash. It’s true that an overly automated system of money carries risks like the potential for surveillance. But the campaigner underestimates consumer demand for digital transactions.

Capital Calls: Richemont’s China fears, THG offer

20 May 2022

Concise views on global finance: Shares in the Cartier owner shed 13% after caution about a rebound in the People’s Republic added to subpar full-year results and slow progress on the YOOX Net-a-Porter sale; the UK online retailer rejected one bid, yet higher ones look unlikely.

Investors pick old Walmarts over new Amazons

17 May 2022

The usually steady U.S. retailer cut its profit outlook after being hammered by inflation. Its shares fell 9%, but Amazon, which has similar problems, has done worse. Other old-versus-new pairs are following a similar path. In some cases punishment is being meted out unfairly.

Hong Kong co-living boom bets on more lonely years

17 May 2022

Warburg Pincus is among those buying hotels in the Asian hub to convert into upscale shared digs for millennials. Given a 99% drop in visitors in the past three years and a belief that won’t reverse soon as officials stick with China’s zero-Covid policy, more deals look likely.

Tencent Music sets sombre tone for China tech

17 May 2022

Quarterly sales slumped 15% to $1 bln thanks to the triple whammy of a slowing economy, more competition and new regulations. It'll be a familiar refrain for the Spotify-like group's $430 bln parent and peers. Focusing on profitability over growth should hit the right notes.

Western companies have 50 bad ways to leave Russia

16 May 2022

Multinationals can sell out like McDonald’s, shut down like Zara owner Inditex or shrink operations like Nestlé. Hopes of finding a Chinese or Indian buyer may prompt some to drag their heels. But the threat of forced nationalisation gives others an incentive to hurry.

A $14 bln Brambles buyout would loosely stack up

16 May 2022

The Aussie manufacturer of wood pallets is considering an approach from CVC. Tough freight and lumber markets make it vulnerable; its lacklustre total shareholder return doesn’t help either. A chunky deal looks tricky amid rising interest rates, but the takeover maths checks out.

India stands between world and food riots

16 May 2022

A ban on wheat exports is a messy but partial U-turn on India’s pledge to feed the world with its grains. The move protects consumers at home at the expense of farmers. Globally, it will exacerbate food security woes and shift the focus onto the country’s critical rice exports.

Tech unicorns become zombies

13 May 2022

Companies like Peloton, Carvana and DraftKings hit up investors for cheap capital to bolster balance sheets over the past years. But they haven’t used the cash to sort out business models – and they continue to burn through it. They have varying cushion but may already be dead.

Reinvention tops returns in Philip Morris snus bet

11 May 2022

The tobacco giant has agreed a $16 bln takeover of nicotine pouch maker Swedish Match. The deal brings it closer to being mostly smoke-free by 2025. But only rapid growth or big cost cuts can justify the 39% premium. CEO Jacek Olczak has scant room for legal or regulatory snafus.

Super-car SPAC tests EV hype’s reset expectations

11 May 2022

A $1.7 bln bid to resurrect a battered Chinese electric automaker comes as other upstarts are under pressure. Buyer Liu Suying likes a comeback story: he recently relisted Playboy. But CH-Auto’s failure to flog sporty coupes means it’s unlikely to be the next Tesla or Nio.

Grindr’s SPAC profile picture is a blur

10 May 2022

The LGBTQ community’s favoured dating app is listing via a merger with a blank-cheque firm run by a major shareholder. The $2.1 bln price tag looks chunky next to peers like Bumble. Besides data security and governance, investors can fret about potential conflicts of interest.

Capital Calls: Turkey, Nintendo/Sony, India IPO

10 May 2022

Concise views on global finance: President Erdogan makes another ham-fisted monetary intervention; the Switch maker weathers supply chain ructions better than its larger rival; New Delhi needs to be even more generous in its landmark listing of Life Insurance Corp of India.