Consumer Products and Services

Facebook’s grip on online ads may be slipping

2 Feb 2022

Parent Meta Platforms lost some $200 bln of market cap after an earnings report that suggested weaker-than-expected advertising growth to come. Headwinds ranging from Apple to TikTok are part of the problem; Mark Zuckerberg’s expensive pivot to the metaverse doesn’t help.

PayPal tries to suck more juice from fewer lemons

2 Feb 2022

The $160 bln payment firm has admitted that piling on 50 mln new customers a year isn’t the path to profit it previously thought. From now on it will seek to get more out of the customers it has. As other financial firms have a similar epiphany, a land grab may become a turf war.

Mark Zuckerberg’s startup project bets the company

2 Feb 2022

Meta Platforms has signaled a $10 bln hit to 2021 operating profit from investments in nascent virtual- and augmented-reality worlds. The founder has lots of advertising cash from his social networks to deploy. But reinventing an 18-year-old firm is a real-world uphill challenge.

Shine keeps coming off AT&T-Discovery deal

1 Feb 2022

The U.S. telecom giant is cutting its dividend as it puts finishing touches on its deal with Discovery. The $43 bln of cash AT&T will get for its streaming assets is helpful. But as the deal nears, shareholders’ muted reaction raises the question of whether it’s worth the effort.

Capital Calls: Antitrust game of chicken

31 Jan 2022

Concise views on global finance: President Joe Biden’s administration is hypersensitive to mergers that reduce competition. Sectors that have also experienced inflation may be top of the hit list – like poultry production.

Breakdown: Real profit and loss in the metaverse

28 Jan 2022

Mark Zuckerberg is on the case, and nascent virtual spaces like Decentraland could be the next social-networking hit. Breakingviews unpacks the metaverse, what it offers users and investors, and the risks.

AT&T and Discovery’s tie-up has a Netflix quandary

27 Jan 2022

The telecom firm added 4.3 mln subscribers for its HBO service, soon to be part of a media joint venture with Discovery. But Netflix’s stock crash suggests streaming valuations have slumped. That takes some of the shine off “Succession” parent WarnerMedia’s upcoming union.

Apple supply shortages are a good problem to have

27 Jan 2022

Tech investors fear the pandemic pulled forward demand, especially for cloud-based companies. The $2.6 trln Apple has the opposite issue. Covid-fueled supply-chain woes have prevented it from satiating iPhone demand. Customer loyalty probably means these sales will come later.

Pushy 7-Eleven investors are welcome inconvenience

27 Jan 2022

The Japanese owner of the Slurpee-selling chain is under growing pressure to spin off struggling units and overhaul the board. There’s a risk of a frustrating battle like the one dragging out at Toshiba. A more receptive approach, however, could deliver Olympus-like results.

Capital Calls: GE’s Larry Culp learns to say “no”

25 Jan 2022

Concise views on global finance: It will be a while before the industrial conglomerate’s markets normalize, and its planned breakup takes place. In the meantime GE is trying to cut costs and be more selective. That means less revenue, at least at first.

Capital Calls: KKR’s e-bike push

24 Jan 2022

Concise views on global finance: The buyout firm leads a 1.6-billion-euro takeover of Dutch bikemaker Accell.

Peltz’s Unilever fight is easy; winning is harder

24 Jan 2022

The investor who took on Procter & Gamble has bought a stake in its European rival. Sluggish growth and CEO Alan Jope’s failed bid for GSK’s consumer arm give Unilever shareholders more reason to welcome an activist. Reshaping the company to boost performance requires more work.

Gary Cohn lottery deal gives investors extra plays

24 Jan 2022

The former Goldmanite's SPAC is merging with Allwyn, implying an $8 bln market cap for the European lottery operator. There's a novel twist: Bonus shares will go to owners who don't redeem their stock. It should help an already sensible-looking bet get over a common SPAC hurdle.

Peloton activist has right diagnosis, dubious cure

24 Jan 2022

Blackwells Capital wants CEO John Foley out and the $9 bln online fitness firm put on the block. An 80%-plus slump from the home-exercise group's peak stock price confirms a squandering of its pandemic advantage. But a big-name buyer like Apple or Disney is an improbable answer.

Ferretti float may be back in same boat

24 Jan 2022

After a bold $1.2 bln valuation target sank its Milan IPO effort in 2019, the Italian yacht maker owned by China’s Weichai is now sailing for Hong Kong. Growth is buoyant, but luxury goods have charted a patchy course on Asian bourses. It’ll be hard, again, to make a splash.

Pandemic darlings now need reinvention

21 Jan 2022

Netflix and Peloton stocks tanked as it became clear lockdown fortunes are changing. Investors may be overreacting to a dose of business reality. Even so, such companies' success has invited copycats, and they’ll have to change to stay ahead.

Lululemon’s valuation makes it a target

21 Jan 2022

The yoga-pants maker is facing a fresh legal battle from Nike after already being hit by Peloton. Such lawsuits are common, but the athletic business is highly competitive, easily replicable and hard to differentiate. Success means rivals take notice and play defense.

Review: Venture capital is a victim of own success

21 Jan 2022

Sebastian Mallaby’s “The Power Law” traces the $1.8 trln industry’s history back to the 1950s. Early investors’ triumphs invited imitators, making capital into a commodity and empowering cocksure startup founders. The lesson is that VCs’ influence over companies may have peaked.

Just Eat Takeaway’s best U.S. call is late dropoff

21 Jan 2022

The food delivery group paid $7.3 bln for Grubhub last year, but investors now attach little value to its American business. CEO Jitse Groen could sell it or spin it off, but only by recognising a big loss. Waiting for the unit’s prospects to improve might be a better plan.

U.S. relisting for Luckin would be hard to swallow

21 Jan 2022

China’s would-be challenger to Starbucks may be plotting a market comeback after $300 mln in fake sales got it booted from Nasdaq. It has restructured and is moving towards profitability, but otherwise is covered with red flags. Even floating on a local bourse would be ambitious.