Coronavirus

Italy gives sovereign debt revolution a nudge

12 Jun 2020

The country will sell bonds whose payout is linked to how GDP evolves. It’s a first step that only targets domestic savers. But cultivating an international market for such securities could help countries, particularly ones locked into the euro, to better weather economic shocks.

S&P 500 recovery is all tech, all the time

11 Jun 2020

America’s largest companies have, overall, essentially recovered from the Covid-19 shock. But it’s an uneven story: Apple, Microsoft and their sector peers are up in 2020, but financials, energy firms and many others are still down. This faith in tech immunity looks misguided.

EU’s data harpoon won’t be last shot at Amazon

11 Jun 2020

The European Commission may soon charge Jeff Bezos’s company over the alleged use of data gathered from third-party sellers to unfairly compete against them. Antitrust chief Margrethe Vestager may well already be lining up the next salvo, perhaps targeting Amazon's advertising.

Corona Capital: Instacart stocks up

11 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Grocery-delivery firm and lockdown beneficiary Instacart tops up on capital while the getting is good.

“Lipstick effect” kissed off by Covid-19

11 Jun 2020

Estee Lauder’s ex-chairman once theorised that a downturn could be discerned by women buying the cheaper cosmetic over pricier items. Masked mouths, however, help explain a steep fall in lipstick sales during the pandemic. An economic-indicator makeover may be in order.

Cirque du Soleil deal needs contortionist skills

10 Jun 2020

Creditors want to take control of the acrobatics company. The company required a reboot even before Covid-19 forced shows into hiatus in March. The pandemic has made it even harder to value. But with other high-wire deals getting done, Cirque’s show is likely to go on.

Just Eat-Grubhub deal requires fistful of antacid

10 Jun 2020

The European food-delivery service is to buy its U.S. counterpart for $7.3 bln. There are some benefits, not least access to more capital for Grubhub. But little overlap means few cost savings – and Just Eat enters a cut-throat U.S. race against Uber Eats, DoorDash and Postmates.

Snowflake stands out as the real IPO deal

10 Jun 2020

The enterprise-software firm has filed to go public in what may be a huge month for equity offerings. Snowflake is growing fast and may soon break even. That makes it a good pick. But overall, selectivity is falling, which is often a harbinger of poor long-term performance.

Mall merger dispute could leave both sides losers

10 Jun 2020

Simon Property is backing out of its $3.6 bln purchase of U.S. operator Taubman, saying the seller mishandled Covid-19. Unlike some repentant buyers, Simon says it wants out, not just a better price. Still, this isn’t a vote of confidence in its dealmaking or business model.

Inflation is alive and well in equity markets

10 Jun 2020

The May U.S. consumer price index fell 0.1%. So massive money creation doesn’t seem to be generating inflation. But the S&P 500 is up 24% this quarter, IPOs are cruising and bankrupt companies are getting bids, all while unemployment is at 13%. Policymakers probably won’t notice.

Corona Capital: Make infrastructure great again

10 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Brookfield Asset Management CEO Bruce Flatt reckons national and local governments will start getting investors to help finance new roads, bridges and the like. That’s one way to plug deficits wrought by Covid-19.

Travel bubbles could encase global divisions

10 Jun 2020

Australia and Norway are among the countries aiming to open borders to neighbours in similarly good health. Welcoming visitors should help slumping economies, especially in Hong Kong and Macau. The risk of narrow deals is that they reinforce the world’s balkanisation trend.

Mets bid faces Philly-style conflict of interest

9 Jun 2020

Apollo’s Josh Harris and Blackstone’s David Blitzer are exploring buying the New York baseball team. But they already own a sports team in Philadelphia – home to the sluggers’ archrivals. Private equity understands conflicts. But handling sports fans may be their toughest test.

The Exchange: BlackRock ETFs

9 Jun 2020

Exchange-traded funds are wildly popular with retail and institutional investors alike. BlackRock’s global head of ETFs and index investments Salim Ramji demystifies these tools, revealing how they passed their crisis test and how they challenge the active vs. passive divide.

Tiffany-LVMH battle underscores can vs. should

9 Jun 2020

The U.S. jeweler’s rejigged debt covenants allow it to fend off a possible LVMH attempt to lower a $16 bln bid. Still, a 45% sales slump shows Tiffany needs to marry its larger French suitor. Closing a deal amicably and quickly is best. It doesn’t mean LVMH boss Arnault will.

Gilead solidifies pharma pandemic insurance premia

9 Jun 2020

The $100 bln company has an approved Covid-19 drug that the U.S. government is distributing. That helps replace maturing HIV and dwindling hep C meds, and made Gilead a takeover target. The ability to cure what ails the entire economy buffs the sector’s strong defensive nature.

Corona Capital: Goldman, Vroom, Deutsche Bank

9 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Goldman does too well in Britain; shares in online used-car sales outfit Vroom double on their market debut; and Deutsche Bank gets another shot at redemption in the U.S. market.

GVS offers hedge against an even darker world

9 Jun 2020

The Italian maker of biohazard masks used to guard against Covid-19 is selling a 40% stake. Listing itself at a 1.4 bln euro valuation driven by surging sales makes sense for GVS’s owners. But if a new virus wave occurs, it may also offset investors’ losses elsewhere.

Dixon: Wean firms off debt by rejigging taxes

8 Jun 2020

Excess corporate leverage makes the global economy wobbly. After the pandemic, governments should use the tax system to encourage more equity and less debt so the world can better resist future shocks. They may even be able to raise some cash to repair their own balance sheets.

AstraZeneca M&A puzzle sends shareholder warning

8 Jun 2020

The $140 bln drugmaker approached U.S. rival Gilead about a merger, Bloomberg reported. The combination lacks strategic logic and looks unlikely. CEO Pascal Soriot has done well for investors. The risk is AstraZeneca’s debt load, or his bigger ambitions, threaten that record.