Data

WPP woe advertises scope for shiny buyout

28 Feb 2025

The $9 bln UK group’s shares fell 16% after it warned sales may flatline in 2025. A shaky backdrop for deals means industry rivals are unlikely to pounce on their discount rival. But if a private equity shop can copy the success of rival Publicis it can make a neat return.

Data decline blurs Fed’s soft-landing vision

18 Sep 2024

US government surveys provide essential statistics, but quality is at risk as response rates drop and agencies face a funding crunch. The central bank requires reliable information about economic conditions as it prepares to cut rates. Its only option is to cast a wider net.

Data centre boom reveals AI hype’s physical limits

4 Jul 2024

The investor frenzy over artificial intelligence assumes there will be enough infrastructure to support apps like ChatGPT. But a $1 trln rush to build data centres faces planning restrictions and energy constraints. That will limit processing power and push up costs for users.

Nvidia customer’s valuation voodoo tests AI mania

2 Jul 2024

Germany’s $1.4 bln Northern Data has access to the US giant’s sought-after chips and makes money by renting them out. It may re-list parts of the business on the Nasdaq. If investors accept a mooted $10-16 bln price tag, it’s a sign the market has truly lost touch with reality.

Larry Fink makes racy salvo in private markets war

1 Jul 2024

BlackRock will buy UK buyout fund data provider Preqin for $3.2 bln, muscling aside rivals like S&P. It’s a rich price that will take years to pay off. While CEO Fink has a history of savvy deals, higher rates and acute competition in alternative assets both raise the stakes.

Arm encounters the AI bubble’s ups and downs

9 May 2024

The $110 bln chip designer reported record revenue in the fourth quarter, but investors disliked a less punchy outlook. Big Tech’s AI-fuelled data centre land grab is powering Arm’s revenue and margins. But its toppy valuation means any perceived upset gets punished.

AI’s power surge short-circuits longer-term plans

1 Apr 2024

Data centers account for 2.5% of the US grid, and machine learning is supercharging growth. Where and how to build megaplexes consuming as much electricity as a small nuclear plant are the immediate problems, but they’re solvable. Calculating future demand is the real conundrum.

AI hype will be hard to puncture

20 Mar 2024

Short-seller Hindenburg is attacking $80 bln Equinix, whose data-center investments have been pumped up by artificial-intelligence exuberance. US regulators are also starting to target some of the hot air. Even so, the valuation bubble is more likely to deflate slowly than pop.

Meta’s EU subscription looks suspiciously pricey

3 Oct 2023

The Instagram owner may allow Europeans to pay $14 a month to avoid ads. It’s hard to see many users signing up, and the price is far higher than Meta’s regional revenue per user. Regulators and courts, which effectively pushed for this outcome, may get a phantom solution.

Uncle Sam risks recession by a thousand cuts

22 Sep 2023

A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.

Amazon-EU web content spat is all about grey areas

20 Jul 2023

The $1.4 trln e-commerce giant is fighting Brussels’ decision to class it as a large online platform and hence face extra scrutiny. Given its size, Amazon’s challenge at first looks like a long shot. Yet the legislation’s vague language creates scope for disputes.

Bain’s Chindata buyout saga verges on absurd

13 Jul 2023

The US investment firm last month offered $2.9 bln for the Chinese data centre operator it already controls after potential rival bids yielded nothing. Now a state-backed group has bested Bain’s offer by 15%, yet is being ignored. It’s an odd way to get the best deal all round.

Gregorian calendar, Fed target spoil inflation dip

12 Jul 2023

New data suggests the US is close to beating inflation. Yet June’s 3% rate was somewhat helped by a yearly comparison that will only get tougher. And with the Federal Reserve sticking closely to its 2% inflation goal, the finish line is probably much further out.

Big Tech backlash swells the AI gold rush

26 Jun 2023

Cloud provider Databricks is buying a machine learning startup for $1.3 bln, almost six times its valuation earlier this year. Models backed by Microsoft and Google dominate artificial intelligence. But a bet that companies want to control their data is pumping up smaller rivals.

Reddit’s golden geese foul up its IPO plans

16 Jun 2023

The social network differs from peers like Facebook in its reliance on moderators – effectively unpaid employees, many of whom are on strike. Until CEO Steve Huffman can align their interests with his future investors, it’s hard to see Reddit as ready for public-company life.

A $6 bln server deal is template for a mini-boom

1 Jun 2023

Buyers raced to pay sky-high prices for data centers feeding the cloud - until a market turn brought bankruptcies and tumbling shares. A bidding war involving Brookfield suggests the race is on again, as buyers try to exploit the last cycle’s exuberance and the next one’s hype.

Capital Calls: Lucky LBOs, Byron Trott

12 Dec 2022

Concise views on global finance: Coupa Software, a business that tracks expenses has a message for investors weighing its sale to Thoma Bravo: it is doing terribly. Byron Trott’s BDT is taking grill-maker Weber private again for $3.7 bln, a discount to last year’s IPO valuation.

Server landlords have plenty more rents to extract

16 Sep 2022

Short-seller Jim Chanos says data centers are overvalued, but buyout shops keep chasing firms like London-based Global Switch with bids over 30 times EBITDA. Tech giants are a threat. But as long as demand outpaces supply and cheap financing is available, the party can roll on.

Alibaba suffers under someone else’s cloud

15 Jul 2022

Investors erased $14 bln of the company’s value on news that authorities summoned executives after a breach of a police database it hosts. The hack of 1 bln Chinese citizens’ details seems mostly an embarrassing government cybersecurity flop. But Alibaba is an easy proxy target.

China data centres get handy M&A jolt from Beijing

26 Apr 2022

U.S.-listed Vnet and Chindata’s beaten-up valuations are already seeding takeover interest. The deals look opportunistic but a new government-led digital infrastructure push is a game-changer. That should allow rainmaking rivals to benefit even more from consolidation.