Internet

EU phase-out of Huawei, ZTE is tricky but vital

20 Jun 2023

Commissioner Thierry Breton wants EU countries to end use of Chinese telecoms gear on national security grounds. Some states have already cut Huawei and ZTE from 5G networks. The EU survived decoupling from Russian energy, and it can manage this. But it requires German buy-in.

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.

Vodafone’s do-or-die UK deal is a risky bet

14 Jun 2023

The $24 bln telecoms firm is merging its UK mobile business with CK Hutchison’s Three to create Britain’s largest network. It is promising investment to win over competition watchdogs. It could backfire, but CEO Margherita Della Valle has few easy ways to please weary investors.

Gaming transatlantic gap invites M&A shoot-’em-up

9 Jun 2023

Shares in European gaming groups like Ubisoft are off by a fifth over the past year, underperforming stateside peers. Self-inflicted slip-ups are partly to blame, but players’ love for US-owned blockbusters means the valuation divide will endure. Dealmaking is a likely endgame.

Amazon wireless plan makes sense for almost no one

7 Jun 2023

The $1.3 trln e-commerce company is once again reported to be mulling a mobile service. But potential partners AT&T, Verizon and T-Mobile have plenty to lose by letting Amazon use their networks. It also would be too expensive to make sense for cost-conscious boss Andy Jassy.

Activist Yelp review is worth hearing out

23 May 2023

TCS Capital wants the local listings site to explore a sale, pitching a tie-up with Barry Diller’s home-services rival Angi. A targeted $70-per-share price – double Yelp’s current valuation – seems absurdly high. But potential cost savings make the combo an intriguing blueprint.

Capital Calls: US gifts Big Tech

19 May 2023

Concise views on global finance: The US’s high court left internet firms’ liability protections untouched in two Thursday rulings. For Twitter, Meta and Google, business as usual is the ideal outcome.

Capital Calls: BT, Mediobanca

18 May 2023

Concise views on global finance: The 14 bln pound UK telco’s vague guidance is a concern for its two big shareholders seeking to recoup losses; the 8.5 bln euro Italian bank buys its biggest boutique yet.

Telecom Italia is stuck in risky game of chicken

4 May 2023

The telco’s board must decide on rival bids from KKR and state investor CDP for its fixed-line grid. None comes close to the 31 bln euro price wanted by top investor Vivendi, but cash is needed to slash debt. If neither side blinks, the group could face a messy capital increase.

“Super Mario” augurs more media-gaming tie-ups

20 Apr 2023

Nintendo and Universal’s film adaptation of the hit video game franchise could rake in $1.5 bln. That’s a big victory for an industry whose spinoffs have more often been the butt of jokes. With gaming stocks having sold off sharply, there’s logic in more media giants plugging in.

SoftBank exit eases Alibaba’s mega reboot

13 Apr 2023

The Japanese group is slashing its stake in the Chinese e-commerce firm to 4%, a symbolic end to a 23-year investment. Not much changes for Alibaba, but SoftBank’s position was a distraction. Now boss Daniel Zhang can focus on pitching shareholders on his radical breakup plan.

Google giggles at China tech’s shrinking act

31 Mar 2023

Investors like Alibaba’s plan to split six ways, hoping peers like Tencent follow. Yet Chinese online giants are already dwarfed by US colossi like $1.3 trln Alphabet. Smaller firms might be nimbler, but they’ll have less R&D funds and M&A firepower to take on the Americans.

Alibaba drafts breakup blueprint for China tech

28 Mar 2023

The $228 bln e-commerce group is splitting into six units spanning logistics to games, which may be listed. That should unlock value for weary shareholders, and please regulators keen to control strategic businesses. If done right, pressure for Tencent to follow may rise.

GoTo is back to facing less existential problems

21 Mar 2023

The $8 bln Indonesian superapp may not need to raise capital in a hurry. It expects to reduce its cash burn by up to 65% this year. Cost cuts are paying off but hard questions on future growth and competition with its financially stronger Singaporean rival Grab remain.

Capital Calls: SVB found old concentration risk

10 Mar 2023

Concise views on global finance: The busted bank counted half of all U.S. venture capital-backed startups as clients. As with financiers to oil barons in the 1980s, monomaniacal focus on a booming industry is a way to court disaster.

There’s hope beyond moaning for European telcos

3 Mar 2023

Orange and Deutsche Telekom asked for US Big Tech to pay for a “fair share” of network investment at the sector’s annual Barcelona bunfight. Even if it helps, it won’t be a quick fix. At least there’s hope the EU will allow more mergers, and new technology could help cut costs.

Salesforce sufficiently acquiesces to angry mob

2 Mar 2023

The $170 bln software developer improved its operating margin, doubled its stock buyback plan and disbanded its M&A committee. It’s effectively everything multiple dissidents wanted. Unless pushy investor Elliott has superstar board nominees, it would be overkill to ask for more.

EU’s Big Tech shakedown heads down new blind alley

1 Mar 2023

The European Commission’s effort to squeeze money out of the likes of Alphabet and Apple now aims at telecommunications, with a bid to make Silicon Valley pay for the bloc’s broadband infrastructure. Regulators have pooh-poohed the idea since 2012. It hasn’t improved with age.

Robinhood’s stock awards tell a cautionary fable

22 Feb 2023

The stock-trading app’s founders just gave back an $806 million bonus linked to certain share-price targets. An accounting quirk means the company must pay for it anyway. It’s one reason such outlays are a bad way to reward executives, as GE and others have learned.

Hermès’ “MetaBirkin” win misses the big picture

17 Feb 2023

A court ruled an artist’s digital version of the $198 bln group’s iconic Birkin bag violated trademark rights. The verdict gives luxury firms more clout to commercially exploit the metaverse. Yet the jury is still out on whether such forays will be anything more than marketing.