Management & Leadership

Capital Calls: Snowflake’s no snowflake

3 Mar 2022

Concise views on global finance: The data warehouse firm doubled revenue, but the stock was whacked. Snowflake’s solid finances mean missteps are valuation conundrums, not existential threats.

Citi’s new targets half hit the mark

2 Mar 2022

CEO Jane Fraser thinks the gaffe-prone U.S. bank can clean up and deliver a 12% return on tangible equity. It’s less ambitious than Wall Street peers, but Citi’s challenges are bigger. To the extent it relies on growth rather than self-help, investors are justifiably skeptical.

Oligarch sanctions’ devil no longer in the detail

1 Mar 2022

Brussels froze assets of Russian billionaires like Alexei Mordashov and Mikhail Fridman. Unlike U.S. sanctions, their companies don’t automatically get hit. Even so, counterparties may in any case decide steel group Severstal and investor LetterOne are too toxic to deal with.

Toshiba CEO change sends promising signal

1 Mar 2022

Satoshi Tsunakawa will be replaced by Taro Shimada, who joined from Siemens in 2018. The move suggests a sale option might get reconsidered over a controversial breakup plan. The bad governance that has dogged the conglomerate, however, means any optimism should be muted for now.

Goldman reminds top dogs it can do what it wants

23 Feb 2022

The Wall Street firm may confiscate stock issued to a banker who left to start a business for Walmart. Goldman has historically gone easy on employees who join big clients. But competitors are proliferating, and boss David Solomon needs a firm hand to deal with new rivals.

CalPERS offends no one with new investment chief

22 Feb 2022

That’s tough on Nicole Musicco, appointed to run the retirement fund’s nearly $500 bln of assets after an 18-month search. But it reflects politics at the California giant, not her abilities. One goal should be to nudge CalPERS toward the pension model of Musicco’s native Canada.

Capital Calls: DraftKings, Shake Shack, Fanatics

18 Feb 2022

Concise views on global finance: The online gambling firm predicts fast growth but heavy losses; the U.S. burger chain had disappointing earnings yet its valuation is sky-high; the sports merchandiser teams up with Jay-Z to buy a streetwear firm for a song.

StanChart’s modest targets risk becoming a mirage

17 Feb 2022

CEO Bill Winters is aiming for a 10% return on equity by 2024, having failed to hit the same goal in his first seven years in charge. Rate hikes will help this time, but the plan hinges on aggressive growth hopes. Winters may have to consider more radical cost cuts and disposals.

Citi’s Jane Fraser embodies Wall Street’s pay gap

15 Feb 2022

The new CEO’s $22.5 mln package lags jumbo sums awarded to JPMorgan’s Jamie Dimon and Goldman Sachs’ David Solomon. Citi hasn’t been a great investment. But overemphasizing past returns could leave Citi the worst of both worlds: A troubled bank with a boss in need of motivation.

Capital Calls: EVs run over ethanol and gas

15 Feb 2022

Concise views on global finance: Farmers and oil barons are set for more fights after a recent study showed the biofuel is likely at least 24% more carbon-intensive than gasoline. They are missing the bigger threat.

Capital Calls: Clariant’s whistleblower woes

14 Feb 2022

Concise views on global finance: The $6 bln Swiss chemical firm’s shares fell by as much as 20% after it delayed 2021 results due to an accounting probe.

Rio’s culture rot puts investors on the spot, too

14 Feb 2022

The miner’s endemic racism, sexism and bullying is a wider wake-up call. Shareholders tend only to push firms for board diversity and equal pay. Yet a dysfunctional workplace runs deeper, affecting earnings and even M&A. It’s time social failings got some climate-style activism.

Naturgy split may be less than sum of its parts

11 Feb 2022

The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.

Credit Suisse self-flagellation is risky but right

10 Feb 2022

The Swiss bank lagged rivals as revenue fell 12% in the fourth quarter. That’s partly because CEO Thomas Gottstein is putting safety first. The danger is that clients flee and star bankers defect after bonuses shrank by 32%. Yet avoiding future mistakes is the top priority.

Pru CEO change puts HSBC and StanChart on the spot

10 Feb 2022

Mike Wells is retiring after shaking up the $46 bln insurer and redirecting its focus to emerging markets. Whoever replaces him will be based in Asia instead of London. Where the top brass sit depends on many variables, but the job is harder to do far from the main hub.

Mediobanca’s fortunes are tied to Generali

9 Feb 2022

The bank’s 13% stake in the Italian insurer accounts for a third of its net profit. Mediobanca could sell the 3.8 bln euro shareholding to finance deals, but targets are expensive. Even if CEO Alberto Nagel loses a boardroom battle at Generali, his financial future rests on it.

Peloton gear-change starts with stock, not CEO

8 Feb 2022

Drafting in ex-Spotify executive Barry McCarthy may help the fitness company tone up. But founder John Foley’s voting power limits Peloton’s options. Other firms fared better after ditching supervoting stock. Foley could revive Peloton and his fortune by doing likewise.

BP inserts wind in sails of its energy transition

8 Feb 2022

The $110 bln UK group joined oil peers in reporting bumper results. But it also pledged to maintain fossil fuel profitability despite cutting output, and gave new 2030 targets for its low-carbon growth business. That could start to revive its becalmed valuation.

BNP Paribas’ growth push merits investor jitters

8 Feb 2022

The 81 bln euro bank wants to boost revenue to help hit an 11% return target. But CEO Jean-Laurent Bonnafé’s plan hinges on uncertain investments and buoyant markets, while a cut-price valuation betrays shareholder doubts. Deeper cost cuts would make his goals more credible.

Why Spotify’s Daniel Ek is sticking with Joe Rogan

7 Feb 2022

The streaming group’s CEO condemned the talk show host’s use of racial slurs but refused to axe him. Ek is betting that financially motivated music labels will resist artist boycotts, and that users are locked in. Rogan represents a podcast pivot that’s key to boosting earnings.