Software

Wirecard UK saga exposes payments regulation holes

1 Jul 2020

Clients of the collapsed group’s British arm had their accounts frozen while the watchdog tried to pin down its cash balances. That hurt blameless retail customers. Supervisors urgently need a way to monitor payments firms more closely before they get into trouble.

Wirecard collapse is real-life fintech stress test

25 Jun 2020

The German group is filing for insolvency a week after saying $2 bln of cash was missing. Its collapse will test whether fast-growing and lightly regulated payments firms can fail without damaging customers or other lenders. The fallout has consequences for the entire sector.

VMware spin would repair Dell’s complexity damage

24 Jun 2020

The $36 bln IT group may off-load its $50 bln majority stake in separately listed VMware. Logic suggests first extracting cash to reduce debt and then spinning VMware off to Dell’s shareholders. That would clean up balance sheets and governance, probably boosting both valuations.

Yandex picks good time to untangle from Sberbank

24 Jun 2020

The Russian search engine will pay $600 mln for the bank’s stake in their e-commerce tie-up and exit their payments unit. With shares up, funding this with $800 mln from investors like Roman Abramovich makes sense. Sadly, immunity from Kremlin meddling isn’t part of the deal.

Chinese gay dating IPO makes rainbow connection

23 Jun 2020

BlueCity, valued at $300 mln in 2014, wants to go public in New York. Its Grindr-meets-Facebook app caters to low-key but thriving LGBTQ communities. Fast growth has enabled founder Ma Baoli to expand in Asia. Sustained success depends on shifting political and social attitudes.

Wirecard’s bankers might as well keep it alive

22 Jun 2020

ABN Amro, Commerzbank and others could tip the payments group into insolvency by calling in 2 bln euros of loans. Given Wirecard’s lack of cash and tangible assets, they might not get their money back. Better to see if new CEO James Freis can salvage something from the wreckage.

Wirecard could prove a nail in BaFin’s coffin

22 Jun 2020

Despite repeated allegations of fraud at the payments group, the German watchdog until recently focused on short-sellers and journalists. The scandal poses big questions about its oversight of Wirecard’s bank unit - and about financial regulation in Europe’s largest economy.

Wirecard scandal turns into an existential crisis

18 Jun 2020

Markus Braun’s payments group lost over half of its market value after EY found indications that 1.9 bln euros of cash balances might be “spurious”. Loan covenants may be triggered, threatening its access to finance. Regulators, lenders and auditors have lots of explaining to do.

Corona Capital: Carnival, Cheap funds, Salmon

18 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: What lies on the horizon for the cruise operator; locking in cheap financing; and a fishy tale of coronavirus-related swings in demand.

Europe’s latest Apple bite is close to the core

16 Jun 2020

The EU’s antitrust tzar Margrethe Vestager worries that the $1.5 trln group’s app store and payments product hurt competition. With smartphones at saturation point, such add-on services underpin Apple’s rosy valuation. Shareholders should be more worried than in past probes.

Wirecard CEO is approaching his day of reckoning

16 Jun 2020

The $14 bln payments group is due to publish its delayed 2019 annual results on Thursday. If EY flags issues with its accounts, Markus Braun’s position will be untenable. Even the auditor’s seal of approval may not save the chief executive from investors who want him out.

IBM makes a virtue of facial-recognition necessity

9 Jun 2020

New CEO Arvind Krishna is ending the $117 bln firm’s attempts to develop the technology and questioning whether police should use it. Companies rarely abandon potential profit for PR wins, but it’s easier when operations are small, rivals pull ahead, and regulation threatens.

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.

Complacency is as much a disruptor as antitrust

8 Jun 2020

Big Tech critics credit the 1969 push to break up IBM for spurring the today’s software industry. But it was as much Big Blue’s shortsightedness that led to others’ power. As probes of newer tech companies ramp up, Microsoft, with similar challenges, tells a more promising story.

Phones will restore freedom at the cost of privacy

30 Apr 2020

Contact-tracing apps like Apple-Google’s will allow more public mobility but only if related testing is quick and easy, and everybody plays ball. That means democracies will wave sticks, disguised as carrots, to encourage use. Good results would outweigh the Orwellian overtones.

Payment companies will emerge as lockdown winners

3 Apr 2020

Reluctance to touch banknotes and fewer chances to spend them are speeding the shift to digital money. The $1.9 trln global industry will take a short-term hit from lower volumes. But once the pandemic eases, cash will be less relevant. The likes of Adyen and Nexi should benefit.

Lockdowns mean heartburn for meal-delivery market

16 Mar 2020

The $123 bln sector, which includes Uber and Meituan, may sound like a winner as the coronavirus keeps diners indoors. Yet the key office-lunch market is collapsing, and panic buying has filled home kitchens with groceries. Paying sick drivers will add to the financial strain.

Zoom’s work-from-home bump will lose appeal

27 Feb 2020

The $28 bln video-communications firm’s stock has shot up more than 60% in a month, as coronavirus prompts a surge in telecommuting. That suggests a deluge of new users, but also requires them to stick around. It’s somewhat defensible, until working from home loses its charm.

Intuit shows how to tame a fintech unicorn

25 Feb 2020

The $75 bln owner of TurboTax will pay over $7 bln for finance portal Credit Karma. As personal finance gets disrupted, established firms are realizing they can either join in or stand aside. But the large sums at stake mean there’s no free lunch for consumers.

Schneider puts hefty price tag on green M&A

13 Feb 2020

The French industrial company has offered $1.5 bln for Germany's RIB Software, which tracks builders' power usage. The deal taps into the growing value of energy efficiency. But without cost savings, CEO Jean-Pascal Tricoire needs punchy sales growth to justify a high premium.