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Tech

Capital Calls: Royal Mail, Europe’s chip champion

20 Jul 2022

Concise views on global finance: Britain’s postal provider is eyeing a potentially messy separation, but a nationalisation would make more sense; shares of ASML, which provides cutting-edge machines for chipmaking, look more appealing despite inflation and geopolitical worries.

Edtech giant faces hard slog on its M&A field trip

19 Jul 2022

Byju’s, India’s most valuable startup, is eyeing U.S. higher-learning specialist 2U in the latest period of both firms’ deal frenzy. It’s betting education technology can be outsourced to its home country. If wrong, Byju’s will be an M&A version of a Dr. Frankenstein experiment.

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.

Japan strains to populate its sparse unicorn farm

4 Jul 2022

As economic troubles mount, Prime Minister Fumio Kishida wants the country’s $1.5 trln pension fund to play venture capitalist to help create more startups like SmartNews and Spiber. It will take far more than government money, however, to incubate entrepreneurial spirits.

Baidu video sale hints at a China tech plot twist

16 Jun 2022

The search-engine operator may divest its Netflix-like streaming arm in a $7 bln deal. Ordinarily rivals like Tencent would welcome the opportunity, but the recent anti-trust crackdown will deter them. That clears the way for otherwise unlikely bidders, including state companies.

Samsung opens its wallet to a wary chip market

16 Jun 2022

Boss Jay Y. Lee's European trip has sparked hope that the South Korean conglomerate will finally use its $84 bln cash pile for M&A. Beat-up valuations at mooted targets like NXP make consolidation attractive. Appeasing concerned governments, though, will be a tough sell.

New York hybrid working woe, Toshiba’s options

9 Jun 2022

The work from home revolution looks here to stay with nearly 80% of surveyed employers accepting it as the new norm. In this Viewsroom podcast, Breakingviews columnists discuss how this will be painful for office landlords. Plus, the $22 bln Japanese company’s mysterious future.

Boots deal will add to Reliance’s retail black box

9 Jun 2022

The Indian conglomerate submitted a binding bid for Walgreens’ UK pharmacy chain in a consortium with Apollo. It’s a big pivot for Mukesh Ambani. Opacity around his retail expansion and a determination to win at all costs are a worry. Bulking up will make things worse.

Capital Calls: JetBlue makes winning Spirit hurt

6 Jun 2022

Concise views on global finance: The hostile bidder has offered cash up-front for Spirit shareholders, which could force current suitor Frontier to make costly concessions.

Tech convertible boom was a tax on the gullible

3 Jun 2022

Fast-growing firms including Affirm, DraftKings and MicroStrategy issued $100 bln of zero-coupon convertible debt over the past couple of years. Holders get no interest, taking instead an option that’s now in many cases near worthless. Some may not even recoup their principal.

Capital Calls: Microsoft micromanages tech jitters

2 Jun 2022

Concise views on global finance: A 1% revenue shortfall because of a strong dollar normally isn’t that important. Microsoft’s warning reflects how nervous tech investors have become.

Venture royalty bets $4.5 bln on self-disruption

26 May 2022

Andreessen Horowitz’s new crypto fund comes less than a year after its last one. The former backer of Facebook and Airbnb reckons blockchain-based giants will conquer the web by rewarding users. If true, that should also mean less money for venture capitalists.

Shopify’s governance revamp is so 2021

26 May 2022

Shareholders are being asked to give Tobi Lütke the ability to keep his voting power even if his ownership stake falls. That might have been palatable at the end of last year, when Shopify’s shares were worth five times as much as they are now. Now it just adds insult to injury.

Unicorns’ hard times point to M&A stampede

25 May 2022

Of the 2,300 private firms with valuations above $1 bln in the past decade, one-third managed to go public. Volatile markets now make that door inaccessible. As investors seek proof in their paths to profit, combining forces with rivals is the least-bad option.

Alibaba’s overseas growth push faces European test

25 May 2022

The $223 bln Chinese e-commerce giant hopes to offset sluggish growth at home by expanding in the region via its Southeast Asian offshoot, Lazada. But with a European market share of less than 5%, and entrenched rivals like Amazon, Alibaba may struggle to justify the investment.

Xiaomi epitomises risks of supply chain buffering

20 May 2022

The Chinese handset maker and peers weathered component shortages by stockpiling. Xiaomi's shrinking quarterly sales of $11 bln, and a net loss, make clear how the country’s Covid-19 lockdowns are hurting consumers. A reckoning of bloated inventories and falling demand awaits.

Deal odds in the face of market pain

19 May 2022

Market pain is changing the math for arbitrageurs, as targets' shares may drop further if mergers fail. A Breakingviews calculator shows the odds of a deal going through. Run the numbers here.

Hong Kong can afford slow road to digital currency

19 May 2022

There’s some FOMO in the local e-HKD effort. Central banks elsewhere have better reasons to act faster, including low rates of financial inclusion and less use of physical cash. Hong Kong would do well to think longer about privacy concerns and to learn from other experiments.