Technology

Revolut-SoftBank fight exposes VC share artifice

22 May 2023

The fintech group may only win a UK banking licence if it gets rid of preference stock held by the Japanese investor. Similar structures are common in startup land, and help justify puffed-up valuations like Revolut’s $33 bln price tag. The fracas shows they also have a downside.

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.

AI boom could expose investors’ natural stupidity

19 May 2023

Corporate leaders and money managers are jumping on the artificial intelligence bandwagon. The study of behavioural economics suggests people are easily carried away by hype. Some of the limits of human reason may also apply to supposedly smart machines, writes Felix Martin.

How do you solve a problem like AI? Tax it

18 May 2023

Generative artificial intelligence could put a rocket up company profits, and potentially leave millions jobless. The economic and social disruptions could be profound. But fiscal distortions make it hard to tide over the losers. Closing obvious loopholes is growing more urgent.

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.

Activision is victim of clashing trustbuster whims

16 May 2023

Microsoft’s bid for the “Call of Duty” maker won Europe’s approval, with concessions, after UK and US regulators pushed back. International enforcers’ divergence on whether companies can offer fixes for deals they don’t like could be an impossible hurdle for big-ticket M&A.

Why the jobs market could brush off AI threat

16 May 2023

Hiring seems to be waning in the US and Europe. Yet in this Exchange podcast, recruitment boss Sander van ’t Noordende strikes a hopeful note. The Randstad CEO explains why artificial intelligence and a possible economic slump are doing nothing to dampen demand for talent.

Big Tech’s AI victims will fall fast

12 May 2023

Online education company Chegg is suffering as students lean on artificial intelligence to help with homework. Hollywood writers are paranoid. While AI is accruing value to Big Tech, smaller companies will quickly – and once again – be annihilated by well-capitalized tech firms.

AI offers leisure, if not happiness

12 May 2023

Technology has outpaced economic growth for 50 years, while workers have long traded higher productivity for more leisure. These trends will continue as artificial intelligence automates more jobs. The salient question is how to distribute the gains – and the free time.

PayPal’s struggles make case for bold CEO choice

11 May 2023

Boss Dan Schulman is leaving a longer and tougher to-do list for whoever replaces him at the $71 bln digital wallet provider. Disappointing results sent the shares tumbling another 16%. It’s increasingly evident that a shakeup led by a creative-thinking outsider would be best.

German software buyout battle hits investor glitch

10 May 2023

Bain Capital has launched a 2.5 bln euro knockout offer for IT group Software AG. But the target seems oddly happy to stick with a lower bid from existing backer Silver Lake. Shareholders can either take an inferior price or risk a messy stalemate.

Fuddy-duddy Meta has a kid problem

5 May 2023

The FTC wants to bar the $613 bln company from monetizing young users’ data. But Zuckerberg’s audience is already among the oldest of social media apps. He not only has to figure out how to get kids and keep them. He has to do it in a way that builds trust.

Lyft steers closer to an Uber-takes-all world

4 May 2023

Already far behind its bigger US ride-share rival, Lyft’s dismal profit forecast makes the difference even starker. And with Uber so much more profitable, each dollar of market share Dara Khosrowshahi snatches could boost his firm’s value by multiples of what his rival would get.

Apple’s balance sheet is golden and delicious

4 May 2023

The iPhone maker ended the quarter with $57 bln of net cash, despite pledging five years ago to cut its hoard down to size. Investors ought to be glad it didn’t. Rising interest rates put Apple in a juicy position to reinvest its money and push deeper into financial services.

Capital Calls: Unilever, Shopify

4 May 2023

Concise views on global finance: The consumer goods company may need to backtrack on a pay package for its incoming CEO to quell a shareholder revolt; shares in Canadian e-commerce firm Shopify shot up over 20% after it said it was selling its logistics business to Flexport.

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.

Airbnb swerves tech rout with constant change

2 May 2023

The $77 bln travel company weathered the pandemic and is now navigating a tech valuation bloodbath. Its co-founder Nathan Blecharczyk told The Exchange podcast that lessons learned during Covid-19 about disruption and never sitting still are key to its future.

Capital Calls: OpenAI’s backers

1 May 2023

Concise views on global finance: The ChatGPT developer has secured $300 mln from venture giants including Andreessen Horowitz, according to TechCrunch. As it rounds up scarce funding from tech’s biggest names, competitors will find it harder to break through.

The game’s on, not over, for Activision Blizzard

1 May 2023

Microsoft has vowed to fight for its $69 bln takeover despite regulatory opposition. Even if the deal collapses, however, the developer behind “Call of Duty” would be armed with $15 bln of cash, including the break fee. It’s plenty of firepower to wage a stand-alone war.

Amazon gets ever more like a regular ol’ retailer

27 Apr 2023

The $1.1 trln e-commerce giant grew sales of goods faster than expected. Yet its star, AWS, is under pressure. Boss Andy Jassy is focusing increasingly on profitability. It's a familiar cycle for big retailers – but not previously for Amazon.