Technology

Meta exposes danger of trustbusting virtual risks

1 Feb 2023

Facebook’s owner won in court over U.S. efforts to block its acquisition of fitness-app developer Within. It trips up regulators trying to avoid missing another Instagram, with judges unpersuaded by future competition worries – a bad omen for the FTC’s case against Microsoft.

Intel points cost-cutting laser in wrong direction

1 Feb 2023

Turning around the embattled $117 bln chipmaker requires capital and an inspired workforce. Slashing managerial pay by 5%-15% will save money, but risks demoralizing staff and losing the best of them. Suspending a $6 bln dividend would conserve cash in a more effective way.

Capital Calls: McDonald’s, Spotify

31 Jan 2023

Concise views on global finance: The burger chain’s comparable sales growth despite rising prices proves there’s pricing power at the bottom of the market; shares in the $21 bln music-streaming service leapt after founder Daniel Ek unveiled rapid subscriber growth.

Intel is becoming accidental ad for friendshoring

27 Jan 2023

With plunging fourth-quarter sales and profitability, the U.S. firm may fall further behind Taiwanese rival TSMC in technology and manufacturing prowess. Intel has strategic value to a White House keen to promote U.S. chipmaking, but there are other ways to achieve that goal.

Meme stocks give bankruptcy new excitement

26 Jan 2023

When a company like Bed, Bath & Beyond lurches towards failure, investors try to reckon what it would be worth after a cleanup. That’s harder when retail traders push its stock to unexpected highs, as happened to car rental firm Hertz. What was once a science has become a game.

High-flying airlines still face stiff headwinds

25 Jan 2023

EasyJet shares surged on improved expectations, as rising numbers of holiday-goers look set to push the sector back into the black. But recent meltdowns show air travel has an increasing problem with tech glitches. It’s premature for investors to settle back in their seats.

Rough chip waters give ASML little room for error

25 Jan 2023

The Dutch giant expects sales to grow by a chunky 25% in 2023. Clients’ fear of missing out on an economic rebound is propping up demand for its equipment. Yet rising costs and the risk of a widening export ban to China may take the shine off the $264 bln group’s rich valuation.

Microsoft’s revenue sniffles are tech’s flu

24 Jan 2023

The software developer's growth rarely falters, but its 2% top-line expansion was the slowest in 22 quarters. Customers who overinvested during the pandemic are now retrenching, even on Microsoft’s software staples. It’s a poor omen for firms built on more dispensable offerings.

Google ad lawsuit reaches back to the future

24 Jan 2023

The Alphabet-owned search giant is in hot water with U.S. prosecutors who say its digital ad business is anticompetitive, citing deals it did 15 years ago. Google may be dominant, but regulators let it get that way. Meanwhile, the market has already started to create its own fix.

Capital Calls: VC bunks up

24 Jan 2023

Concise views on global finance: Josh Kushner’s deal to sell a stake to investors, including KKR’s Henry Kravis, values his firm at $5.3 billion just as startups are at an inflection point. 

Amazon creates bazaar for U.S. banking wannabes

24 Jan 2023

The e-commerce titan’s latest debt, an $8 bln loan, is curious, but not as much as the foreign institutions providing it. Australia’s ANZ, Spain’s BBVA, Singapore’s DBS and others rarely turn up in such deals. The likelihood of them leveraging this one into more business is slim.

EU debt fears hinder U.S. green subsidies riposte

24 Jan 2023

Ursula von der Leyen has pledged a European response to protectionist U.S. energy handouts. The European Commission president can improve permitting speed and offer token subsidies. But her best weapon, a permanent form of the EU-wide pandemic bond-sale programme, is far off.

Salesforce’s activists have an easy job

23 Jan 2023

Corporate cage rattler Elliott took a stake in the $150 billion tech firm alongside Starboard. They might want board seats or say in founder Marc Benioff’s successor. But the company is a better builder than buyer. With growth out of fashion, that’s naturally a good place to be.

Bank earnings become a post-Covid parlor game

23 Jan 2023

After three years of upheaval, JPMorgan, Bank of America, PNC and other lenders are waiting for customers and markets to revert to type. Some think bad debts, spending and trading will level out; others aren’t so sure. It leaves executives in a bind, and investors in limbo.

Layoffs take Big Tech back to more modest future

20 Jan 2023

Alphabet has joined the ranks of U.S. technology firms cutting staff, with roughly 5% looking like the norm. Job openings are shrinking fast too. Proposed trims only partly cut back the 420,000 workers added since Covid-19 hit. The industry will still emerge bigger than it was.

Battered fintech sector’s next play: sell ads

20 Jan 2023

Erstwhile financial technology stars like $47 bln Block and Klarna are suffering from falling valuations and slowing sales. Yet they’re sitting on potentially valuable insights about punters’ spending habits. That points to an opportunity in helping retailers reach their users.

Netflix will gain from Facebook and Google pain

19 Jan 2023

The TV-streaming service is rolling out an ad-supported plan just as the tech titans lose digital market share. Making the strategic shift work will now be partly up to new co-CEO Greg Peters. At least Reed Hastings helped put the company in position to nab social-media spending.

Indian IT reboots in time for an easy recession

19 Jan 2023

Quitting workers hurt profitability at service providers from Tata to Cognizant. But the drying up of startup funding has reduced job hopping. That will make any slowdown in spending by global clients easier to manage, leaving India to keep taking market share, at least for now.

Capital Calls: Activism, Bond spat, Airline M&A

18 Jan 2023

Concise views on global finance: Aggressive shareholder campaigns picked up in 2022, but activism is becoming an overcrowded strategy. Meanwhile, M&A machine Melrose takes on a fight that might not be worth winning, and German airline Lufthansa eyes a stake in Italy’s ITA.

Emerson’s hostility tests aggressive M&A tools

17 Jan 2023

Disclosing its unsolicited $6.9 bln offer for NI ends a quiet eight-month standoff. Going public forces the issue, but along with the target’s strategic review also inflates the price. A bid battle threatens the potential value of a deal and may inform takeover tactics elsewhere.