Technology

Buyout barons’ M&A freeze will soon thaw

9 Mar 2022

After hitting $469 bln in 2021, private equity acquisitions of public companies have slowed. Volatile markets due to the Ukraine war and rising rates make deals harder to fund. Yet depressed stock markets mean beaten-up technology and healthcare firms are now juicier targets.

VCs are victims of their own success

8 Mar 2022

That’s an argument author Sebastian Mallaby makes in his new book on the financiers behind the world’s technology giants. He also discusses the role of luck, founders’ increasing power, late-stage investment pile-on risks and Chinese tech in this episode of The Exchange podcast.

Yandex bond woes are first step to state takeover

7 Mar 2022

The U.S.-listed Russian tech group may default on a $1.25 bln debt. Even if it cuts a deal with creditors, the economic hit from sanctions will crush its revenue from e-commerce and selling ads. President Vladimir Putin’s internet goals make eventual nationalisation likely.

Russia’s reverse globalisation will test Putin

7 Mar 2022

The country spent three decades integrating into the global economy. The president’s invasion of Ukraine threatens to wind the clock back within weeks. How the nation copes without Western technology, capital and consumer goods will help decide whether Vladimir Putin backs down.

Barcelona’s 5G hype is recipe for hyperventilation

4 Mar 2022

Telecoms bosses converged on the Spanish city this week after a two-year hiatus. From robot dogs to holographic compères, the tech-fest painted a utopian view of a wired future. For CEOs like Vodafone’s Nick Read, the difficulty is making it happen while also making money.

Russia crisis is Big Crypto’s coming-of-age moment

3 Mar 2022

Major exchanges like Coinbase and Binance are still open to Russians despite the risk of sanctions evasion. If they fail to spot illicit transactions, regulators will crush the life out of them. If they pass the test – and they might – it may be their ticket to the mainstream.

West’s best cyber move is to stick to defence

3 Mar 2022

Malware attacks on Ukrainian banks and state agencies make better protection for governments and companies essential. Western nations may consider retaliation. Given the shortage of cyber experts and the risk of badly targeted strikes, they’d be better off focusing on defence.

Ericsson Iraq snafu dents already-shaky M&A logic

2 Mar 2022

The telecom kit maker’s shares fell 12% after U.S. authorities said it broke a deferred prosecution agreement over possible payments to Islamic State. A large fine would make the $6.2 bln acquisition of Vonage more risky. That puts pressure on CEO Börje Ekholm to find a way out.

Meituan sums up struggle to solve Beijing riddles

2 Mar 2022

The food-delivery giant lost $28 bln in market value after regulators suggested last month that merchant charges should be cut. State media later downplayed the guidance, but now the company is lowering some fees. It’s a classic case of why investing in Chinese tech is so hard.

Ukraine puts power of U.S. tech firms on new level

28 Feb 2022

Facebook is fighting Russian hackers while SpaceX is providing internet access. Such communications services are critical in a war. It’s easy for the CEOs concerned to take one side with little risk to revenue from the other. Next time, the incentives could be more complicated.

Capital Calls: Buffett, Sanctions, Defence, Canada

28 Feb 2022

Concise views on global finance: The Oracle of Omaha has seen value in his company’s own stock; Switzerland breaks with traditional neutrality over Ukraine; military-equipment stocks are surging; and Ottawa may let the Rogers-Shaw telecom merger follow a discouraging U.S. path.

Russia is dry run for bigger China sanctions test

25 Feb 2022

The threat of penalties didn’t stop Vladimir Putin from invading Ukraine. Sanctions would have even less chance of preventing China from taking control of Taiwan. The deeper the trade ties, the greater the chance of self-harm. And China has a head start in creating workarounds.

Trump’s Truth Social is an overvalued threat

25 Feb 2022

The former U.S. president launched his social media app after Twitter and others booted him from their platforms. Twitter’s slowing growth suggests he might be able to capture a unique following. But based on its users, its $20 bln market cap is at least double fair value.

Alibaba’s $400 bln selloff makes case for buybacks

24 Feb 2022

The Chinese giant delivered a dismal set of results with sales at its core business falling for the first time. After a 60% drop in the stock over the past year, a big repurchase would send a signal of confidence. With $60 bln of net cash, Alibaba can afford to splurge on itself.

China tutors brave class on corporate reinvention

23 Feb 2022

An education crackdown decimated businesses like New Oriental, which laid off 60,000 staff and reversed into a $876 mln half-year net loss. Its new ventures include e-commerce. Yet tales of extreme diversification by startups can end well in nimble corporate China.

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.

Palantir needs profit, not pomposity

17 Feb 2022

CEO Alex Karp says he built the software firm for the U.S. war-fighter, and secondarily for the “glory of humanity”. Rhetoric and revenue growth might have been sufficient when animal spirits were high. Now investors just want to know when the 18-year-old firm will turn a profit.

Capital Calls: Continental split

17 Feb 2022

Concise views on global finance: The $20 bln German auto supplier is eyeing a four-way separation, according to a report.

Shopify plays to one trend, bucks another

16 Feb 2022

The Canadian e-commerce firm’s shares fell after it said it’s shifting towards a more Amazon-like model of operating warehouses. Having surfed the online shopping wave, Shopify risks losing investors who have chased the asset-light tech craze too.

Roblox metaverse premium gets real-world downgrade

16 Feb 2022

The gaming platform attracted more users in January, but nearly flat bookings of virtual currency knocked 25% off its shares. Video games can be faddish, and kids’ obsessions even more so. Doubt about Roblox’s ability to turn attention into cash merits a more mundane valuation.