Transportation

Gulf oil risk response looks too sanguine

13 Jun 2019

The price of Brent crude jumped 2.5% after attacks on two tankers near the critical Strait of Hormuz. The U.S. secretary of state blames Iran. With oil still barely above $60 a barrel, the market reaction to this tense situation looks mild. That puts a lot of faith in cool heads.

Uber analysts ride dreams to common destination

4 Jun 2019

They expect the $70 bln ride-hailing app to lose money for years but see various grounds for optimism, from cross-platform synergies to flying cars to demographics. Yet most roads lead to a forecast price upside of around 25%. It’s Wall Street’s form of herd immunity.

Fiat’s French appeasement game is means to an end

3 Jun 2019

Chairman John Elkann is mulling concessions to get the French state to greenlight the $35 bln Renault merger. A board seat for Paris and some cash shouldn’t risk planned cost savings, or Nissan’s assent. It’s a small price to pay for first-mover advantage in car consolidation.

Arduous road awaits refueled Chinese used-car app

29 May 2019

Uxin is issuing $230 mln of convertible bonds, including to existing investors TPG and Warburg Pincus. It follows a 70% loss in market value since last year's IPO. A short attack, China’s slowdown and generous terms make it hard to see the deal as accurately calling a bottom.

Fiat-Renault deal leaves Peugeot in the M&A dust

28 May 2019

The $21 bln auto group looks strategically boxed in now its Italian-American suitor may pair with French rival Renault. CEO Carlos Tavares could try Indian-owned Jaguar Land Rover or General Motors. Yet both Plan Bs lack the $6.3 bln of cost savings he’s missed out on with Fiat.

Car industry second-stringers lock arms to compete

26 May 2019

Renault and Fiat Chrysler are crafting an alliance that could let them cut costs, pool technology and better bargain with rivals. Even without merging, savings could be worth more than Renault’s 15 bln euro market value. Former Fiat boss Sergio Marchionne’s dream is coming true.

UK rail IPO comes with noisy fellow travellers

22 May 2019

KKR may float travel-booking company Trainline, used by Brits to book coach and train tickets, for $2 billion. It’s a rare IPO that is growing quickly and generating cash. The problem is that Trainline is pulling into the station soon after a few high-profile UK tech flops.

Greyhound breakup is worth the trip

20 May 2019

Activist Coast Capital wants the U.S. coach chain’s parent FirstGroup to spin off its loss-making UK parts and stop bidding for rail franchises. Pension liabilities and valuation debates complicate matters. But even on a pessimistic view, investors could double their money.

Growth IPOs exploit total addressable credulity

13 May 2019

Uber says its “total addressable market” is $12.3 trln. Lyft is less exuberant, claiming a mere $1.2 trln TAM, while one estimate of WeWork’s global real-estate opportunity hits over $200 trln. Such heady figures show ambition, but investors need to address the built-in hype.

Nissan could easily tempt a bold activist

13 May 2019

The $31 bln carmaker is resisting deal talks with Renault. An arm’s-length arrangement favoured by boss Hiroto Saikawa will only weigh on Nissan’s value. Pushy investors have been chipping away at corporate Japan. One able to handle the politics could help make the case for M&A.

Uber’s dull thud may startle unicorn herd

10 May 2019

The ride-sharing service’s shares opened below its subdued IPO price, valuing the company at around $70 bln. Markets had a rocky week, but the lack of excitement for the biggest listing of a U.S. tech company since Facebook is a warning that investors are becoming more choosy.

Uber’s losses are nothing like young Amazon’s

8 May 2019

Some of the ride-hailing app’s boosters push a comparison with the e-commerce giant’s history: hefty losses now lay the foundation for a future profit juggernaut. That’s the wrong financial statement to look at, though. Amazon’s success and Uber’s trouble are rooted in cash flow.

Lyft takes some gas out of Uber’s IPO

7 May 2019

The smaller ride-hailing app beat revenue estimates with its first post-listing results and burned less cash. But growth is slowing, making profit a more distant goal for the $17 bln firm. That, and a fresh wobble in the stock, flash a hazard light for its big rival’s offering.

Musk’s roundabout finance runs on short sellers

7 May 2019

The Tesla CEO reduced some pressure by raising $2.7 bln of capital. But he relied heavily on convertible bonds, a vehicle dominated by the very traders he despises. And ditching long-held financial goals for robo-taxis bolsters the bears’ case against his electric-car outfit.

Uber’s trucking is at best a very long haul

7 May 2019

The ride-hailing app’s freight unit, 3 pct of revenue in 2018, is a growth focus as it prepares its IPO. Connecting shippers to carriers has potential but there’s a driver shortage. Uber already offered incentives. As elsewhere at the firm, the costs of expansion could spiral.

Buyers beware Uber’s slower growth, bigger losses

26 Apr 2019

The ride-hailing app wants an IPO market value of up to $84 bln before dilution, reflecting the share-price slide of rival Lyft. Uber also lost $1 bln in the first quarter, on a top line only 20 pct up on last year. The big question: whether its heavy investment ever pays off.

PayPal’s ride-share with Uber may be bumpy

26 Apr 2019

The $129 billion payments company could pick up some decent new business by investing $500 million in the ride-hailing firm’s IPO. But Uber is a riskier bet than other firms PayPal has taken stakes in. CEO Dan Schulman could be in for an uncomfortable journey.

Hyundai Motor’s U-turn may stutter in South Korea

25 Apr 2019

The $29 bln automaker's first quarter sparkled, good news after a loss the previous period. New models revved sales despite a slowdown in China and U.S. safety issues. Worsening economic conditions in its home market, however, could put this turnaround into a spin.

At least Uber investors will have a say on losses

24 Apr 2019

The ride-hailing app touts a separate chair and CEO, one vote per share and annual director elections. Rival Lyft and image-search firm Pinterest by contrast have insiders with supervoting stock and staggered boards. All lose money but only Uber shareholders can push for change.

Alpine stability helps Swiss scale IPO peak

23 Apr 2019

Train maker Stadler and medical devices group Medacta raised a combined $1.9 bln in Zurich listings this month, defying a European market becalmed by Brexit and trade woes. Relative stock market strength is fuelling the rush. As valuations flatten, other venues will catch up.