Transportation

Alibaba trades margins for clarity in logistics

26 Sep 2017

The tech giant is paying about $800 mln to lift its stake in logistics arm Cainiao slightly to 51 pct. Keeping the unit at arm’s length had prompted SEC scrutiny. But absorbing the capital-intensive and loss-making Cainiao into the parent’s accounts will weigh on margins.

Uber may be low on fuel for London fight

22 Sep 2017

The UK capital has decided not to renew the ride-hailing app’s licence, citing an irresponsible approach to safety and security issues. Boardroom upheaval makes it harder for Uber to address the concerns credibly, while a dented image could undermine Londoners’ enthusiasm to help.

Siemens-Alstom train-deal economics trump politics

21 Sep 2017

The German firm may merge its train unit with the French peer Alstom, rather than Bombardier. That would create a global player in high-speed rail, but leave Siemens in an awkward embrace with joint-owner French government. It’s a price worth paying to create a European champion.

China’s grand plans help Advent to shore in Brazil

8 Sep 2017

The buyout firm is selling port operator TCP in a $1 billion deal. That is a good outcome after a recession and a currency rout, and the target fills a strategic gap for its Chinese state-backed buyer. China’s trading ambitions mean more overseas port deals should follow.

Cathay’s ugly first half points to further woes

17 Aug 2017

Cathay Pacific has posted its worst half-year loss in at least two decades. Despite attempts to cut costs, the Hong Kong carrier is still locked into costly fuel hedging contracts and faces tough competition. Investors shouldn’t expect a return to profitability any time soon.

Grab rides two trends to $6 bln valuation

24 Jul 2017

The taxi app is raising $2.5 bln in Southeast Asia’s biggest fundraising. It helps that Japan’s SoftBank is investing in unicorns everywhere and that Didi, like China's other tech giants, is chasing growth nearby. The funds will make it harder for Uber to conquer the region.

China’s latest logistics IPO is hard to unpack

27 Jun 2017

Alibaba-backed Best Inc could raise $1 bln in New York, a few months after a rival's disappointing debut. The loss-making group is faster-growing and more diverse. But the extra complexity could make this a hard sell for already-wary investors.

Uber’s journey to good governance jerks to a start

13 Jun 2017

CEO Travis Kalanick will leave temporarily as the ride-hailing firm tries to impose order. An indefinite absence and putting a shrinking group of direct reports in charge are murky first steps. Finding an independent chairman should help, but the board could use a bigger shakeup.

Epic rally leaves China Evergrande on shaky ground

12 Jun 2017

The Hong Kong-listed developer is 2017’s best-performing major stock, up roughly 240 pct. Business is brisk, costly debt is being repaid, and a bold mainland listing is on track. It has also quit a distracting battle over rival Vanke. A $28 bln market cap still looks overdone.

HNA slowdown makes financial and political sense

5 Jun 2017

The Chinese conglomerate plans less M&A this year, after spending tens of billions of dollars on everything from aircraft leasing to a stake in Deutsche Bank. That should let managers get a handle on their vastly expanded empire. It’s a good time to adopt a lower profile, too.

EasyJet gives lesson in counter-cyclical aviation

16 May 2017

As European airlines engage in a costly battle for market share, the UK no-frills carrier is buying ever-larger aircraft. EasyJet’s cost advantage and the impending demise of weak rivals suggest boss Carolyn McCall is right to look beyond the short-term clouds.

Mexico drives a train through Trump border wall

29 Mar 2017

The $2 bln purchase of a Florida railway by miner Grupo Mexico is a timely reminder that the countries' relationship is not all one-way traffic. The outward-looking Mexico the deal exemplifies is better for U.S. business than the more hostile neighbor Trump's wall plan portends.

Investors too blasé about grim reaper’s scythe

23 Mar 2017

An activist bet the farm on 72-year-old Hunter Harrison turning around $43 bln railroad CSX in four years. Actuarial tables suggest a real danger he might not. CEOs are becoming grayer, meaning shareholders have become more willing to bear the risk of impromptu corporate changes.

Cox: Kalanick gives future Uber investors a lift

9 Mar 2017

The longer the impulsive founder remains at the wheel, the more apparent the flaws become at the $68 bln ride-hailing app. The jig is up on violating livery laws, as it may be on avoiding capex now that drivers understand depreciation. It's best all this happens before an IPO.

UK government wakes up to downside of gig economy

17 Feb 2017

Work created by the likes of Uber flatters Britain's unemployment rate. That was convenient to politicians after the financial crisis. The less palatable implications of a surging gig economy are now dawning on Westminster – a potential 3.5 billion pound gap in tax receipts.

Atkins $4 bln merger would be fragile construction

30 Jan 2017

A mooted tie-up between the UK engineering consultancy and unlisted U.S. peer CH2M has some logic, ahead of a likely rise in infrastructure spending. Yet WS Atkins shareholders will need some persuading. CH2M's lackluster performance would make its value a bone of contention.

Italy is a flytrap for activist investors

19 Jan 2017

The euro zone's third-biggest economy offers some ideal conditions for shareholder activism – and some great reasons to stay away. A fight between Elliott Management and railway-signal maker Ansaldo STS shows plenty of both.

Activist gets CSX train to run early

19 Jan 2017

Ex-Pershing Square partner Paul Hilal wants departing Canadian Pacific CEO Hunter Harrison to work his cost-cutting magic at the rival railroad firm. Grinding CSX's expenses down to a similar level could be worth more than $7 bln. Much of that value has already left the station.

Uber’s $70 bln value accrues mainly to customers

22 Dec 2016

Exiting cutthroat China should help, yet the ride-share giant may still lose $2.8 bln in EBITDA this year. Competition is tough even in U.S. cities like New York. Economics suggests Uber is valuable to its passengers. Turning a profit for investors, though, is a different story.

New Hertz CEO faces tough drive out of ditch

14 Dec 2016

Kathryn Marinello has a great résumé. The problem is that she's the $2 bln rental-car outfit's third boss in two years, and activist investor Carl Icahn looms in the back seat. Earnings just took a hit, leverage is high, and the sharing economy is undermining Hertz's model.