• Germany’s Celonis and France’s Cegid are bringing fundraising sizzle to European back offices, writes @LiamWardProud Link https://t.co/njrRRDH2TO
    ReutersBreakingviews Thu 03 Jun 2021 10:19

    Advocates of Europe’s technology scene have something to crow about these days. Consumer-facing fintechs like $50 billion Klarna and Britain’s Wise are mulling bumper market debuts, and the region’s startups raised a record sum last year. Two recent deals show that the sector is also plugging a once-gaping hole for upstarts that sell software to companies rather than people. Germany’s Celonis, whose technology helps businesses make use of their data, raised $1 billion at an $11 billion valuation read more . And France’s Cegid, which offers cloud-based software for retailers, has attracted KKR (KKR.N) with a near $7 billion price tag.

    That should assuage fears that Europe’s patchwork of fragmented markets would impair the growth of native business-to-business firms. The old argument was that American rivals would prevail by rolling out their products at scale at home before conquering Europe. Celonis’s customers, as well as European giants Vodafone (VOD.L) and Siemens...

  • Chancellor: This time isn’t different, but scarier Link https://t.co/gs6inCWx7O
    ReutersBreakingviews Thu 03 Jun 2021 10:09

    By any number of proven valuation measures American stocks are poised to deliver negative returns in future years. To believe otherwise is to suggest that “this time is different” – four of the most dangerous words in investing parlance. Active managers will have their day.

  • RT @Reuters: From @Breakingviews: Donut maker Krispy Kreme is going public again. Buying up franchises has boosted sales, but patchy perfor…
    ReutersBreakingviews Thu 03 Jun 2021 08:14
  • Chinese dental firm Angelalign Technology smiles its way to IPO, says @mak_robyn: Link https://t.co/u2Ht8To0tO
    ReutersBreakingviews Thu 03 Jun 2021 06:09

    Dental-braces maker Angelalign Technology is flashing its pearly whites ahead of a market debut. The Chinese maker of clear teeth straighteners plans to raise up to $375 million in a Hong Kong initial public offering. A $3.7 billion top-of-the-range equity value implies a punchy 54 times forecast next year’s earnings, IFR reports . Align Technology (ALGN.O), the $46 billion owner of rival Invisalign, trades at 45 times.

    Each claims roughly 40% of the Chinese market, according to research cited in Angelalign’s prospectus. The U.S. company, though, is struggling to grow there, blaming the pandemic, trade wars and “increased competitive activity”. The local challenger, meanwhile, delivered a 75% rise in 2020 adjusted net profit. One big edge is a vast Asian orthodontic database that allows it to tailor products for Chinese facial types.

    Smaller upstarts are also nipping at Angelalign thanks to advances in 3D printing technology. For now, though, the company is all...

  • The founder of Chinese online real estate broker Ke, Zuo Hui, left behind a 39% economic stake and 81% of the voting rights when he died last month. There’s no good reason for a family trust to wield such feudal control, says @ywchen1: Link https://t.co/9caO1S3ACM
    ReutersBreakingviews Thu 03 Jun 2021 06:04

    The late founder of $59 bln Ke left behind a 39% economic stake in his online real estate broker with 81% of the voting rights. There’s no good reason for a trust to wield such feudal control over a company. Converting the shares to common ones would be the right thing to do.

  • RT @Reuters: From @Breakingviews: Tokyo games are a COVID calamity. Beijing as the 2022 host is turning into a bitter referendum over human…
    ReutersBreakingviews Thu 03 Jun 2021 05:39
  • Beijing is trying to slow a blistering rally reinforced by foreign capital. The currency’s strength has yet to dent China’s goods surplus, but it could further saddle U.S. consumers with higher prices: Link @petesweeneypro https://t.co/K26m1DbKCQ
    ReutersBreakingviews Thu 03 Jun 2021 05:34

    Yuan bulls are putting pressure on U.S. President Joe Biden to figure out a way to walk back tariffs. The currency is on a blistering rally, reinforced by foreign capital. Its strength has yet to dent China’s trade surplus, but could further saddle U.S. consumers with higher prices.

    China used to depress its exchange rate to support cheap exports, long a bone of contention with American officials attempting to rebalance the trade relationship. These days, the country is making higher quality goods and importing more dollar-denominated commodities, so suppressing the yuan makes less and less economic sense. In recent years Beijing has had far more trouble keeping the renminbi (the currency’s official name) from overheating, and 2021 is proving particularly tricky.

    The yuan is now changing hands at around 6.38 per dollar, its strongest position in three years, having firmed nearly 12% since May 2020. China’s relatively attractive interest rates and recovering economy...

  • Yuan bulls prod U.S.-China trade talks, says @petesweeneypro: Link https://t.co/1Fq8ybAuTq
    ReutersBreakingviews Thu 03 Jun 2021 04:03

    Yuan bulls are putting pressure on U.S. President Joe Biden to figure out a way to walk back tariffs. The currency is on a blistering rally, reinforced by foreign capital. Its strength has yet to dent China’s trade surplus, but could further saddle U.S. consumers with higher prices.

    China used to depress its exchange rate to support cheap exports, long a bone of contention with American officials attempting to rebalance the trade relationship. These days, the country is making higher quality goods and importing more dollar-denominated commodities, so suppressing the yuan makes less and less economic sense. In recent years Beijing has had far more trouble keeping the renminbi (the currency’s official name) from overheating, and 2021 is proving particularly tricky.

    The yuan is now changing hands at around 6.38 per dollar, its strongest position in three years, having firmed nearly 12% since May 2020. China’s relatively attractive interest rates and recovering economy...

  • At a hefty 23 times revenue for its Generation Z-focused target, Etsy’s acquisition of secondhand clothes marketplace Depop hardly qualifies as bargain shopping, says @jgfarb Link https://t.co/BbbuLjhNSx
    ReutersBreakingviews Thu 03 Jun 2021 04:03

    Etsy’s (ETSY.O) acquisition of secondhand clothes marketplace Depop hardly qualifies as bargain shopping. The crafty company is paying some $1.6 billion, a hefty 23 times revenue for its Generation Z-focused target. Youth appealed to investors, who sent Etsy’s shares up more than 7%, or nearly as much in market value as the deal’s price tag.

    Fast-growing Depop’s $70 million top line represents only about 10% of its gross merchandise value. Etsy rakes in about 17%, while peers have a so-called take rate of at least 20%, according to BTIG analysts. That suggests plenty of available upside. Etsy boss Josh Silverman reckons there may be opportunities from selling advertising, too, as Depop doesn’t carry any now.

    While Depop’s social-media aspects give it an edge, there are few barriers to entering the market for recycled fashion. And teenagers are a notoriously capricious bunch. At the first sign of a Depop slowdown, Etsy may find that investors are too. (By Jeffrey...

  • China’s Zillow can clean up its dual-class house, says @ywchen1: Link https://t.co/nD0oSDR3ny
    ReutersBreakingviews Thu 03 Jun 2021 03:53

    The late founder of $59 bln Ke left behind a 39% economic stake in his online real estate broker with 81% of the voting rights. There’s no good reason for a trust to wield such feudal control over a company. Converting the shares to common ones would be the right thing to do.

  • RT @Reuters: From @Breakingviews: Bahrain-based Investcorp is delisting from the country’s stock exchange. The move reflects the challenge…
    ReutersBreakingviews Thu 03 Jun 2021 01:53
  • RT @Reuters: From @Breakingviews: Strong U.S. economic reports no longer surprise investors while measures of market volatility suggest ass…
    ReutersBreakingviews Thu 03 Jun 2021 01:53
  • RT @Reuters: From @Breakingviews: The U.S. Securities and Exchange Commission is giving proxy advisers a nod, writes @TheRealLSL https://t.…
    ReutersBreakingviews Thu 03 Jun 2021 01:53
  • RT @Reuters: From @Breakingviews: As the fate of Icarus reveals, overexposure to renewable energy can have its downsides, writes @edwardcro…
    ReutersBreakingviews Thu 03 Jun 2021 01:53
  • Marqeta, an issuer of digital payment cards, provides services to purveyors of picks and shovels. In its upcoming IPO, it is seeking a valuation of up to $13 billion – quite an ask, @TheRealLSL says. Link
    ReutersBreakingviews Wed 02 Jun 2021 21:18

    That’s the market cap at the top of the IPO range proposed by the issuer of digital payment cards. Marqeta is riding a big trend, mostly serving Square. That brings protection, but also exposure – not only to rivals, but to customers’ own capabilities and their customers’ whims.

  • RT @richardbeales1: Looks like Engine No. 1 nominees are getting a third board seat at Exxon Mobil. Here’s @TheRealLSL @Breakingviews on th…
    ReutersBreakingviews Wed 02 Jun 2021 21:08
  • New England Patriots owner Robert Kraft and Alibaba's Joe Tsai are betting on the latest U.S. effort to professionalize lacrosse. The league's unusual structure, social media focus and demographics give it a shot, @rob_cyran says. Link https://t.co/5NM7iK9wGv
    ReutersBreakingviews Wed 02 Jun 2021 20:53

    A startup niche professional sports league isn’t an obvious winner. Yet New England Patriots owner Robert Kraft and Alibaba co-founder Joe Tsai have ponied up for the U.S. Premier Lacrosse League’s latest funding round. Despite failed past attempts, the PLL has a shot at success.

    Star player Paul Rabil and his brother created the league in 2018. Options and health insurance got players onside. Costs are low, as there are few teams and no home cities. The appeal is instead based around online personas. It’s a way to attract a small, dedicated audience via social media.

    It seems to be working. The PLL absorbed an older rival league in December. It won't give figures, but says this funding round came at an increased valuation. Moreover, demographics are at its back. High schoolers playing lacrosse rose by a third between 2010 and 2019. Sure, only about a quarter as many kids participate in lacrosse as play basketball but traditional school sports aren’t growing....

  • AMC has made its own meme movie. The company raised $230 million from a hedge fund, which promptly sold the shares at a profit, @richardbeales1 says. Link
    ReutersBreakingviews Wed 02 Jun 2021 20:43

    It’s hard to keep up with the plot twists. AMC Entertainment (AMC.N), the movie theater chain that wasn’t far from collapsing last year , is now worth nearly $30 billion after its stock surged again on Wednesday, almost doubling as of 1:30 p.m. ET and bringing the year-to-date gain to around 3,000%.

    In part, it’s an overshoot after the dire lockdown situation last year. But AMC has also become a social media-fueled meme stock in the GameStop (GME.N) tradition. The company just took full advantage, raising more than $230 million from hedge fund Mudrick Capital Management at a small premium to Friday’s closing stock price. In a move worthy of Warren Buffett on steroids, Mudrick had already sold its shares at a profit by Tuesday read more , the same day AMC announced the investment.

    AMC is playing to its meme audience in other ways, too. On Wednesday it set about communicating more directly with retail shareholders numbering more than 3 million. The initial incentive,...

  • Marqeta is asking for $13 billion for fintech's picks and shovels, writes @TheRealLSL. Link https://t.co/YOCQwkfMYI
    ReutersBreakingviews Wed 02 Jun 2021 20:13

    That’s the market cap at the top of the IPO range proposed by the issuer of digital payment cards. Marqeta is riding a big trend, mostly serving Square. That brings protection, but also exposure – not only to rivals, but to customers’ own capabilities and their customers’ whims.

  • AT&T’s neatly structured Time Warner deal provides a catalyst for more corporate breakups. @LiamWardProud explains. Link https://t.co/RsxCSukPkG
    ReutersBreakingviews Wed 02 Jun 2021 18:38

    After going gaga for carveouts and spinoffs a few years ago, U.S. companies unleashed just $200 bln of them last year. Investors reward corporations that ditch sprawl for specialization. Ma Bell’s neatly structured Time Warner deal provides a catalyst to break more things up.

  • Strong U.S. economic reports no longer surprise investors while measures of market volatility suggest asset prices are expected to be serene in months ahead. Taking good things for granted, though, can be dangerous, says @swahapattanaik. Link https://t.co/TwhcMczpXP
    ReutersBreakingviews Wed 02 Jun 2021 18:08

    Measures of expected asset-price volatility have fallen as the U.S. economy roars ahead, Fed boss Jay Powell keeps his foot on the accelerator, and firms and consumers regain some confidence. The recovery is now so fully priced in that even small setbacks could rattle investors.

  • The Olympics’ noble mission has long been corrupted, distorting sports and economies. It’s time to end them once and for all, says @petesweeneypro Link https://t.co/xropSzCldq
    ReutersBreakingviews Wed 02 Jun 2021 16:13

    Posted

    The Tokyo games are a Covid calamity. Beijing’s role as 2022 host is turning into a bitter referendum over human rights. And the Olympics’ noble mission has long since been corrupted, distorting sports and economies. Pete Sweeney argues we should boycott them all.

  • Bahrain-based Investcorp is delisting from the country’s stock exchange. The move reflects the challenge of valuing companies that manage illiquid assets like private equity, writes @Unmack1 Link https://t.co/SuNHFGPVuY
    ReutersBreakingviews Wed 02 Jun 2021 16:13

    Bahrain-based Investcorp (INVB.BH) is delisting from the country’s stock exchange. The move brings an end to more than 30 years of public ownership for the group founded to channel Gulf money into alternative assets. It now oversees $35 billion of buyout funds, property, infrastructure and credit.

    It’s easy to see why the firm may be giving up on public markets. Investcorp’s stock is volatile, and often trades at a big discount to net asset value, ascribing little worth to future earnings. That may be partly because it is closely held by management and Gulf nationals and institutions such as Abu Dhabi sovereign fund Mubadala. But it also reflects the challenges of valuing companies that manage illiquid assets like private equity, whose cash flows are lumpy and hard to predict. Investcorp is arguably bucking the trend: Swedish peer EQT (EQTAB.ST), for example, listed in 2019. But its move serves as a warning to any other group looking to take the plunge. (By Neil...

  • As the fate of Icarus reveals, overexposure to renewable energy can have its downsides, writes @edwardcropley Link https://t.co/MUdhAS4bxl
    ReutersBreakingviews Wed 02 Jun 2021 15:58

    As the fate of Icarus reveals, overexposure to renewable energy can have its downsides. Shares in Orsted (ORSTED.CO) fell 6% on Wednesday read more after the Danish wind power specialist unveiled plans to spend $57 billion over the next 10 years. Chief Executive Mads Nipper reckons that besides helping prevent the planet from overheating, it will transform Orsted into the world’s biggest green power company.

    Admittedly, Orsted already has a $61 billion market valuation and recognised global leadership in offshore wind, the backbone of its current 7.6 gigawatts of installed renewables capacity. Yet the 2030 target of 50 gigawatts – 50% more than rough UK peak power demand – involves less-familiar technology like solar power and hydrogen production. And the competition is hotting up as oil majors like BP (BP.L), Total (TOTF.PA) and Shell (RDSa.L), and even Exxon Mobil (XOM.N) and Chevron (CVX.N), come under pressure to decarbonise. With Orsted trading on over 40 times...

  • Markets are too tranquil for their own good, argues @swahapattanaik. Link https://t.co/aTzzrvVk9B
    ReutersBreakingviews Wed 02 Jun 2021 14:38

    Measures of expected asset-price volatility have fallen as the U.S. economy roars ahead, Fed boss Jay Powell keeps his foot on the accelerator, and firms and consumers regain some confidence. The recovery is now so fully priced in that even small setbacks could rattle investors.

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