European telecoms will dial up more deals

December 16, 2014

Investors have brightened as M&A has swept the sector. Thanks to BT, Britain is up next. More mergers could follow in France, Italy and Belgium. What’s not to like? Well, windfalls from big cross-border deals looks distant and valuations already price in most of the good news.

BT is in strong position for mobile M&A

November 24, 2014

The fixed-line telco has shaken up UK communications by pushing into TV and now mobile. The reward is that BT has a choice of two mobile networks to buy, O2 or EE, and few likely counter-bidders. A 10 bln stg deal would help lift sales and protect BT’s broadband business.

Qualcomm signals $2.5 bln belief in Bluetooth

October 15, 2014

The $120 bln U.S. chipmaker has bid for Britain’s CSR. It is betting the “Internet of things” will bring rapid growth in Bluetooth-linked cars, stereos and watches. But paying 27 times 2015 earnings looks rich, especially as rival suitor Microchip warns of industry weakness.

China smartphones set to pick off global giants

September 9, 2014

Home-grown manufacturers dominate in the People's Republic, shipping three in four phones in the quarter ending June. In the rest of the world, their share is less than 20 percent. Yet low costs are helping them dial in new emerging market customers. Global rivals face a fight. Read the view

Bouygues’s latest SFR offer may still fall short

March 21, 2014

The French group has made a new pitch for Vivendi’s mobile unit, with 1.85 bln euros more cash and the backing of state-owned bank CDC. That puts some pressure on preferred bidder Altice. But Bouygues’s deal remains riskier. It may need to offer more equity - and a big break fee.

Valuing Tencent’s chat app remains an act of faith

March 20, 2014

The Chinese web giant has finally shed some light on its popular messaging platform. Revenue figures show WeChat is morphing from an app into a business. But sparse details on costs and regulatory risks make future earnings anyone’s guess. Valuations are based largely on hope.

Candy Crush maker picks $7.6 bln IPO from thin air

March 12, 2014

King Digital uses creative metrics like MGABPPU to justify its whopping valuation. But there’s no way to calculate what an enterprise is worth when its profit can skyrocket 70-fold one year and could collapse the next. Rival Zynga’s IPO flub serves as an apposite warning.

How on earth can Facebook justify WhatsApp price?

February 20, 2014

It takes extraordinary suspension of disbelief – and a new Breakingviews calculator – to see how the social network can bring the messaging startup’s $19 bln valuation in line with its own. WhatsApp must double its user base and persuade them to pay more. It’s a big stretch.

Candy Crush destined to be a heartbreaker

February 19, 2014

The addictive mobile app’s Europe-based maker is ready to capitalize on the hype with a U.S. IPO. Fast-growing King could be worth a tasty $6 bln given rival valuations. With top hit Candy Crush generating 80 pct of revenue, though, investor infatuation would be a dangerous game.

Standalone Vodafone starts to look healthier

February 6, 2014

Quarterly results suggest revenue declines are finally moderating. Competition, regulation, technological change and the slump have all hurt the mobile giant. It now hopes to ride a boom in mobile data. Yet Vodafone’s role in future M&A remains the top question for investors.