Breakingviews

Activist + private equity = no M&A for Symantec

February 5, 2016

The internet security group netted $5.3 bln from selling Veritas. Pressured by Elliott, it’s now borrowing $500 mln from Silver Lake and returning all the cash to investors rather than keeping a war chest. Symantec’s questionable dealmaking record makes the straitjacket merited.

Facebook mobile growth accelerates down open road

January 27, 2016

Revenue from smartphone and tablet ads grew a whopping 81 pct last quarter year-over-year, accounting for most of the social-media giant’s $5.8 bln total revenue. With companies getting more comfortable touting wares on digital devices, Facebook still has plenty of room to expand.

Apple may be in for model-cycle purgatory

January 27, 2016

The $550 bln tech giant’s top line nearly flatlined as demand for its smartphones stalled in the last quarter of 2015. Sales are set to slide in the current period. A $216 bln cash hoard and a low valuation should offer solace, but investors could fixate on the next new iPhones.

Twitter’s permanent revolution invites interlopers

January 25, 2016

Four top executives have stepped down, according to CEO Jack Dorsey, via a tweet. Management turmoil hasn’t done any favors for the $12 bln media business. With the stock below its IPO price and Dorsey also running Square, a takeover could spare Twitter a fate like Yahoo’s.

Ads put Alphabet within spitting range of Apple

January 22, 2016

The former Google’s market cap has topped $500 bln and is inching toward the iPhone maker’s. Investors value the search firm’s earnings from fast-growing digital advertising twice as highly as Apple’s from a saturating smartphone market. They may be overlooking serious risks.

Foxconn is better off without Sharp

January 22, 2016

The Taiwanese giant wants to gatecrash a state-backed rescue with its own $5 bln-plus offer. The Japanese group’s display technology would make Foxconn even more indispensable to Apple. But fixing this basket case will be hard. And Sharp’s other businesses are a poor fit.

How Symantec let bad math lead to a shaky deal

January 21, 2016

Carlyle’s buyout of the software company’s Veritas unit was never actually worth the $8 bln headline figure. Excessive leverage was dressed up to make it look workable. Even the new 8 pct price cut is misleading. Boards and investors can help themselves by getting M&A sums right.

China’s online arms race shows no sign of cooling

January 20, 2016

Meituan-Dianping has raised $3.3 bln – a huge sum for a startup. The group deals site was created from a merger that was meant to curb brutal competition in China. But this new warchest, plus the huge resources of rivals like Alibaba, suggests the subsidies will keep flowing.

Taiwan’s new president inherits old economic woes

January 18, 2016

The island’s fortunes are uncomfortably tied to the tech industry and China, both of which are weakening. The electoral triumph of opposition leader Tsai Ing-wen reflects deep distrust of the mainland. Yet Taiwan’s president needs to keep her giant neighbour onside.

Facebook’s free internet faces big test in India

January 5, 2016

Mark Zuckerberg is fighting hard to save his plan to offer a free mobile web service to the country’s poor. If India shuts it down, other developing nations may follow. It’s another case where the social network founder’s apparently noble goals have sparked a furious backlash.