NEW YORK (Reuters Breakingviews) - For some troubled retailers, real estate used to be the fallback asset. But a spate of bankrupt apparel chains shows the sector’s last ditch for value is on the fritz. And as plans to turn former shopping venues into, say offices, seem like a near term pipe dream, the likes of Simon Property will need to reinvent the reinvention.
NEW YORK (Reuters Breakingviews) - For Netflix investors, reality bites. Netflix’s subscriber growth is slowing, and boss Reed Hastings has decided to share his chief executive role. That was enough to knock around 10% off the streaming service’s stock in after-hours trading on Thursday. But even after a 60% share price rise this year, well ahead of Facebook, Alphabet and Apple, Netflix is still the sharpest FAANG.
SAN FRANCISCO/NEW YORK (Reuters Breakingviews) - Facebook’s new best friends are becoming a weakening link at the worst time. Small firms account for a large chunk of the social network’s $70 billion in annual advertising revenue. The pandemic has also made them more dependent on the platform just as big companies from Ford Motor to Unilever boycott it. But these minnows could flounder just when Chief Executive Mark Zuckerberg needs them most.
NEW YORK (Reuters Breakingviews) - There are three good things about Uber Technologies’ purchase of Postmates. First, it removes a competitor from the food delivery market. Second, it looks cheap in light of the amount of cost Uber boss Dara Khosrowshahi thinks he can cut. And while at $2.7 billion the deal is pretty small, that makes it an amuse-bouche sized test of how regulators will respond to the $55 billion ride-hailing firm’s future acquisitions.
NEW YORK (Reuters Breakingviews) - Amazon.com still dominates the fast-growing e-commerce pie, but it’s getting some company. Lockdowns have trained people to shop online including in formerly laggard categories like groceries. That has helped Jeff Bezos but even more so digital sales at Walmart and other retailers. The future may be a lot to do with balancing clicks and bricks.
NEW YORK (Reuters Breakingviews) - Food delivery service valuations are decadent. A rush of homebound consumers seeking takeout from the likes of DoorDash and others is boosting the sector to new heights. That puts a damper on deals for Uber Technologies, whose larger business is ride-sharing. But valuations can reverse just as quickly when lockdowns ease for good, putting Uber in a better spot to gobble a rival without price-tag heartburn.
NEW YORK (Reuters Breakingviews) - Consolidation in the food-delivery business in the United States is a tall order. But Grubhub Chief Executive Matt Maloney has managed to pull a deal off. The company he founded has agreed to a $7.3 billion takeover by European counterpart Just Eat Takeaway.com. There are some benefits, but swallowing the deal will require a fistful of antacid.
NEW YORK (Reuters Breakingviews) - Social media can jump-start national movements: think Black Lives Matter and #MeToo. It’s also a means of forcing companies to listen to staff and customer grievances. In that sense, Twitter and its ilk stand in for the old solidarity of workers' unions. But the power of social media is also easily misdirected.
NEW YORK (Reuters Breakingviews) - Equity markets are preparing for a mini fundraising festival, and Warner Music has provided the opening act. The record label shelved its initial public offering in March, but finally debuted on Wednesday with the biggest public debut in the United States so far this year, and a 20% first-day rise in its share price. There’s demand for new listings, where they fit the bill.
NEW YORK/SAN FRANCISCO (Reuters Breakingviews) - Jack Dorsey can’t win. On Tuesday the Twitter chief executive sanctioned a simple advisory to one of Donald Trump’s tweets, incurring the wrath of the U.S. president – who has vowed to make life tough for social media companies. The political spotlight is more uncomfortable for Dorsey than his rivals, because he must give greater weight to the interests of short-term investors, including activist fund Elliott Management.