Karen Kwok
ReutersBreakingviews
United Kingdom
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Past articles by Karen:
Review: War on digital payment fails to hit target – Breakingviews
Brett Scott’s “Cloudmoney” seeks to remind the world of the value of physical cash. It’s true that an overly automated system of money carries risks like the potential for surveillance. But the campaigner underestimates consumer demand for digital transactions. → Read More
Klarna’s $46 bln price tag endures only in theory – Breakingviews
Investors heavily marked down the value of the Swedish startup’s buy-now-pay-later rivals like Affirm. On their sales multiples, privately held Klarna’s valuation would be cut by 75%. While the business is diversified with better funding, it still requires lots of red pen. → Read More
Stars align for UAE to become a global crypto hub – Breakingviews
Big exchanges Binance, FTX and Kraken are expanding in Dubai and Abu Dhabi as local regulators grant licences to trade virtual assets. The world’s leading financial regulators have been wary of cryptocurrencies. A variety of factors give UAE the chance to steal a march on them. → Read More
Arm IPO bankers will struggle to tell growth story – Breakingviews
Owner SoftBank is picking advisers for what CEO Masayoshi Son calls the most significant float in the chip industry’s history. A boost from 5G phones and data-centre demand may lure growth-hungry investors. But that won’t be enough to justify a mooted $60 bln valuation. → Read More
Just Eat investors are stuck with its founder – Breakingviews
Some shareholders want to oust the Dutch takeaway group’s finance chief and supervisory board. Yet they have no obvious replacement for CEO Jitse Groen, architect of its disastrous U.S. expansion. It exposes the limits of investors’ ability to challenge powerful entrepreneurs. → Read More
Just Eat Takeaway faces humiliating U.S. exit – Breakingviews
The food delivery group may sell Grubhub, a business it bought last year for $7.3 bln, an embarrassing U-turn for CEO Jitse Groen. Expanding into the tough U.S. market always looked tricky. Getting out when there are few buyers, just as consumers are squeezed, will be harder. → Read More
Buy gas now, pay later is a hard tiger to ride – Breakingviews
Fintech firms Klarna and Zip are offering U.S. punters interest-free instalments as a way to manage higher fuel bills. The fact that consumers use loans to afford mere essentials raises the risk of defaulted payments. And unlike discretionary sales, Klarna isn’t getting a fee. → Read More
Dubai’s $34 bln utility float tees up IPO drive – Breakingviews
State-owned DEWA will be the emirate’s largest listing since 2007. Its pricing muscle and generous dividend are drawcards, as is the cheap valuation. That reflects the political desire for the debut to set the stage for follow-up IPOs, and puts rival regional bourses on notice. → Read More
Aramco health adds spice to Saudi’s yuan dilemma – Breakingviews
Riyadh’s $2.3 trln oil giant is looking to hike output. If the kingdom starts to price some crude sales in yuan instead of dollars, higher Chinese exports could increase its stocks of renminbi. That could focus Saudi minds on whether to hitch its future to Beijing or Washington. → Read More
Frozen Russia investors can copy hedge fund trick – Breakingviews
Many asset managers with exposure to Russian stocks and bonds have locked their funds. One solution is to park illiquid assets in a separate vehicle – a tool known as side-pocketing. But before approving the move, regulators should ensure it’s not an excuse to charge extra fees. → Read More
Russia exodus tests fund managers’ liquidity limit – Breakingviews
Western funds worth over $4 bln have suspended redemptions after Moscow froze equity trading, while MSCI may kick the country out of its emerging market benchmarks. The crisis once again exposes the flimsiness of asset managers’ promise that customers can sell when they want. → Read More
Kering gets dressed up for elusive mega-deal – Breakingviews
François-Henri Pinault’s luxury powerhouse is boosting sales and profit, thanks to star brand Gucci. That, plus a robust balance sheet, means the $90 bln group is well placed to splash out on a deal. The snag is that there are few obvious targets, raising the risk of overpaying. → Read More
Arm IPO marks sober end to SoftBank chip party – Breakingviews
Under pressure from competition authorities, Nvidia dropped its deal to buy the UK chip designer from Masayoshi Son’s group. Arm’s sensitive position makes a listing the only realistic option. But Son will probably need to accept a valuation below the $32 bln he paid in 2016. → Read More
Tech slump forces IPO hopefuls to consider Plan B – Breakingviews
Fintech Klarna, payroll provider Justworks and mobility upstart Lime are among those that were planning a listing in 2022. Yet tumbling valuations are prompting a rethink. Profitable companies can afford to wait. Others may have to find a buyer, or merge with a blank-cheque firm. → Read More
Rogan deal blunts Spotify’s edgy podcast appeal – Breakingviews
The streaming service is slapping advisories on its shows after a Joe Rogan Covid-19 misinformation spat. The compromise stops CEO Daniel Ek looking like a censor, and cuts the risk of music subscribers tuning out. But the promise of balance in podcasts may reduce their allure. → Read More
Just Eat Takeaway’s best U.S. call is late dropoff – Breakingviews
The food delivery group paid $7.3 bln for Grubhub last year, but investors now attach little value to its American business. CEO Jitse Groen could sell it or spin it off, but only by recognising a big loss. Waiting for the unit’s prospects to improve might be a better plan. → Read More
Rising IPO tide could lift all Gulf boats – Breakingviews
Riyadh, Abu Dhabi and Dubai are fighting it out to be the region’s listing venue of choice. But recent evidence suggests much greater foreign investor interest in Gulf IPOs in general than previous misfires like Aramco. The competitive tension may wind up being good for everyone. → Read More
Live now, pay later is fintech’s latest extension – Breakingviews
Instalment financing, rebranded as “buy now, pay later,” has been the hot consumer financial innovation powering groups like Klarna and Afterpay. Look for the next iteration to entice consumers beyond shopping and leisure, including doctor’s visits, utilities and even taxes. → Read More
Big Meat will channel VW-Tesla in alt-protein war – Breakingviews
Elon Musk stole a march on automakers, forcing them to play catchup on electric cars. A similar dynamic could play out in real and plant-based meat. The likes of Impossible Foods have a Tesla-like lead, but old hands like Tyson and JBS can use M&A to play tortoise to their hare. → Read More
EU gig economy faces lengthy fight with Brussels – Breakingviews
Draft rules would reclassify up to 4 mln of the bloc’s freelancers as employees. That will raise costs and dent demand for firms relying on the self-employed. Ride-hailing and food-delivery groups can tweak business models or argue in court. The winner won’t be clear for years. → Read More