Jennifer Saba
ReutersBreakingviews
New York, NY, United States
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Past articles by Jennifer:
Investors pick old Walmarts over new Amazons – Breakingviews
The usually steady U.S. retailer cut its profit outlook after being hammered by inflation. Its shares fell 9%, but Amazon, which has similar problems, has done worse. Other old-versus-new pairs are following a similar path. In some cases punishment is being meted out unfairly. → Read More
Hostile warehouse deal just about stacks up – Breakingviews
Real estate firm Prologis wants to buy smaller rival Duke, which has previously rejected a tie-up. The $24 bln all-stock deal represents a 29% premium, which should withstand lurching markets since both firms’ shares tend to move in tandem. It’s appealing enough to deserve a hearing. → Read More
Amazon takes hit from foggy outlook – Breakingviews
The e-commerce giant shed nearly $140 bln in market value after it forecast sluggish sales growth. The pandemic was good for Amazon and other online retailers. Now, while cloud services remain a bright spot, shipping, wage costs and macroeconomic factors are stumbling blocks. → Read More
Netflix with ads is worth the change of heart – Breakingviews
A rare drop in subscribers helped make co-founder Reed Hastings open to a cheaper advertising-supported package similar to HBO Max. If Netflix can reap the equivalent of Spotify's ad revenue, it could add nearly 40% to its worth. With shares cratering, every bit helps. → Read More
Uber, Lyft grease driver’s pockets with surcharge – Breakingviews
The ride-hailing firms added a 55 cents per-trip surcharge to offset a 50% spike in fuel prices. That should cover the bump in gas and then some. Both firms are competing in a tight labor market, so it’s a start. But they may find they have to open their wallets, too. → Read More
Instacart’s painful price cut may not be enough – Breakingviews
The grocery delivery service firm slashed its valuation by nearly 40% to $24 bln. That’s partly a reflection of peers’ market prices. But based on sales, it’s still valued twice as high as DoorDash. With competition growing from Amazon and Walmart, a further cut may be in store. → Read More
Uber NYC cab deal turns lemons into lemonade – Breakingviews
The ride-hailing app is partnering with New York City taxis to make them available on the platform as a surge in gas prices threatens Uber’s ability to recruit drivers. Demand for rides is stepping up too. Joining forces with a once-bitter rival may help smooth the road. → Read More
Nielsen bid rejection deserves bad viewer response – Breakingviews
The video-ratings group dismissed a $9 billion bid from Elliott and others, a move that sent its shares down sharply. It's OK to hold out for a higher price, and that could be the endgame. But the standalone case for Nielsen is too optimistic, and too late, to be convincing. → Read More
Mark Zuckerberg’s metaverse is a virtual money pit – Breakingviews
Facebook parent Meta Platforms’ valuation is half its peak, and the company is worth a third less than if it were benchmarked against ad-machine Alphabet. One explanation is that investors think Zuckerberg’s metaverse project is worth less than nothing. It’s not so far-fetched. → Read More
Amazon one-ups No. 1 antitrust critic Lina Khan – Breakingviews
Time may be running out for the FTC to review the $1.5 trn e-commerce giant’s $8.5 bln deal for MGM. The agency’s chair rose to prominence urging lawmakers to rethink monopoly laws using Amazon as exhibit A. She may struggle to show that her bite is as big as her bark. → Read More
Disney without cricket risks its streaming game – Breakingviews
IPL rights held by the Mouse House are up for grabs. Sony and Reliance are pumped-up contenders, and bids may hit $6 bln – well over double the 2017 price. India is the fastest-growing hub for Disney+ but minus the popular game, boss Bob Chapek can kiss subscriber gains goodbye. → Read More
Trump’s Truth Social is an overvalued threat – Breakingviews
The former U.S. president launched his social media app after Twitter and others booted him from their platforms. Twitter’s slowing growth suggests he might be able to capture a unique following. But based on its users, its $20 bln market cap is at least double fair value. → Read More
Walmart’s trusty talent is less use in new domain – Breakingviews
The $375 bln company’s stronger-than-expected sales and profit are testament to its ability to manage inflation and supply chain pressures. A push into advertising and subscriptions is taking the retailer closer to Amazon’s turf. It will be harder to shine in this territory. → Read More
Paramount’s streaming revamp is an uphill struggle – Breakingviews
ViacomCBS is rebranding to emphasize the media group’s Paramount+ service, which has 33 mln subscribers. Content costs are ballooning just as investors grow skittish about leader Netflix’s growth. A 20% share price drop on Wednesday widens the valuation gap with larger rivals. → Read More
Twitter share buyback is an odd way to take flight – Breakingviews
New CEO Parag Agrawal plans to repurchase $4 billion in stock. He will also spend more to improve tepid revenue growth. But tough competition and the $30 bln company’s slim slice of the ad market mean Agrawal could do with keeping more in the coffers to help him hit his targets. → Read More
Disney closes gap with Netflix in value, not risk – Breakingviews
The Magic Kingdom’s streaming service Disney+ now has 130 mln subscribers, narrowing the gulf with its bigger rival. Investors value the two firms’ earnings on a similar multiple. Yet even though Netflix is now a smaller company by market value, it’s Disney that’s the greater gamble. → Read More
Snap investors have too many stars in their eyes – Breakingviews
The messaging app’s shares soared 50% even though it warned ad privacy changes could hit revenue – something that clobbered Meta Platforms. They share risks, including an ascendant TikTok. Snap looks extra pricey given it lacks peers’ ability to hurl money at new problems. → Read More
AT&T and Discovery’s tie-up has a Netflix quandary – Breakingviews
The telecom firm added 4.3 mln subscribers for its HBO service, soon to be part of a media joint venture with Discovery. But Netflix’s stock crash suggests streaming valuations have slumped. That takes some of the shine off “Succession” parent WarnerMedia’s upcoming union. → Read More
Peloton activist has right diagnosis, dubious cure – Breakingviews
Blackwells Capital wants CEO John Foley out and the $9 bln online fitness firm put on the block. An 80%-plus slump from the home-exercise group's peak stock price confirms a squandering of its pandemic advantage. But a big-name buyer like Apple or Disney is an improbable answer. → Read More
Netflix could be Activision’s Plan B – Breakingviews
Microsoft’s $69 bln bid for the “Call of Duty” maker may fall foul of trustbusters – and the same issue could deter other tech firms like Alphabet and Meta Platforms. That creates an opening for Netflix. Activision could neatly further the streaming giant’s video game ambitions. → Read More