Business this week
《经济学人》2018年8月11日 刊
Even by the standard of his previous capricious outbursts, Elon Musk’s tweet that he is thinking about taking Tesla private left investors scratching their heads. Such a buyout would be the biggest in history. In a memo on the carmaker’s website, Mr Musk said he was considering the move to shield Tesla, which has been plagued by production problems, from the short-term demands of public markets and to stop short sellers from attacking Tesla’s shares. Some wondered whether such a significant disclosure about the business followed the proper regulatory rules. Mr Musk’s announcement came on the heels of reports that a Saudi investment fund had taken a stake in the company. See article.
I'll see your bet and raise you
The trade war between America and China intensified. The Trump administration proceeded with plans to impose tariffs on a further $16bn-worth of goods from China, which come into effect on August 23rd. China said it would respond in kind. It had earlier threatened to levy new duties on $60bn-worth of American exports if America implemented tariffs on another $200bn-worth of Chinese products. See article.
Germany’s economy ministry in part blamed “uncertainties” in trade for a decline in manufacturing orders. Orders from within the euro zone and domestically fell by almost 3% between May and June. Those from outside the currency bloc dipped by 6%.
New York’s city council voted to stop issuing new licences for ride-hailing cars for a year while it reassesses the industry, and also to set a minimum wage for drivers. Although existing licensed drivers will still be allowed to operate, the ruling is a setback for Uber in its biggest market. See article.
Unfazed by American sanctions and boosted by higher oil prices, Rosneft’s quarterly net profit surged, to 228bn roubles ($3.7bn). After years of big acquisitions, the Russian oil producer, the world’s biggest listed oil company by output, said its buoyant earnings reflected improved efficiency.
Glencore’s headline profit for the first half of the year rose to $8.3bn, a record for the mining and commodities-trading firm. Its metals business benefited from rising commodity prices in the first half, particularly in battery-related metals such as nickel and cobalt. However, cobalt prices have plunged recently, as China has upped its exports of the metal.
Peak social media?
Snap followed Facebook, Netflix and Twitter by reporting disappointing user-growth figures. Daily users of the Snapchat app actually fell by 2% from April to June compared with the previous three months. Snap got a vote of confidence, however, from Prince Alwaleed bin Talal, a prominent Saudi investor, who has amassed a 2.3% stake.
Cisco expanded its business in cyber-security by agreeing to pay $2.4bn for Duo, which provides a two-factor authentication service. With companies increasingly concerned about hacking and identity theft, the market for technology that requires staff to enter additional security details when accessing corporate computer systems is expected to grow rapidly.
America’s Department of Justice filed an appeal against a judge’s decision to permit the merger of AT&T and Time Warner. The department argues that the judge ignored principles of “common sense” in his ruling.
The pound fell below $1.29 for the first time in almost a year, as worries mounted that Britain could leave the European Union next March without a trade deal. Britain’s trade secretary did little to allay those fears when he gave the odds of crashing out of the EU at 60-40. Sterling also hit its lowest level against the euro since last October, at €1.11. See article.
Royal Bank of Scotland said it would pay its first dividend since its bail-out during the financial crisis. The government still owns a 62.4% stake in RBS. Recommencing payouts may widen the pool of potential investors as the government further reduces its stake.
Indra Nooyi decided to retire as chief executive of PepsiCo after 12 years in the job. During her tenure Ms Nooyi steered the company away from its over-reliance on soft drinks and snacks towards healthier foods, juices and water. She saw off a subsequent campaign led by Nelson Peltz, an activist investor, to split the company in two. Her successor is Ramon Laguarta, a PepsiCo veteran.
Flat-packing all over the world
IKEA opened its first outlet in India. The store, in Hyderabad, differs slightly from IKEA’s shops in other countries by offering a wider range of cheap goods, 1,000 of which will sell for less than 200 rupees ($2.90), as well as a 1,000-seat restaurant. Indians now, too, will get to know the pleasure of assembling a PAX wardrobe over a weekend.
Aug 9th 2018
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