This is an amalgamation of the “best bits” of the daily weekday newsletter/blog woven together to form a concise and coherent view on the things that matter in the commercial and economic news of the week.
THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.
TRUMP AND BOJO HAD A TOUGH WEEK WHILE THE EUROZONE CONTINUED TO SLIDE...
- We saw the latest attempt to impeach Trump (Wednesday) as he has been accused of basically blackmailing the Ukranian president to dig up dirt on his own political rivals. He’s survived various attempts thus far to remove him but this one looks like his opponents have something more concrete to work with
- Meanwhile, Boris Johnson had to make an early return from New York (Wednesday) to face an angry parliament who returned to Westminster on the orders of the Supreme Court. Tempers flared, accusations were made all over the shop – and still nothing really got done
- The latest PMI figures reflected a weak eurozone economy (Tuesday) with Germany right at the centre
THOMAS COOK'S FAILURE WAS ALL OVER THE PAPERS...
- Thomas Cook collapsed (Monday), leaving 150,000 holiday makers stranded and 21,000 employees out of a job. It went into liquidation and not administration (Tuesday) because in an administration, an administrator has to stump up cash to keep a business going while it finds buyers. Given the scale and complexity of Thomas Cook’s debt, liquidation was the only option as previous opportunities to pay down debt and restructure had been missed
- Thomas Cook rival Tui is one of a group of companies picking up the pieces (Wednesday) flying people home and is expected to benefit, when the dust has settled, from business that would have gone Thomas Cook’s way. Hedge funds were initially thought to have benefited by shorting the shares and trading CDSs (Tuesday) but actually it seems that they may have largely cancelled each other out (Wednesday). As time went on, the cost of Thomas Cook’s demise went up (Friday) with banks such as Morgan Stanley, Barclays, UniCredit, Credit Suisse and Royal Bank of Scotland being among those facing writedowns of up to £1.8bn due to their exposure to the defunct travel agent
- Thomas Cook’s profitable German airline subsidiary, Condor, searched desperately for a way to survive (Tuesday) and the German government stepped in with a six-month bridging loan, giving staff a stay of execution. Tui is widely expected to benefit from less competition but it’s surviving because it has more control of its business model (Wednesday) due to it owning more of its own assets than Thomas Cook did
VAPING NIGHTMARES CONTINUE...
- Talk about going from hero to zero! Federal prosecutors are now investigating Juul (Tuesday) along with the FDA and the FTC regarding all sorts of claims while e-cigarettes continue to get withdrawn from sale (Walmart, Juul’s products in China) or banned outright (India). Juul will be going through a shake-up (Wednesday) as a result, but its CEO Kevin Burns stepped down amid the furore to be replaced by Altria’s chief growth officer KC Crosthwaite, a tobacco industry veteran. The proposed merger between Philip Morris International and Altria was called off (Thursday) as a result and rival Imperial Brands downgraded its full-year forecasts due to all the vaping-related problems (Friday)
...AND IT WAS A BAD WEEK FOR WEWORK AND MATCH.COM...
- Thomas Cook clearly had a bad week, but then so did WeWork. WeWork’s controversial CEO Adam Neumann stepped down (Wednesday) – although he will remain as non-exec chairman of the company – and it sounds like around 20 of Neumann’s friends and family will be cleared out of the company as part of a purge following the collapse of its proposed IPO last week. Thousands are expected to lose their jobs as the company looks to dispose of non-core assets
- It was also a bad week for Match.com as the US Federal Trade Commission (FTC) is suing it (Thursday), saying that the online dating company ensnared “hundreds of thousands” of people to pay for its services by using false expressions of interest. Match has over 25% of the online dating market and owns Match.com as well as Tinder, OKCupid and PlentyOfFish, so this could get serious
This week, I thought I’d leave you with some “interesting” sweet treats: Chip Shop is making battered Jaffa Cakes – and people are very sceptical (The Mirror, Courtney Pochin https://tinyurl.com/y4wsclw4) and the very weird-sounding Morinaga Milk Industry unveils Japan’s first mayonnaise-flavored ice cream! (SoraNews24, Shannon McNaught https://tinyurl.com/y2hcc8qo). What???
I hope you have an enjoyable weekend!