Thursday 14/01/21

1. In TRUMP & BITCOIN NEWS, Trump is impeached again, New York cuts him off and Lagarde goes on the offensive over Bitcoin
2. In M&A NEWS, American Tower buys Telxius, JD Sports and Barneys’ owner consider Topshop, the LSE/Refinitiv deal gets approval and Take-Two walks away from Codemasters
3. In CORONATRENDS NEWS, Pimlico Plumbers push the jab, a Sussex company tests a vaccine pill and then we look at coronavirus “winners” and losers
4. In INDIVIDUAL COMPANY NEWS, Debenhams cuts its Oxford Street flagship store and Tesla does well in China but may have to do a big recall
5. AND FINALLY, I bring you Foo Fighter sake and the cutest puppy ever 😍…

So Trump gets impeached again, New York shuns him and Lagarde goes on the offensive with Bitcoin…

📢 It’s Thursday – so it’s time for my 30-minute Instagram Live At Five where I will run through a few key stories and themes to follow in 2021 AND the one hour weekly ZOOM call for paying subscribers where I will do the same but in more detail and with much more interaction 👍 The Zoom call will start at 5.30pm and run until 6.30pm. See you there!

President Trump impeached by the House for second time (Wall Street Journal, Natalie Andrews, Kristina Peterson and Rebecca Ballhaus) highlights a new first for Trump as he became the first president ever to be impeached twice! The next stage of this farce will be a Senate vote where a two-thirds majority is needed to convict him (but at the moment there is thought to be a 50-50 split to convict). * SO WHAT? * Many Republicans who condemned his actions last week just want him to see out his term and leave rather then get forcibly booted out. The vote would take place after Biden takes office on January 20th, so it may be interesting to see whether any potential violence from Trump supporters next week swings the 50-50. IF the Senate convicts Trump it could ban him from ever seeking office again.

New York City is latest to cut ties with Trump businesses (Financial Times, Joshua Chaffin) shows yet more Trump ostracism as New York City has now said that it will cut business ties with the Trump Organization following last

week’s Capital debacle. The Trump Organization currently has contracts for the operation of two skating rinks and a carousel in Central Park in addition to a golf course in the Bronx which earn around $17m a year for the company. * SO WHAT? *  The Trump Organisation was also abandoned by Cushman & Wakefield, one of the biggest commercial property brokers in America, and it looks increasingly likely that tenants may instigate legal action against the Organization if they find themselves unable to sublease units because of their association with him! The Trump Organization is currently $1.1bn in debt that is mostly backed by buildings and golf courses. Deutsche Bank and Signature Bank have also severed ties. This is looking increasingly like a very ominous game of musical chairs. Maybe he should give his mate Putin a call to bail him out 😂

Talking of ominous things, Lagarde call for global regulation of Bitcoin (The Times, Philip Aldrick) highlights a major potential banana skin for the red-hot cryptocurrency as Christine Lagarde, president of the ECB, called for regulation. Our own financial regulator, the FCA, already weighed in criticism early this week, but I suspect that it will need more central bankers and politicians for this to stick as current levels would suggest that investors are treating this with a collective “meh”. * SO WHAT? * I have said before that this is the major risk to Bitcoin – that politicians and bankers around the world could club together to do what they can to torpedo the cryptocurrency because they really don’t like something that they can’t control. It happened before with Facebook’s Libra and it could definitely happen again. 

American Tower buys Telxius, JD Sports and Barneys’ owner consider a bid for Topshop, LSE/Refinitiv gets the go-ahead and Take-Two clears a path for EA…

In a quick scoot around some of the M&A news today, American Tower buys Telxius for €7.7bn in European push (Financial Times, Nic Fildes) shows further consolidation in Europe’s mast market as American Tower announced the acquisition of the telecom tower business owned by Spain’s Telephónica and KKR. * SO WHAT? * This will give American Tower a proper foothold in a fragmented European market. It will gain around 31,000 existing tower sites in Europe and Latin America and has said that it will build an additional 3,300 in Germany and Brazil. There has been a lot of consolidation going on in this sector – for instance, Catalan tower specialist Cellnex has been hoovering up a number of assets, culminating in the €10bn purchase of CK Hutchison’s European towers last year.

Elsewhere, JD Sports and Barneys owner eye swoop for Topshop brand (Daily Telegraph, Laura Onita) shows that things are hotting up around the disposal of Arcadia-jewel-in-the-crown Topshop. Authentic Brands (owner of Barneys New York) and JD have teamed up to buy, but they will up against a Next/Davidson Kempner Capital Management bid. Final bids for Arcadia will be coming in the next few days…

Then in LSE’s $27bn Refinitiv deal approved by EU regulators (Financial Times, Javier Espinoza and Philip Stafford) we see that EU regulators have now approved the London Stock Exchange Group’s purchase of Refinitiv in exchange for LSE selling Borsa Italiana, which owns the Milan Stock Exchange. Also, Take-Two reverse clears road for its Codemasters rival (The Times, Ben Martin) shows that Take-Two Interactive has abandoned plans to make a counter-bid for British developer Codemasters, leaving the way clear for Electronic Arts and its £945m bid.

Pimlico pushes the jab and we see more coronavirus “winners” and losers…

I thought I’d include ‘No jab, no job’ policy at Pimlico Plumbers (Daily Telegraph, Alan Tovey) because it may be a sign of things to come. Pimlico Plumbers is implementing a policy whereby new staff will need to get vaccinated because “Staff will feel safer, customers will feel safer. Given the choice, who are you going to employ – someone who has the vaccine or not?”. Existing staff will be encouraged to get the vaccine as well. Pimlico’s chief Charlie Mullins added that “it’s a way of making your business Covid-proof – this will be normal in six months’ time”. * SO WHAT? * I think that moves like this will become common as companies and individuals alike seek to get back to economic normality. Another thing that needs to get sorted is how individuals prove that they’ve been vaccinated (and possibly which one they have had).

Then in Sussex firm to fight Covid with vaccine pills (Daily Telegraph, Julia Bradshaw) almost sounds too good to be true as iosBio is developing a pill-based vaccine as it has found a way of turning injected vaccines into tablets. It is now working with Californian firm ImmunityBio to bring it to clinical trials. * SO WHAT? * If approval happens, it won’t be for months yet – so don’t get too excited! Still, if it did work, it would be transformational because it would be waaaaay easier to transport and administer. As chief exec of iosBio, Wayne Channon, put it “With our capsule, you wouldn’t need medical professionals to administer the vaccine, you could send this out on Amazon Prime and have everyone vaccinated by Saturday”. Wow! Wouldn’t that be great!

And in the coronavirus “winners” corner today we have More in store for Lidl without online boom (The Times, Ashley Armstrong), which highlights Lidl’s ongoing success despite not doing online deliveries. Kantar’s latest figures show that total sales in Britain were 17.9% up – better than sales growth at Tesco, Sainsbury’s, Asda, Morrisons and Aldi. Lockdowns drive 35pc jump in Just Eat takeaway orders (Daily Telegraph, Michael Cogley) shows our ongoing hunger for takeaways under lockdown powering the company’s Q4 revenues up by almost 60%, Asos profits buoyed by fewer returns of its clothes (Daily Telegraph, Laura Onita and Simon Foy) highlights booming profits on strong pre-Christmas sales and lower returns, although it did warn that it expected a £15m hit to costs related to Brexit tariffs and Brompton pedals faster to keep up with global bike boom (Financial Times, Daniel Thomas) shows that the thirst for fold-up bikes continues unabated, prompting the 500-strong company to recruit over 100 more people this year, increase production and invest in electric versions of their core product.

And in the losers’ corner, Rail networks to reduce services to avoid running ‘ghost trains’ from today (Daily Telegraph, Oliver Gill) highlights that today is the day that rail operators will start to cut the number of services to lessen the cost to the taxpayer and head off a wave of “ghost trains” during lockdown. The railway industry continues to limp along as commuters continue to stay away from the office…

Then in Honda to close UK plant for four days owing to supply problems (The Guardian, Jasper Jolly) we see that Honda has announced that it is going to close its Swindon factory for four days next week due to global supply chain problems caused by the coronavirus. It is likely that it is specifically due to a shortage of semiconductors which run cars’ onboard management systems. Many car manufacturers have had to re-jig their supply chains around the world because of this. The Swindon plant is going to close for good in the summer anyway.

Debenhams cuts its flagship and Tesla has some good and bad news…

Debenhams axes Oxford Street flagship as it closes more stores (Financial Times, Jonathan Eley) has an air on inevitability about it as the company said that it was one of six that will not reopen once the current coronavirus restrictions lift. The other branches not reopening are Portsmouth, Staines, Harrogate, Weymouth and Worcester. Debenhams had 160 stores three years ago and they now have fewer than 120. The department store went into administration for the second time last year and is currently being liquidated as it is thought that no-one is really interested in buying the whole thing. The tough times on the UK high street continue…

Tesla/China EVs: pricing power (Financial Times, Lex) is a very interesting article which shows that Tesla’s China sales are trending better than company expectations as it currently has about a 20% market share in EV sales in the country – helped by the cheaper sticker price of the locally-made Model 3 – but that it might have to be careful that it doesn’t do too well otherwise the government might start to get a bit antsy and clip its wings somehow. On the downside, Car-safety regulators urge Tesla to recall around 158,000 vehicles (Wall Street Journal, Rebecca Elliott and Ben Foldy) shows that the National Highway Traffic Safety Administration asked Tesla in a letter yesterday to recall some Model S and Model X vehicles because their touch screens can fail after a few years, affecting safety functions. * SO WHAT? * A recall of 158,000 vehicles would not be much in the scheme of things for an established maker but this is big for Tesla, which delivered almost 500,000 vehicles GLOBALLY last year. About 205,600 of those stayed in the US. Apparently, Tesla does not HAVE to recall the vehicles but it DOES have to come up with an explanation to NOT do a recall. This could be tricky as it’s clearly not something that can be done remotely with a software update!

…in other news…

I thought I’d leave you today with the very cool Foo Fighters unveil an exclusive new Japanese sake (SoraNews24, Oona McGee) and the ridiculously cute Dog with huge eyelashes melts hearts as people compare her to a Disney character (The Mirror, Luke Matthews) 😍