Stuff that happened last week:
- Peugeot is set to receive two capital injections of €800 million each from China’s Dongfeng Motor Group and the French government. Which is totally why you should be wary of buying a Peugeot.
- Oh alright – Facebook did announce that it was going to buy Whatsapp for $19 billion. Then Whatsapp crashed for 3 hours on Saturday. But I’m pretty sure that those two happenings are unrelated. Although – there is lots of jaw-dropping about the $19 billion. I mean, assuming a modest PE ratio of 10, with a user base of 450 million, this implies that each user is generating $4.22 in after-tax profit per year. Only – whatsapp is free. And at most, it might get 99 cents per user for an annual subscription… That said, social media companies do tend to IPO while still loss-making – so what would I know? Other than it looks and smells like a bubble.
- Candy Crush also announced that it was looking to list its shares. Or, rather, its owner/developer King announced its plan to list. King’s prospectus showed a great year – although with a dip in earnings at Christmas time, which is apparently quite concerning where mobile games are concerned.
- Apple was rumoured to be discussing a purchase of Tesla. The electric car-maker was founded by South African CEO Elon Musk, which the South African financial press is very proud of. Frankly, the deal seems unlikely. But stranger things have happened – lest we forget, Samsung began life as a noodle-manufacturer, has dabbled in ship-building, and its construction arm built one of the Petronas Towers and the Burj Khalifa in Dubai. So why shouldn’t Apple sell cars?
- RBS is pulling out of both investment banking and global banking. This is part of new CEO Ross McEwan’s plan “to run the best bank in the UK”, which is an astonishing diametric-opposite-of-vision.
- Herbalife is testifying in Washington that it is not a pyramid scheme. It also reported better results on the back of more direct-selling in China. I wrote about Herbalife’s pyramid scheme in February last year (look at news item 4), and then there was that amazing Icahn VS Ackman showdown on live television. Who says that the business section isn’t entertaining?