The UK stock market came under further Brexit-related pressure this week, sending the FTSE 100 2.7% lower to close below the psychologically important 6,000 barrier on Thursday evening.
However, there was an injection of some impetus from M&A activity after Microsoft announced the US$26 billion purchase of professional networking site LinkedIn. The size of the price tag surprised many analysts, as Microsoft has effectively paid around $60 for every LinkedIn subscriber.
Microsoft has a long – but not altogether glorious – track record of acquisitions. The Seattle-based behemoth has consumed more than 150 companies over the years, including Hotmail and Skype. But some of its more recent purchases have been somewhat difficult to digest. The 2014 acquisition of Nokia’s handset business is a spectacular case in point. Last month Microsoft effectively killed off what remained of its phones business, taking a $950 million hit that resulted in the loss of nearly 2,000 jobs.
BHS philibuster
The BHS liquidation saga rumbles on. This week brought the long-awaited appearance of Sir Philip Green in front of a House of Commons enquiry. Sir Philip, long feted by the financial press as a superstar of UK retailing, is the husband of Tina, the former owner of the failed high street chain. The perma-tanned Monegasque yacht enthusiast was subjected to a six-hour grilling by MPs who were keen to discover why he’d sold BHS to a serial bankrupt for the princely sum of £1. In a series of often-tetchy exchanges, he acknowledged that he’d made a mistake in selling the business to Dominic Chappell, but went on to describe recent criticism of his conduct as “wholly unfair”. Sir Philip pledged to resolve BHS’ £571 million pension deficit, which could see as many as 20,000 current and former employees losing out. However, this commitment is, as yet, light on detail.
Fake it to make it
Familiar with luxury brands like Ducci, Adidoss or Dolce & Banana? Neither are we. But they are some of the names getting Jack Ma, the founder and executive chairman of Alibaba, into hot water recently. Alibaba is China’s largest online marketplace, and analysts estimate that it handles more sales volume that Amazon and eBay combined.
Ma caused controversy this week after a speech at the Alibaba headquarters when he stated that “many fake products today are of better quality and better price than the real names”. Unsurprisingly, luxury brand owners aren’t happy about Ma’s remarks – particularly Kering, the French company that owns such famous brands as Puma, Gucci and Balenciaga. Kering recently engaged in its second civil case against Alibaba over the counterfeit goods sold on TaoBao – a subsidiary company. Notwithstanding the various pending legal issues, Ma is confident the company has plenty of success ahead, estimating sales will rise by 48% over the coming financial year.
And finally …
It’s undeniable that in matters agricultural, New Zealand has a distinctly ovine orientation – so much so that one of its folk heroes is James Mackenzie, a legendary 19th century sheep rustler. Times change, though, and this week brought news of a bizarre – but distinctly 21st century – crime wave. A double whammy of bushfires and heavy rains has wreaked havoc on avocado crops, causing a severe shortage of the hipsters’ brunch of choice and pushing the market price up to NZ$4 per berry. Scrumping for avocados has become endemic, with more than 40 large-scale heists since January alone. One recent hit netted an impressive 350 fruits – enough for, ooh, more than 2000 goats’ cheese and avocado crostini…
