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WeWork rescued so it can keep working

Softbank bought 80% of WeWork in a rescue deal valued at almost $10 billion.
Paul Booth
By Paul Booth
Johannesburg, 28 Oct 2019

The WeWork rescue package dominated the international ICT market last week.

At home, the Prosus hostile bid for Just Eat stole the local media space.

Key local news

  • Good interim numbers from Cartrack Holdings, with revenue up 19% and profit up 29.7%.
  • Mixed interim figures from Altron, with revenue up 7.7% but profit down 7.6%.
  • Prosus made a £4.9 billion hostile acquisition bid for Just Eat, which operates a global marketplace for food delivery across 13 markets.
  • Datacentrix is involved in a dispute with its black economic empowerment partner, The IT Advantage, which accuses the former of anti-competitive and corporate bullying practices.
  • Renewed JSE cautionaries by Ayo Technology Solutions and Metrofile.
  • A withdrawn JSE cautionary by 4Sight Holdings.

Key African news

  • Good quarterly figures from Bharti Airtel’s Africa unit, with revenue up 10% and profit up 39%.
  • Zamani Com acquired Orange Niger.
  • Xiaomi has set up a business headquarters in Africa.
  • The appointment of Peter Ndegwa as CEO of Safaricom.

Key international news

  • Alarm.com acquired OpenEye, a leading provider of cloud-managed video surveillance solutions for the commercial market.
  • Amazon bought Health Navigator, a digital health technology company.
  • Atos purchased X-Perion Consulting in Germany and will combine it with Atos’s fully-owned subsidiary, Energy4U, part of its Worldgrid activities.
  • EchoStar acquired Helios Wire, a Canada-based satellite-enabled IOT connectivity company.
  • Enghouse Systems bought France-based Eptica, a leading provider of customer engagement software.
  • Fuji Xerox purchased CSG, an Australian printing business, for $95 million.
  • Mastercard acquired SessionM, a US-based technology company that provides a customer engagement and loyalty platform that empowers the world’s most innovative brands.
  • Microsoft bought Canada-based Mover, a cloud file migration company.
  • PTC acquired Onshape, a computer-aided design software start-up delivered in a software-as-a-service model, for $470 million.

Prosus made a £4.9 billion hostile acquisition bid for Just Eat.

  • Roku bought dataxu, a demand-side platform that enables marketers to plan and buy video ad campaigns.
  • SHL, a US-based talent evaluation leader, purchased Aspiring Minds, a Gurugram and AI-powered test and assessment venture.
  • Silicon Labs acquired all IEEE 1588 precision time protocol (PTP) software and module assets from Qulsar, a leading provider of PTP grandmasters, gateways and other system-level synchronisation-based solutions.
  • Softbank bought 80% of WeWork in a rescue deal valued at almost $10 billion.
  • Trend Micro purchased Cloud Conformity, an innovative cloud security posture management company.
  • Teradyne will acquire privately owned AutoGuide for $165 million. AutoGuide provides autonomous mobile robots for material transport of payloads of up to 4 500kg for the manufacturing, warehouse and logistics markets.
  • Bharti Airtel invested an 8.82% stake in the India-based technology start-up Vahan, part of its Start-up Accelerator Programme.
  • Samsung Electronics and the UAE government led a $55 million investment in US quantum computing start-up IonQ.
  • Splunk invested in Zonehaven, a cloud-based analytics application designed to help communities improve evacuations and reduce wildfire risk with data.
  • A strategic partnership has been formed between Telefónica Innovation Ventures and Altiostar, a pioneer in open virtualised radio access network, in a move that is intended to speed up the telecom industry’s move to next-generation wireless networks.
  • Intel has filed an anti-trust lawsuit against a SoftBank Group-owned investment company alleging the firm stockpiled patents to hold up technology companies with numerous lawsuits.
  • AT&T, Sprint, T-Mobile US and Verizon Communications have formed a joint venture focused on new texting technology. The Cross Carrier Messaging Initiative is intended to provide a “consistent, engaging experience that makes it easy for consumers and businesses to interact in an environment they can trust”. The joint venture is working on a standards-based, interoperable messaging service, starting with Android and expected in 2020.
  • China has set up a new national semiconductor fund of $28.9 billion, as it seeks to nurture its domestic chip industry and close the technology gap with the US.
  • The European Data Protection Supervisor, the EU’s data watchdog, announced Microsoft’s contracts with European Union institutions do not fully protect data in line with EU law.
  • Sunrise’s $6.3 billion take-over of Liberty’s Swiss network has collapsed.
  • Swedish streaming company Nordic Entertainment Group has agreed to combine its Viasat Consumer satellite pay-TV and broadband TV operations with Telenor Group’s Norwegian satellite TV unit Canal Digital, forming a 50-50 regional television distribution joint venture that will create a scaled, simpler and streamlined content venture in Scandinavia.
  • A whistle-blower has accused Infosys’s top management of leading an effort to shore up profits through irregular accounting. This turns up the heat on the IT services giant, which endured internal turmoil just two years ago. The US Securities and Exchange Commission has launched an investigation into these allegations.
  • Data protection software vendor Veeam has sold its N2WS business, which it acquired less than two years ago, in response to US government concerns.
  • Excellent quarterly results from Smith Micro Software.
  • Very good quarterly figures from ServiceNow.
  • Very good year-end figures from Naspers-owned Olx India.
  • Good quarterly numbers from Comcast, Dassault Systemes, Euronet Worldwide, HCL Technologies, Ingenico, Microsoft, SAP, Sterlight Technologies and Teledyne Technologies.
  • Good year-end numbers from Softcat.
  • Satisfactory quarterly results from Align Technology, Atos, Cadence Design Systems, CoreLogic, Equifax, General Dynamics, Interface, Logitech, OSI Systems, PayPal, Roper Technologies, Software AG, Teradyne, VeriSign, Verizon Communications, Visa, Vocera Communications (back in the black) and Xilinx.
  • Mediocre quarterly results from Amphenol, ATN International, Avnet, BE Semiconductor Industries, Benchmark Electronics, Citrix Systems, Cypress Semiconductor, eBay, Entegris, Juniper Networks, Lam Research, MKS Instruments, Netgear, Rogers Communications, Silicon Labs, SK Hynix and Texas Instruments.
  • Mediocre year-end numbers from Filtronic.
  • Mixed quarterly figures from Amazon.com, Cerner, Charter Communications, CTG, F5 Networks, Grupo Televisa, Intel, LogMein, Manhattan Associates, Monolithic Power Systems, Nokia, Plexus, PTC, Shaw Communications, STMicroelectronics, Twitter, Visteon and Yandex, with revenue up but net income down; and from HFCL (India), with revenue down but net income up.
  • Quarterly losses from Agilisys, Alliance Data, Brightcove, Celestica, CyberOptics, Flex, Forrester Research, MagnaChip Semiconductor, MaxLinear, Millicom International, Proofpoint and Snap.
  • A half-year loss from Checkit.
  • A full-year loss from Essensys Group.
  • The appointments of Elie Girard as CEO of Atos; Rich McBee as CEO of Riverbed; Bill McDermott (ex-SAP CEO) as CEO of ServiceNow; Mary McDowell as CEO of Mitel; Salvatore Rossi as chairman of Telecom Italia; and Andre Soelistyo and the other co-founder Kevin Aluwi as joint CEOs of Gojek, the Indonesian-based ride-hailing and payments company.
  • The resignations of Fulvio Conti, chairman of Telecom Italia; John Donahoe, CEO of ServiceNow; Nadiem Makarim, CEO and co-founder of Gojek; and Rich McBee, CEO of Mitel.
  • The departures of Thierry Breton, CEO of Atos (stays on as non-executive chairman); and Adam Neumann, chairman of WeWork.
  • A disappointing IPO on Nasdaq by Youdao, the education unit of NetEase, the Chinese Internet technology company.
  • A satisfactory IPO on Six Swiss Exchange by Swiss software management company SoftwareONE.

Research results and predictions

EMEA/Africa:

The EMEA traditional PC market (desktops, notebooks and workstations) grew 3% year-on-year in 2019Q3 and totalled 18.8 million units, according to IDC.

Worldwide:

Worldwide IT spending is projected to total $3.7 trillion in 2019, an increase of 0.4% from 2018, according to Gartner. This is the lowest forecast growth in 2019 so far. Global IT spending is expected to rebound in 2020, with forecast growth of 3.7%, primarily due to enterprise software spending.

Stock market changes

  • JSE All share index: Down 1%
  • FTSE100: Up 2.4%
  • DAX: Up 2.1% (highest weekend close this year)
  • NYSE (Dow): Up 0.7%
  • S&P 500: Up 1.2%
  • Nasdaq: Up 2.3%
  • Nikkei225: Up 1.4% (highest weekend close this year)
  • Hang Seng: Down 0.2%
  • Shanghai: Up 0.6%

Look out for

International:

  • Verizon selling HuffPost, which it acquired as part of its take-over of AOL in 2015.

South Africa:

  • Further developments at Cell C and at EOH.

Final word

Fortune magazine recently published its 2019 list of the 50 most powerful women in business. Included are:

  • 4: Ginni Rometty, chairman, president and CEO of IBM
  • 6: Sheryl Sandberg, COO of Facebook
  • 7: Phebe Novakovic, chairman and CEO of General Dynamics
  • 8: Safra Catz, CEO of Oracle
  • 9: Julie Sweet, CEO of Accenture
  • 10: Ruth Porat, SVP and CFO of Google, Alphabet
  • 12: Susan Wojcicki, CEO of YouTube
  • 16: Amy Hood, CFO and EVP of Microsoft
  • 32: Deirdre O’Brien, SVP, Retail and People at Apple
  • 33: Revathi Advaithi, CEO of Flex
  • 43: Jennifer Morgan, president, Cloud Business Group at SAP
  • 44: Lisa Su, president and CEO of AMD
  • 46: Christine Leahy, CEO of CDW
  • 47: Bridget van Kralingen, SVP Global Industries, Clients, Platforms and Blockchain at IBM

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