Corona Capital: Peloton, BioNTech (updated)

Cupani Metals

22/12/2020 11:33

(The authors are Reuters Breakingviews columnists.  The
opinions expressed are their own.)
    By Breakingviews columnists
    NEW YORK/LONDON/HONG KONG/MILAN, Dec 22 (Reuters
Breakingviews) - C orona Capital is a column updated throughout
the day by Breakingviews columnists around the world with short,
sharp pandemic-related insights.

    LATEST
    - Peloton’s ride to nowhere
    - BioNTech

    ALL GAIN, NO BRAIN. One push-up won’t deliver Arnie-style
pecs. But don’t tell investors in Peloton Interactive  PTON.O .
They drove up the fitness company’s shares by almost 15% on
Tuesday morning – adding more than $6 billion of market
capitalization – as it agreed to buy exercise-equipment maker
Precor https://investor.onepeloton.com/node/7676/pdf in a deal
worth just $420 million.
    Peloton’s progress has been remarkable, even pre-pandemic. A
combination of aspirationally-priced stationary bikes and
treadmills with production-rich workout content has attracted
1.3 million “connected” subscribers. Fads, though, hit hard and
fade fast. Adding Precor’s manufacturing and research
facilities, and getting more installations in homes and hotels,
should, in theory, make the business stickier.
    But not this sticky. The notional market value created on
Tuesday morning is akin to around 160 million months of
Peloton’s $39 all-access subscription. Seen another way, it’s 4
million new users – three times their current amount –
religiously maintaining their subscription for three years. It’s
not Peloton’s fault that investors are getting carried away. But
it ought to hope that the same illusion of miracle gains isn’t
shared by its punters. (By John Foley)

    FINGERS CROSSED. BioNTech  22UAy.DE  is hanging a large
“Don’t Panic” sign around its vaccine. The German drugmaker used
a press conference on Tuesday to assert confidence that its
remedy, jointly developed with Pfizer  PFE.N , will work against
a new Covid-19 variant spreading across the UK. Given that the
new strain transmits 70% faster than the original virus, that’s
just as well.
    Ugur Sahin had another supporting source of comfort. The
BioNTech chief executive reckons the group can use existing mRNA
technology to produce a new vaccine within six weeks https://www.ft.com/content/26f396c2-3dfd-4b57-8fe7-aa6784a2abd9
 if the current one is found wanting  urn:newsml:reuters.com:*:nL4N2IQ1T3. Even so,
developing a remedy is often the fastest part of the process.
The biggest delays come from trials and gaining regulatory
approval from countries around the world. Everyone should be
hoping that Sahin’s Plan A works. (By Aimee Donnellan)
    
    SEASONAL WORKERS. China’s pandemic-fuelled export boom has
run into a human resources problem. A rapidly rising currency,
plus higher raw material and logistics costs, have shaved
margins from overseas sales despite soaring orders. Now
factories are struggling with a worker shortage that will get
worse in coming weeks  urn:newsml:reuters.com:*:nL4N2IV1SA.
    Skilled labour is at a premium in China as salaries steadily
rise. Anecdotally, many of China’s roaming blue-collar workers
have accumulated enough wealth to build multistorey bungalows in
their home villages, and they appear disinclined to rush back to
coastal manufacturing centres after having been laid off earlier
this year. China’s annual lunar new year holiday, which falls in
mid-February next year, will see many depart well in advance to
enjoy quality family time, stressing January’s labour supply.
Bosses may have to offer big raises, or hurry automation, to
keep their production lines humming. (By Yawen Chen)

    PANDEMIC REIN. Jean Pierre Mustier’s exit from UniCredit
 CRDI.MI  is an exercise in restraint. The chief executive of
Italy’s second-biggest bank will leave without any severance pay
https://www.unicreditgroup.eu/en/press-media/press-releases-price-sensitive/2020/press-release-in-compliance-with-the-corporate-governance-code-o.html,
 and renounced any reward under his current incentive plan. That
leaves him with nearly 500,000 UniCredit shares, worth some 3.6
million euros, earned during the first three years of his
tenure. It’s rare in banking. Credit Suisse’s  CSGN.S  boss
Tidjane Thiam, who left in February after a spying scandal,
stood to collect pay, bonuses and options worth up to 30 million
Swiss francs  urn:newsml:reuters.com:*:nL8N2AD4QJ. Deutsche Bank  DBKGn.DE  Chief
Executive John Cryan got https://uk.reuters.com/article/uk-commerzbank-m-a-deutsche-bank-report/deutsche-bank-chief-paid-8-million-as-top-bosses-gain-first-bonuses-for-four-years-idUKKCN1R30PD
 8.7 million euros plus 2.2 million euros for a non-compete
agreement.
    Mustier is honouring a promise made when he joined in 2016
to save UniCredit from collapse. He cut the CEO’s fixed salary
by 40% to 1.2 million euros, and waived annual bonuses and any
severance pay. His hair shirt now raises the bar for other CEOs.
It also stands him in good stead for his next job. (By Lisa
Jucca)
    
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UPDATE-BREAKINGVIEWS-Corona Capital: Vaccine dibs   
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 (Editing by Lauren Silva Laughlin, George Hay, Neil Unmack,
Pete Sweeney, Oliver Taslic and Amanda Gomez)