"Flesh nologi"
Last week, during the G7 Dialogue, the participating states agreed in advance to introduce a small tax on corporate profits of fifteen percent, which was suggested by the Americans. This is necessary in order to, so that large companies cannot hide large incomes in states with small taxes. Wherein, there is one catch: the consent of the G7 states will not be enough - it will be necessary, so that other states agree. For instance, Ireland with its tax 12,5 %. She has no circumstances to agree to an increase in tax to the standard of the "Seven" in principle: this is a small state, which has no special advantages. And later you need, so that developing countries agree to this rate and, in general,, all others. Otherwise, all companies will run to re-register in Hungary with its nine percent corporate tax.
Along with this, a different tax story is developing.: France plans to impose a tax on the activities of American IT organizations, who sell their products and services in the state, - 3% of revenue. The reason for the tax is extremely common: companies pay tax payments there, where are they registered, but the digitalization of the economy has led to, that the company can be registered in one country, but to receive income from the use of its products and services in another country, where tax payments cannot be collected from it. Austria intends to introduce identical tax payments on IT organizations from the United States, Spain, United Kingdom, Italy and India.
Americans plan to punish the French with big, up to one hundred percent, tariffs on French exports to America: Bags, perfume, wine, porcelain, - we are talking about goods with a total value of 2.4 billion dollars. It is also planned to introduce similar tariffs against a number of English ones - in the amount of $800 million, - Italian and Spanish goods - $ 300 million per country.
Maybe, this conflict will be resolved through the creation of a system of a common minimum corporate tax. Or maybe, and fail: these countries will introduce their taxes against Internet giants regardless of these negotiations, and then they will need to be canceled separately. In any case, the shareholders Google, Facebook and other companies should mentally prepare for worse reporting.
Didn't count
Remember food delivery service Grubhub? The company seems to have realized the dream of all unprofitable IT startups: untwisted, she found a buyer for her business. Grubhub to acquire Anglo-Dutch company Just Eat Takeaway. But there's a problem: against the management of Grubhub, the shareholders filed already 14 lawsuits.
There are two main claims from shareholders. Grubhub management didn't try to haggle over the sale price, what framed ordinary shareholders, who will now receive 0,67% from the Just Eat promotion for each Grubhub share, regardless of whether, How much will the shares be worth at the time of the merger?. The situation is aggravated by the, that in the event of a sale of the company, the main beneficiary will be the management of the company, lavishly paid, not ordinary shareholders.
Strictly speaking, initiators of the claim want, to get Grubhub sold at a much higher price, and therefore ask the court to annul the current merger agreement. More good news for Grubhub shareholders.: this is how the chain of events starts, which may well lead to, what will Grubhub get more expensive, than originally planned. On the other hand, the lawsuit may end in nothing. There is also a third option: the deal will fall apart, but there is no buyer at a higher price on Grubhub, and then the company will have to continue sailing alone. Given the chronic unprofitability of this business, this turn of events cannot be considered very good.
Biden package
As we said in previous issues of investment news, in the United States, the scale of investment plans of the Biden government is gradually reduced. At the end of May, Biden, instead of a package of measures to stimulate the American economy in the amount of 2.3 trillion dollars, proposed a package more modest - by 1.7 trillion, and last week the plan was reduced once again - to a trillion. In this way, Biden's final plan, probably, will be closer to the package of measures, proposed by the Republicans, - about 500 billion dollars.
Republicans vehemently oppose tax hikes — which are supposed to pay for the plan, - therefore, Most likely, Biden will have to get by with increasing the collection of those taxes., which the Americans have not yet paid, - approximately 700 billion. But this will require about $80 billion in tax expansion spending over the next 10 years. What will happen next - we will find out in the near future.
Since the last hacker attack - 0 days
There were several major hacks in the US last week.. A ransom attack occurred at the enterprises of the food industry giant JBS, which for some time paralyzed the activity of its factories, but now all factories are working. For some time, burglars paralyzed the work of the factories of the enterprise, which is processing 25% beef and 20% pork in the USA. If the situation dragged on, then, probably, in the US, a food crisis of the level of the coronacrisis spring would begin 2020: then a number of factories closed for quarantine and farmers in the United States were forced to destroy millions of pigs, which had nowhere to sell and nowhere to contain, which led to a shortage of meat and an increase in prices for it. By the way, attack on JBS attributed to Russian hackers.
There were serious problems in other parts of the country too.: hacker attack shuts down ferry service in Massachusetts, and in New York, the subway administration told the city and the world, what, turns out, in April of this year, her system was hacked, albeit without consequences for the work of the subway.
All this is a logical consequence of the digitalization of operations of most companies.. This process took place even before the pandemic., but the coronacrisis gave it an acceleration. Actually, in 2020, the growth of hacker attacks in order to obtain ransom in the world amounted to 150% - and the average time to stop the activity of computer systems of the victims of such attacks is already 18 days. Can you imagine, that Coca-Cola or General Motors be forced to stop all operations on 3 weeks? And how will this affect their reporting??
By the way,, insurance companies around the world are gradually reducing the volume of insurance companies against the risks of cyber attacks due to the fact, that these same attacks are becoming more and more, and the damage is getting worse. The more factories and transport systems will be tied to the Internet, the more such risks will be. The risks of hacking for companies are many times worse than the huge costs of security software and services in this area - so you can expect, that in the next 10-15 years the company, working in the field of cybersecurity, will not suffer from a lack of customers. Well, the shareholders of these companies can be sure that, that these shares will be very popular with investors.
Fashion is more valuable than money
Etsy buys British online fashion marketplace Depop for $1.63 billion. Depop sells 650 million worth of goods a year, and its revenue is 70 million - this is 2 times more, than a year earlier. Depop has 30 million registered users, 4 million active buyers and 2 million active sellers. About 75% sellers on the platform also buy on it.
Etsy was able to rise well on the pandemic, but now this factor is no longer so strong, like before, and therefore the company is looking for opportunities to expand in related areas. Whether it will help her - now it's hard to say. On the other hand, would like to note, that Etsy was profitable even before the pandemic, so the fundamentals of this business are pretty good and further expansion can be of great benefit to shareholders.
The word of the day is "filtering"
At the end of September 2018, Tesla shares collapsed, because regulators in the US decided to punish Musk for manipulating the market with his Twitter account, where Musk posted false news, affecting the price of Tesla shares. Regulators then came to Musk with a settlement agreement, the essence of which was small sanctions and a fine. One of the conditions was, that Tesla lawyers will review all of Musk's tweets before publishing them.
So here, just now, the Securities Commission concluded, that Tesla does not comply with the terms of censorship of Maskov's tweets. What consequences will this have in the future?, it is hard to say. Maybe, threaten with a finger, which is most likely. Or maybe, and promote the case to a full-fledged investigation and “leave” Musk from the company. I would like to say, that the shares will not be affected, but, Alas, probably, the option to eliminate Musk from Tesla will lead to a serious drop in quotes: the lion's share of the unnatural, considering the unprofitableness of the company's operations, the popularity of these shares among investors is due to the personality of Musk.
Certainly, everyone is used to it, that Musk is such an enfant terrible of the American automotive industry, who are ready to forgive everything. But, Considering, that almost every week some famous person in Western society is harassed and ostracized for something, The mask can also be punished.
By the way,, the meaning of pumping Tesla by investors, interested in the popularization of electric cars, gradually fading away, as traditional automakers ramp up production of these vehicles. Ford, for example, in May of this year sold electric cars almost in 3 times more, than in May 2020. Soon all major car manufacturers will start making their electric cars in sufficient quantities and Tesla will lose its status as a "cool progressive company".
Transformers: dark side of tax
The NGO "Center for the Study of International Corporations" published a study on, that the film studio Paramount last 20 years of tax evasion. Since 2002, the company has happily avoided paying $3.96 billion in corporate income tax through the use of a complex system of companies in the Caribbean., in the Netherlands and Luxembourg. All of this is royalty-free for using the company's content outside of the United States..
Paramount swears at the authors of the report: pier, they all misunderstood and in general "everything was wrong", - but the case is still very interesting. Given the growing interest of the US authorities in the idea of increasing tax collection for ViacomCBS shareholders, this could mean, that in the medium term the company's reporting will deteriorate, if the American tax authorities begin to fight such schemes.
Sweet bread
In May, food prices in the world rose by 4,8% compared to April of this year and almost 40% compared to May 2020. These news are of great importance for a number of issuers.. Firstly, it increases the cost of production in the food industry, like Kellogg. Secondly, this increases the cost of feed, what will affect the profits of meat producers like Tyson Foods. Thirdly, this affects the cost of production in catering chains - from McDonald's to Shake Shack.
All specified categories of players in this case will either raise prices, shifting the problem to customers, or reduce profitability, shifting the problem to shareholders.
