Weekly Wrapup: Cause for concern
In this week's wrapup, we will talk about why Sycamore refused to buy a majority stake in Victoria's Secret, the lopsided economics of running an airline, why Chinese companies may be forced to leave US stock exchanges and how locusts are threatening to upend agriculture.
An explainer on the Locust plague
Yesterday, we talked about locust plagues and the economic devastation they've unleashed across East Africa.
Now locusts are specific kinds of grasshoppers. And under certain extraordinary conditions, they can band together and move in swarms destroying everything on their path. They eat plants, crops, grains, stems, leaves and ravage farmlands whenever they stumble upon one.
And now it seems like they are headed to India. So what do these deadly insects have in store for us? Find out here.
The undone Victoria's Secret deal
On Tuesday, we talked about Victoria's Secret stake sale that fell apart.
Until 5 years ago, high-end lingerie brand Victoria's Secret made up around two-thirds of its parent company L Brands's revenue. But then things took a turn for the worse. Victoria's Secret was criticised for promoting unrealistic beauty standards, the quality of their products dipped, and so did their market share. However, it seemed things would turn around in February 2020 when private equity firm Sycamore agreed to pay $525 million to buy out 55% of the company. Unfortunately, Sycamore walked out of the deal.
Why and how? Find out here.
The Airlines' Curse
On Wednesday, we talked about the problems with running an airline. The thing is, despite seemingly exorbitant ticket prices, the economics here are pretty lopsided. Investors don’t like the business because there’s no money to be made. Entrepreneurs rarely dabble with it because so many players have already gone bust. The incumbents who keep flying can’t seem to make consistent money. And even then, parliamentarians keep trying to put price caps and force airlines to comply with their mandate.
But will it help an industry that's already on the brink of disaster? That's what we wanted to find out and you can read our opinion here.
A bill to delist
On Thursday, we talked about a new law that might force Chinese companies to move away from US markets.
Over 200 Chinese companies are listed in the US. And Americans invest billions of dollars in these entities. So it's imperative to protect investors from being fleeced by greedy corporates and opportunistic bankers. That's where the Public Company Accounting Oversight Board (PCAOB) comes in. The PCAOB is supposed to inspect the audits of public companies to make sure there's no funny business going on.
The problem is, China refuses to let them audit its companies. And now, the US is refusing to put up with it any longer. Why are they doing it now, you ask? Well, you can find out here.
Well, that's it from us. See you real soon!
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