Oil, Phones, Drugs, Beer: Catch up with the latest edition of Corona Capital, a daily column updated throughout the day with short, sharp pandemic-related insights. Read it here
The fallout from Monday’s seismic drop of U.S. crude futures into negative territory is emerging. Interactive Brokers, an $18 billion U.S. market maker, said on Tuesday it was taking an $88 million provisionary loss after several customers who were calamitously long and wrong in futures contracts burned through their accounts’ equity. The company, which made $1.
Big losses are the natural consequence of large inflows of retail money into oil exchange-traded funds and other investing avenues this year. The unfortunate punters didn’t have to take physical delivery, but did hold contracts that were priced off ones that did, and they fell to minus $37.63. On a call, Interactive Brokers Chairman Thomas Pechy Peterffy said that there would be a big winner on the other side of the trades. He also acknowledged there would be other losers.
That’s not the end of it. The $27 billion company, which rivals China’s Huawei Technologies and Finland’s Nokia in building next-generation telecoms kit, said sales in the first three months were up 2% year-on-year, confirmation of telecoms firms still rolling out 5G networks. Even China, which spent most of the period in lockdown, only saw revenue drop 1%. That augurs well as Covid-19’s shockwave rolls around the world.
But its bread and butter business may take a hit. Roche has to roll out new drugs to offset the earnings hit when rivals replicate treatments that come off patent. New patients are needed for drug trials, but fewer people are being admitted to hospitals with non-coronavirus related ailments. CEO Severin Schwan’s only antidote: plough more money into the coronavirus fight.
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