Latest news with #regulatoryhurdles
ABC News
5 days ago
- Business
- ABC News
Queen's Wharf job fears as Star seeks approval for casino deal
A deal between gambling giant Star Entertainment and its partners in Brisbane's Queen's Wharf casino still faces regulatory hurdles and has left employees with questions about their future at the embattled precinct. Star told investors on Tuesday morning it had finally signed a deal with its Hong Kong partners — including one which was once linked to organised crime figures. The deal would see Star give up assets, including its 50 per cent stake in the $3.6 billion Queen's Wharf casino complex, and the Treasury car park and hotel. In exchange, Star would receive a $53 million cash injection and stakes in Gold Coast hotels near its casino there. The deal still needs to pass regulatory checks and be approved by the Queensland government. Star has struggled financially amid regulatory inquiries and increasingly tough gaming regulations. In Brisbane, the Queen's Wharf precinct was originally planned for 2022, but years of lockdowns, flooding and a mould outbreak were among many issues which delayed its opening to August 2024. In March, in a bid to stave off insolvency, Star agreed to sell its 50 per cent stake in Queen's Wharf to its joint venture partners. That announcement marked the beginning of a turbulent five months, during which those same partners announced they would terminate the agreement. This week, that was walked back, with Star announcing a new deal had finally been signed. A Queensland government spokesperson said the deal between Star and its joint venture partners — Chow Tai Fook Enterprises (CTFE) and Far East Consortium — was not yet finalised. "The agreement … is subject to regulatory approvals, which will be considered following the receipt of formal submissions," they said. The government would not say whether it held concerns about Queen's Wharf employees working under owners with chequered legal histories, but said jobs and staff welfare were top priorities. "The Crisafulli government's priority, as always, remains on the workers at the Star," the spokesperson said. Griffith University Business School's Graeme Hughes said the deal would come as a relief to Star Entertainment if approved. "For Star, the Queen's Wharf sale is a strategic retreat from what has become a financial quagmire, with development costs blowing out by more than $1 billion," he said. Mr Hughes said the deal's success — and a lifeline for Star — hinges on getting the "green light" from regulators. "At the core of the issue is the transfer of a major casino licence to a new ownership structure," he said. "Regulators will scrutinise Chow Tai Fook and Far East to ensure they meet the stringent probity requirements necessary to control such a significant asset. "The stakes are high." The deal has left employees with questions about the future of their jobs in the precinct. United Workers Union casinos director Andrew Jones said the union had been supportive of the Star Brisbane through many of its hurdles. "The latest news once again increases uncertainty for members. We're seeking further information from the company about this announcement," he said. "Our consistent position is that any future structure of Star Brisbane should prioritise the job security of workers, which will give stability to the casino, the workers and their families."
Yahoo
26-07-2025
- Business
- Yahoo
Airbnb's Cash Cow Can Thrive Despite Its Challenges
Key Points Airbnb faces regulatory hurdles that management must attempt to overcome. The company benefits from significant demographic tailwinds. Airbnb is a cash-flow machine and a great stock to own. 10 stocks we like better than Airbnb › The travel industry is a lucrative but tricky realm in which to do business. This is especially true when it comes to short-term rentals. Navigating local regulations and international expansion while satisfying thousands of hosts and even more guests are a few of the daunting challenges faced by Airbnb (NASDAQ: ABNB), one of the leaders in the space. Its management is working to increase its cooperation with localities and promote what it views as commonsense regulations while maintaining its ability to operate freely. Still, in some major markets, such as Hawaii, New York City, and Paris, local and state governments have imposed stringent restrictions on how short-term rentals can be operated. Many homeowners' associations also have rules that are unfriendly to owners who want to turn their properties into short-term rentals. However, the news isn't all bad for Airbnb. The market it operates in is massive and continues to grow. There are also demographic tailwinds, as younger generations tend to gravitate toward Airbnbs more than their parents. Short-term rentals (labelled vacation rentals on the chart below) make up a significant portion of a market that is forecast to exceed $1.1 trillion by 2029. What does this mean for Airbnb? Cash, and lots of it. Terrific business model Airbnb is just a software platform at its core. There is also a customer service element. However, companies in this industry lack the factories, expensive equipment, and other major infrastructure that many other industries have. Property and equipment purchases are often referred to as capex (short for capital expenditures) and reduce the amount of cash a company can keep. Free cash flow is one reason why software companies, such as CrowdStrike (NASDAQ: CRWD) and Palantir (NASDAQ: PLTR), often trade at higher valuations than companies in other industries. For instance, Intel (NASDAQ: INTC), a semiconductor designer and manufacturer, spent $5.2 billion on capex in its most recent quarter, a whopping 40% of its revenue. Airbnb spent just $14 million last quarter on capex, less than 1% of its revenue. Meanwhile, its free cash flow -- the amount that's left over after operating expenses and capital expenditures -- has soared. The $4.4 billion shown above is 40% of revenue over the same period. A 40% free cash flow margin is an incredible figure and bodes well for shareholders. Airbnb uses its cash to fund growth initiatives and reward shareholders through stock buybacks, which reduce the number of shares available, thereby increasing the value of each remaining share. Think of a company like a giant pizza, and every share is a slice. If the number of slices decreases, each of the remaining slices represents a larger portion of the pizza. Airbnb has repurchased $3.5 billion worth of its stock over the last 12 months, accounting for approximately 4% of its total market capitalization. It's likely to continue in this pattern for a long time, given its fantastic cash-producing business model. Is Airbnb a buy? Since free cash flow is what attracts me to Airbnb, the price-to-free-cash-flow ratio is my preferred metric for valuing the company. Airbnb currently trades for around 20 times free cash flow. This is well under its 2024 high of 29, and slightly below its 3-year average of 22. It is also lower than rival Booking Holdings, which trades for 23 times its own excellent free cash flow. In short, Airbnb is a better value based on cold, hard cash. Booking Holdings is also a fantastic company and is worth having in a portfolio. However, its market cap is more than twice that of Airbnb's, which means that Airbnb could have an easier time growing faster from here. At this valuation, it is an excellent buy-and-hold stock. Should you buy stock in Airbnb right now? Before you buy stock in Airbnb, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Airbnb wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Bradley Guichard has positions in Airbnb and CrowdStrike. The Motley Fool has positions in and recommends Airbnb, CrowdStrike, Intel, and Palantir Technologies. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. Airbnb's Cash Cow Can Thrive Despite Its Challenges was originally published by The Motley Fool
Malay Mail
19-06-2025
- Business
- Malay Mail
Indonesian regulatory roadblocks stall Grab's US$7b mega play for GoTo, sources say
SINGAPORE, June 19 — Singapore-based Grab's plan to acquire Indonesia's GoTo to create a dominant South-east Asian ride hailing and food delivery company has run into regulatory hurdles, three sources said, casting a cloud over a potential deal. Reuters reported in May Nasdaq-listed Grab was looking to strike a deal to buy smaller rival GoTo in the second quarter and had hired advisers to work on the proposed acquisition. A deal could value GoTo at around US$7 billion (RM29.8 billion). The two companies now need more time to agree on a deal after the Indonesian government proposed some conditions for the plan to go through, said the three sources, who have knowledge of the deal discussions. The Indonesian government is examining how the potential merger would impact job welfare and market competition in South-east Asia's biggest and most populated economy, said two of the sources. In May, hundreds of ride-hailing drivers and riders joined protests in several cities across Indonesia over low wages and to oppose a Grab-GoTo merger, fearing the creation of a monopoly that would lead to job cuts and raise prices for consumers. The government also wants the merged entity to guarantee more benefits, such as better fees and bonuses to riders and drivers, said one of the sources, who did not wish to be identified as the deal talks are confidential. Grab said last week it stood by its previous statement that it was not involved in any discussions for a potential transaction with GoTo and has not entered into any definitive agreements. Separately, Grab also raised US$1.5 billion in a convertible notes offer, citing acquisitions among the capital's intended uses. GoTo, which is trading at a valuation of US$4.4 billion, referred Reuters to its previous regulatory disclosures that there has been no agreement with any party about a potential transaction. Indonesia's transport ministry declined to comment. Optimising operations GoTo is 73.90 per cent-owned by foreign investors, including SoftBank Group and Taobao China Holding, a unit of China's Alibaba Group, with the rest owned by Indonesian investors, according to its 2024 annual report. SoftBank's SVF GT Subco (Singapore) Pte Ltd and Taobao are GoTo's top two shareholders, holding 7.65 per cent and 7.43 per cent stakes, respectively, the report showed. When asked to comment on a potential deal involving GoTo and Grab, Sufmi Dasco Ahmad, the deputy speaker of the Indonesian parliament, told Reuters the government wants GoTo to be majority-owned by Indonesians. Dasco, who is also a senior member of Indonesia President Prabowo Subianto's ruling party, did not detail how GoTo can be majority-owned by Indonesians. He also did not comment on any conditions the government has set for the potential merger. Deputy Indonesian manpower minister Immanuel Ebenezer, whose agency oversees employment, said he has no information on any conditions set for a Grab-GoTo merger. A merger would enable the two companies, which, according to LSEG data, have been posting annual net losses since their IPOs, to cut costs by optimising operations. Grab, with a current market value of about US$19 billion, is currently worth about half the US$40 billion when it merged with a blank-check company to list on the Nasdaq in December 2021. — Reuters
