Companies in the news ... and how they were assessed
Merlin Entertainments: safety shambles
Merlin Entertainments has “nothing to complain about”, said Alistair Osborne in The Times. It pleaded guilty to breaching health and safety rules over the Smiler rollercoaster crash last June at its Alton Towers theme park. So there’s “no point in arguing” about a crown court’s finding that it was caused not by human error – as claimed by Merlin – but by “the absence of a structured and considered system” of safety. The fine imposed, £5m, represents “loose change” for Merlin, said Nils Pratley in The Guardian – which is one reason why there is no “clamour in the City for senior resignations” over the crash, which injured 16 people, including two women who suffered leg amputations. But can the chairman, Sir John Sunderland, and long-time chief executive Nick Varney really continue in their posts with credibility? “The answer is surely no.” Merlin’s safety systems were deemed by the judge to be “woefully inadequate” and a “shambles” – leading to “a needless and avoidable accident in which those injured were fortunate not to have been killed or bled to death”. It’s clear that the men leading Merlin are remorseful – but sometimes remorse is not enough. “It’s time to go.”
Twitter: predators circle
Twitter is just ten years old, and it’s less than three years since its blockbuster IPO. Yet it appears “ready to throw in the towel” as an independent company, said James Titcomb in The Daily Telegraph. Having “struggled to repeat the magic formula that turned Facebook and Instagram into social media behemoths” – and wrestling with repeated losses, paltry growth and a stagnant share price – it is being circled by an array of potential buyers. Last Friday, Twitter shares surged 21% on reports that Google and cloud-computing outfit Salesforce were mulling offers; other rumoured potential purchasers, in a deal likely to be worth up to $30bn, include Disney, Verizon and Microsoft. If Twitter is sold in the next few weeks, it is likely to be “a friendly deal”, said Lex in the FT. However, a hostile takeover bid is at least a possibility, thanks to Twitter’s unusually egalitarian share structure. At many other tech companies, multi-class structures entrench the founders; not so at Twitter. Once potential buyers are engaged, it may be hard to bat them off, or even to do anything but accept the best offer by price.
Yahoo: security threat
Yahoo reported the largest data breach in history last week – affecting at least 500 million user accounts – months after it first detected signs of an intrusion dating back to 2014. The company blamed “state-sponsored” hackers, and called on customers to change their passwords and institute other protective measures. But “the largest fallout could be for Yahoo itself”, said The Washington Post. The long-faltering company this summer agreed to sell its core business for $4.8bn to telecommunications giant Verizon – but without telling Verizon about the data issue. That deal, and indeed the whole future of Yahoo – which appears to have had an “uncomfortably lax security culture” – must now be in jeopardy, said the FT. But the repercussions may well go far beyond Yahoo. After all, if a company whose business is “at the very heart of the world wide web” has insufficient security, what other sites and services may also be vulnerable?