How to deal with the “Claude crash”: Relx should keep buying back shares, then buy more | Nils Pratley
As the FTSE 100 index bobs along close to all-time highs, it is easy to miss the quiet share price crash in one corner of the market,It’s got a name – the “Claude crash”, referencing the plug-in legal products added by the AI firm Anthropic to its Claude Cowork office assistant,This launch, or so you would think from the panicked stock market reaction in the past few weeks, marks the moment when the AI revolution rips chunks out of some of the UK’s biggest public companies – those in the dull but successful “data” game, including Relx, the London Stock Exchange Group, Experian, Sage and Informa,Relx, the former Reed Elsevier, whose brands include the Lancet and LexisNexis, is the most intriguing in that list,The company’s description of itself contains at least five words to provoke a yawn – “a global provider of information-based analytics and decision tools for professional and business customers” – but the pre-Claude share price was a thing of wonder.
It was £5 in 2012 and £41 in May last year, at which point Relx was worth £70bn-ish and was the fifth-largest company in the FTSE 100 index,And now? The shares have halved from their highs and the biggest falls have come since Claude’s supposedly terror-inducing plug-ins appeared,The market has flipped from seeing Relx as an AI winner – because it is using AI to boost existing products – to fearing its beautiful 34% profit margin will implode,What does the company itself think? Well, Thursday’s full-year results were not titled “the stock market’s gone mad”, because that’s not Relx’s style,But the numbers and statement oozed confidence: revenues up 7% to £9.
6bn and operating profits up 9% to £3.3bn; a forecast of “another year of strong growth in 2026”; a dividend raised 7%; and a bigger share buyback of £2.25bn.Chief executive Erik Engström also offered a coherent argument for why the evolution of AI would “remain a key driver of customer value and growth in our business for many years to come”.Short version: AI tools are not new; the recent launches that have caused the fuss are “workflow” products for storing, sorting and reviewing documents for specific projects; Relx mostly fishes in the smaller market for must-have information that is comprehensive and can be relied upon in court.
Some of Relx’s data may be public, some may have been public in the past but no longer is so; some is hard to find; some is licensed; some is proprietary; it all comes with “judgments, inferences and interpretations gathered over decades” that are useful to scientists, lawyers, insurance and City professionals and risk assessors; and AI may assist in that value-adding process, or just make the stuff easier for customers to use.His other big point is that Relx is free to do limited licensing deals with AI companies if it wishes, and can continue to launch its own “workflow” products, but it is never going to surrender its impossible-to-replicate proprietary information because that’s where the value in its business lies.It was good for a 2% bounce in the share price, which is better than nothing, but still suggests market worries about where the AI evolution goes next, and whether Relx’s “competitive moat”, as the analysts say, is as deep as advertised.The issue, in part, is fear of the unknown.But Relx’s tactical response should be obvious.
If it thinks growth can be relied upon “for many years to come”, as Engström says, and, if the shares are available at half the price of a year ago, just keep the buybacks rolling.This year’s £2.25bn version, up from £1.5bn, equates to 6% of the entire equity base.If it keeps up that pace for a few years, it will get a serious boost to earnings per share – assuming, of course, that the projections for the business itself really are solid.
Bigger buybacks, reportedly, are also the activist investor Elliott Management’s prescription at LSEG, where the AI worries and counter-arguments are similar.If you are truly confident, it is the right thing to do.
History hangs heavy over Calcutta Cup but England’s young side can turn tartan tide
In one of sport’s weirder coincidences, England are about to play must-win games against Scotland in both rugby and cricket on the same day. The forecast 3C temperatures for the Calcutta Cup encounter may be cooler than in Kolkata – appropriately the venue for the T20 World Cup group fixture – but a white-hot contest inside a chilly Murrayfield can be absolutely guaranteed.Because this particular collision, the 144th since the sides first met at Raeburn Place in 1871, looks set to shape the Six Nations prospects of all involved. To say Scotland are under additional pressure following their defeat by Italy in round one is to state the obvious. And England, too, will take the field knowing the time has come to demonstrate whether or not they are the real deal
From vertigo to Van Gogh: 10 things you may have missed at the Winter Olympics
Benoît Richaud is working on the ice with 13 countries, with uniform changes to match, and Korean skiers are having nightmares on waxDomen Prevc set a men’s ski jump world record of 254.5m on the Planica flying hill in Slovenia last March, known for its steepness and long jumps. Germany’s Philipp Raimund sat it out – he suffers from vertigo. “From time to time, I have the issue that my body is reacting without me controlling it,” he said. “It’s like I am just observing myself while something has a tight grip on me
Patriots’ Stefon Diggs pleads not guilty to assault, strangulation charges
New England Patriots wide receiver Stefon Diggs on Friday pleaded not guilty to felony strangulation and other criminal charges stemming from an alleged dispute with his personal chef.The arraignment at Dedham District Court in Massachusetts was postponed until after Super Bowl LX so Diggs could play in the NFL championship game. At the arraignment, Diggs was scheduled to next appear for a pretrial hearing on 1 April.According to court records, the chef told Dedham officers she and Diggs argued about money he owed her for her work. During the 2 December encounter at his home, she said, he “smacked her across the face” and then “tried to choke her using the crook of his elbow around her neck”, leaving her feeling short of breath
Winter Olympics thrills, FA Cup magic and the Six Nations – follow with us
Emillia Hawkins kickstarts the weekend’s football programme with our unmissable rolling blog that rises early to provide all the breaking news from around the grounds as the FA Cup hoves into view. Expect followup from Friday’s two ties – Hull v Chelsea and Wrexham v Ipswich – plus news and buildup to Saturday’s eight fourth-round matches, bookended with West Ham’s lunchtime trip to Burton and Liverpool hosting Brighton at 8pm. There are five Championship matches and a full programme in Leagues One and Two. In Europe, Real Madrid and Bayern Munich are in action, while in Serie A Inter meet Juventus in the evening’s derby d’Italia. Why not join the conversation by sending your thoughts to matchday
Skating body defends Olympic judging after French duo’s ice dance gold
The International Skating Union (ISU) has defended the integrity of Olympic ice dance judging after a single judge’s scoring gap became central to the outcome of the gold medal contest, insisting variations across panels are expected and that safeguards exist to prevent bias from determining results.In a statement released on Friday, the governing body rejected suggestions that the judging system failed during the competition, in which France’s Laurence Fournier Beaudry and Guillaume Cizeron narrowly defeated Americans Madison Chock and Evan Bates in one of the closest and most disputed finishes of the Milano Cortina Games.“It is normal for there to be a range of scores given by different judges in any panel and a number of mechanisms are used to mitigate these variations,” an ISU spokesperson said. “The ISU has full confidence in the scores given and remains completely committed to fairness.”Under the ISU judging system, the highest and lowest scores for each element and programme component are automatically discarded before the remaining marks are averaged – a process known as a trimmed mean – which is designed to reduce the influence of outlier judging
Ukrainian athlete’s appeal for Winter Olympics reinstatement dismissed by Cas
The Ukrainian skeleton racer Vladyslav Heraskevych has lost his appeal to compete at the Winter Olympics after the court of arbitration for sport ruled that the International Olympic Committee guidelines banning his “helmet of memory” were fair and proportionate.Heraskevych had gone to Cas after being dramatically removed from the men’s competition on Thursday only 45 minutes before it was due to start because of his helmet, which depicts 24 athletes and children killed by Russia.Download the Guardian app from the iOS App Store on iPhone or the Google Play store on Android by searching for 'The Guardian'.If you already have the Guardian app, make sure you’re on the most recent version.In the Guardian app, tap the Profile settings button at the top right, then select Notifications
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