{"id":476847,"date":"2026-02-13T07:27:13","date_gmt":"2026-02-13T07:27:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/476847\/"},"modified":"2026-02-13T07:27:13","modified_gmt":"2026-02-13T07:27:13","slug":"how-to-deal-with-the-claude-crash-relx-should-keep-buying-back-shares-then-buy-more-nils-pratley","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/476847\/","title":{"rendered":"How to deal with the \u201cClaude crash\u201d: Relx should keep buying back shares, then buy more | Nils Pratley"},"content":{"rendered":"

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\u2019s got a name \u2013 the \u201cClaude crash\u201d<\/a>, referencing the plug-in legal products added by the AI firm Anthropic to its Claude Cowork office assistant.<\/p>\n

This launch, or so you would think from the panicked stock market reaction<\/a> in the past few weeks, marks the moment when the AI revolution rips chunks out of some of the UK\u2019s biggest public companies \u2013 those in the dull but successful \u201cdata\u201d game, including Relx, the London Stock Exchange Group, Experian, Sage and Informa.<\/p>\n

Relx, the former Reed Elsevier, whose brands include the Lancet and LexisNexis, is the most intriguing in that list. The company\u2019s description of itself contains at least five words to provoke a yawn \u2013 \u201ca global provider of information-based analytics and decision tools for professional and business customers\u201d \u2013 but the pre-Claude share price was a thing of wonder. It was \u00a35 in 2012 and \u00a341 in May last year, at which point Relx was worth \u00a370bn-ish and was the fifth-largest company in the FTSE 100 index.<\/p>\n

And now? The shares have halved from their highs and the biggest falls have come since Claude\u2019s supposedly terror-inducing plug-ins appeared. The market has flipped from seeing Relx as an AI winner \u2013 because it is using AI to boost existing products \u2013 to fearing its beautiful 34% profit margin will implode.<\/p>\n

What does the company itself think? Well, Thursday\u2019s full-year results were not titled \u201cthe stock market\u2019s gone mad\u201d, because that\u2019s not Relx\u2019s style. But the numbers and statement oozed confidence: revenues up 7% to \u00a39.6bn and operating profits up 9% to \u00a33.3bn; a forecast of \u201canother year of strong growth in 2026\u201d; a dividend raised 7%; and a bigger share buyback of \u00a32.25bn.<\/p>\n

Chief executive Erik Engstr\u00f6m also offered a coherent argument for why the evolution of AI would \u201cremain a key driver of customer value and growth in our business for many years to come\u201d.<\/p>\n

Short version: AI tools are not new; the recent launches that have caused the fuss are \u201cworkflow\u201d 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.<\/p>\n

Some of Relx\u2019s 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 \u201cjudgments, inferences and interpretations gathered over decades\u201d 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.<\/p>\n

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 \u201cworkflow\u201d products, but it is never going to surrender its impossible-to-replicate proprietary information because that\u2019s where the value in its business lies.<\/p>\n

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\u2019s \u201ccompetitive moat\u201d, as the analysts say, is as deep as advertised. The issue, in part, is fear of the unknown.<\/p>\n

But Relx\u2019s tactical response should be obvious. If it thinks growth can be relied upon \u201cfor many years to come\u201d, as Engstr\u00f6m says, and, if the shares are available at half the price of a year ago, just keep the buybacks rolling.<\/p>\n

This year\u2019s \u00a32.25bn version, up from \u00a31.5bn, 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 \u2013 assuming, of course, that the projections for the business itself really are solid.<\/p>\n

Bigger buybacks, reportedly, are also the activist investor Elliott Management\u2019s prescription at LSEG, where the AI worries and counter-arguments are similar. If you are truly confident, it is the right thing to do.<\/p>\n","protected":false},"excerpt":{"rendered":"As the FTSE 100 index bobs along close to all-time highs, it is easy to miss the quiet…\n","protected":false},"author":2,"featured_media":476848,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-476847","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/476847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=476847"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/476847\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/476848"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=476847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=476847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=476847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}