Coca-Cola’s controversial share award scheme takes a bad idea to a foolish extreme. Paying workers in their employer’s paper makes no sense. The share price has too little to do with corporate performance, and the work of any single employee has little effect on the share price.
The company’s stagnant U.S. business plays second fiddle to its overseas holdings. Yahoo’s 24 pct stake in Alibaba accounts for almost 60 pct of its market value. The Chinese internet giant’s upcoming IPO strips investors of their biggest reason to follow the stock.
Wages represent 52 pct of GDP, and until they accelerate inflation won’t take hold. A leading think tank is even still worrying about deflation. But there are early hints that employees are beginning to regain some bargaining power. Higher prices could follow in 2015-16.
Some shareholders want the pharmacy chain to move its HQ to Europe to cut its tax bill. That’d boost earnings, but fly in the face of popular sentiment and a growing official international consensus against the tactic. Investors would do better to put their weight behind reform.
A U.S. court says a regulation forcing firms to disclose their use of African minerals is unconstitutional. The rule’s merits aside, the opinion weakens the public’s right to good information. Given the Supreme Court’s pro-business tilt, transparency could be in real trouble.
Investors had an appetite for most any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of sellers, including Moelis and Weibo, may encounter a more rational market than expected.
Madison Dearborn is getting $6.25 bln for the money manager it bought in the bubble. It should be a loss. But a mix of refinancing debt, buying a partner’s stake on the cheap and lucrative side investments helped the private equity firm break even. In this case, that’s a victory.