Permian drillers tap new resource in wastewater 14 Jun 2018 U.S. shale operators extract four times more water than oil from wells in West Texas. Disposing the dirty liquid is costly and threatens growth. But some companies are treating and reusing water to cut costs. A few even could turn this into a second business in a parched world.
Gary Cohn only delayed inevitable trade war 14 Jun 2018 The Goldman Sachs banker who went to the White House says U.S. trade spats could wipe out the benefits of tax cuts he championed. President Trump may yet escalate his campaign against China. Cohn was a helpful buffer, but Trump’s anti-globalist instincts are now in full control.
Viewsroom: AT&T win is unlikely to muzzle watchdogs 14 Jun 2018 The telco firm prevailed against the DOJ and can now legally buy Time Warner for $85 bln. The green light doesn’t mean that regulators will roll over for other deals however. T-Mobile US and Sprint may still be in the crosshairs. Plus: An Australian bank cartel runs into trouble.
China’s DRAM dreams may trigger glut memories 14 Jun 2018 Consolidation, rising costs, and technological limits have turned memory-chip production from a cash-burning exercise into a profitable triopoly. Chinese firms’ efforts to break in – along with Beijing’s pricing investigation – risk eroding the industry’s good times.
SoftBank and WeWork co-create rocketing valuation 14 Jun 2018 The giant Vision Fund may inject more cash into the loss-making shared-office provider at nearly double its previous $20 bln worth. WeWork is growing fast, but that was already priced in. One test is whether SoftBank puts a lot of money where its mouth is, or only a little.
Fox M&A battle could favour Sky investors 14 Jun 2018 Comcast’s $65 bln offer for Rupert Murdoch’s group raises the stakes in the battle for the UK broadcaster. Even if the U.S. cable giant snags Fox, rival Walt Disney might pursue Sky to avoid coming away empty-handed. The risk for shareholders is that the bidders strike a truce.
Comcast throws $65 bln of caution to the wind 13 Jun 2018 The cable firm is offering 19 pct more than Disney to buy bits of Rupert Murdoch’s Fox – potentially leaving it slathered in $170 bln of debt. Boss Brian Roberts is normally a careful dealmaker. Embarking on this expensive, hostile pursuit suggests a serious fear of missing out.
Holding: As AT&T case ends, trustbuster woes begin 13 Jun 2018 Donald Trump’s Justice Department lost its bid to stop the telco’s $85 bln Time Warner merger, battering DOJ’s Obama-era image as tough but savvy. Weak legal claims baffled experts and stalled other deals. The watchdog can expect fresh charges of putting politics over the law.
Beware the rough end of the SPAC 13 Jun 2018 Blank-check companies are back in fashion, helped by a $550 million vehicle backed by Dan Loeb. These listings have changed since they first became popular a decade ago. Though the structures sound better, bad incentives can still leave long-term investors exposed.
Fed steps closer to horns of interest-rate dilemma 13 Jun 2018 The U.S. central bank raised rates again as expected. Low unemployment and building inflation will force the Fed to consider how high it should go to prevent overheating – a shift from worrying about keeping rates low to support the economy. Trade wars are another complication.
Look who’s sitting out the media M&A game 13 Jun 2018 AT&T will soon close its $85 bln deal for Time Warner. Comcast and Disney may fight over Fox. And yet among the big deals at least for now, Netflix, Amazon and Facebook are nowhere to be found. Their absence from the feeding frenzy may hint at the prospects for these mergers.
Emerging markets can mostly dodge Fed bullet 13 Jun 2018 U.S. central-bank tightening has a history of causing global turmoil, as in the 1980s Latin debt crisis. But developing countries can largely handle a rate hike, with flush reserves and reduced dollar-based debt. Troubles in Argentina and Turkey are essentially home-brewed.
AT&T deal approval doesn’t mean anything goes 13 Jun 2018 The U.S. Justice Dept gambled when it sued to block the $85 bln Time Warner sale. Its failure means business as usual for vertical mergers, like Comcast’s likely bid for Fox. Big firms that directly compete will still face tough scrutiny – and prosecutors eager for a clear win.
Hadas: This should be an anti-dollar moment 13 Jun 2018 Discontent with the world’s dominant currency is not new, but the Trump effect is something new. A trade circuit free from the U.S. president’s idiosyncratic America-first policies is urgently needed. The euro and renminbi can provide a base, but the politics are unpromising.
New ZTE regime could climb out of big hole 13 Jun 2018 The Chinese telecoms company lost some $3 bln of market value after its reprieve from a U.S. death sentence. That suggests concerns about the clean management sweep. If, however, ZTE can find decent leadership and stay out of trouble – big ifs – a 5G rollout holds real promise.
AT&T gets law right this time, but could regret it 12 Jun 2018 A judge cleared the telco’s $85 bln Time Warner purchase in a clean ruling against U.S. regulators who tried to block it. That’s a victory for CEO Randall Stephenson, but it could come with a winner’s curse. AT&T is new to the media business and has barely any room to cut costs.
Tesla job cull is more signal than maneuver 12 Jun 2018 Cutting 9 pct of workers won’t tip the $60 bln electric-car maker into profit. Even if it halved its sales and admin budget it would probably still lose money this year. There’s a message in the economizing, though: boss Elon Musk is eyeing small things, not just the big picture.
Ralph Lauren’s growth track runs through China 12 Jun 2018 The clothier aims to boost revenue by $1 bln by 2023. The 16 percent target seems bold given the label’s recent woes and upheaval in the retail sector. But the quintessential American brand’s provincialism may be its saving grace. It has room to expand in the People’s Republic.
Exxon muddies the picture with new trading push 12 Jun 2018 The $350 bln oil giant is bulking up in energy trading by poaching several veteran dealers from rivals. It could help mitigate fluctuations in the price of the commodity. But it also adds risk and opacity just as investors want otherwise, and does nothing for diversification.
Facebook is light on Washington friending skills 12 Jun 2018 Its lobbyists tried to do damage control in Congress as its data-sharing with China’s Huawei came to light. Their lack of answers left the impression they weren’t in the loop, and the company’s defensive tweets didn’t help. Facebook could use a lesson in diplomacy as well as transparency.