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Tuesday, 03 May 2016

Stocks and Funds

Halliburton corporate offices in Houston, Texas April 6, 2012.

Halliburton owners may have to speak up again

03 May 2016

CEO David Lesar passed on using Tuesday’s earnings call to apologize after overconfidence in a failed deal cost the company $3.5 bln. Nearly 30 pct of shareholders dissed Halliburton’s executive pay last year. Maybe they’ll send a sterner message in this month’s annual vote.

Steven Cohen in California, U.S., May 2, 2016.

Steve Cohen returns as beau of Wall Street ball

03 May 2016

The billionaire investor starred at Michael Milken’s annual bash, warning global grandees that overcrowding in the hedge-fund world is lowering returns. Now managing $11 bln of mostly family money, his joviality seemed justified: U.S. watchdogs left him bruised but unbowed.

Mark Zuckerberg, founder of Facebook, in Barcelona, Spain, February 21, 2016.

Retrograde governance will cost Facebook little

03 May 2016

The social network’s new non-voting shares have been challenged in court. A similar spat at Google ended with the search giant paying shareholders just $522 mln – 0.15 pct of its market cap. An equivalent result at Facebook would entrench boss Mark Zuckerberg’s control cheaply.

CFO Kirt Gardner (R) talks to CEO Sergio Ermotti of Swiss bank UBS before an annual news conference in Zurich, Switzerland.

UBS's golden ratio shows cuts are vital

03 May 2016

The Swiss bank is rejigging its wealth unit after trading income as a percentage of invested funds dipped to historic lows. Group return on equity was just 5.1 pct in the first quarter. UBS depends on rich folks being active. When they aren’t, the only option is to trim expenses.

Bids and Buyouts

Human genetic material is stored at a laboratory in Munich May 23, 2011.

Medical firms' $18 bln merger lacks clear logic

03 May 2016

Healthcare data miner IMS is uniting with Quintiles, a manager of drug trials. Each will own about half the combined company, and other than some cost savings, the reasons for combining are a bit nebulous. The presence of buyout firm TPG on both sides may offer some clues.

Halliburton corporate offices in Houston, Texas April 6, 2012.

Halliburton-Baker blowup reverberates beyond oil

02 May 2016

The $35 bln oil-services deal is the latest to buckle under regulatory pressure this year, after Pfizer’s bid for Allergan. Baker Hughes pockets a $3.5 bln break fee at Halliburton owners’ expense. Punishing the boss and board would yield a more enduring lesson in M&A hubris.

Apollo Management LP Managing Partner Leon Black speaks at the panel discussion "Global Opportunities in Private Equity" at The Milken Institute Global Conference in Beverly Hills, California May 2, 2011.

Apollo Education owners risk flunking buyout 101

02 May 2016

Bidders for the University of Phoenix parent bumped their offer 5 pct to $1.14 bln. That’s generous, considering the for-profit college faces regulatory crackdowns and dimming financial prospects. With a vote on the deal imminent, investors grubbing for more may look like dunces.

The logo of Gannett Co is seen outside their corporate headquarters in McLean, Virginia, July 23, 2013. A decline in newspaper advertising dragged down Gannett Co's second-quarter results, underscoring the company's need for new revenue streams.

Tribune's foot dragging on bid is bad stewardship

02 May 2016

Gannett is asking Tribune shareholders to withhold votes for directors after going public with an $813 mln offer for the L.A. Times publisher. Trib Chair Michael Ferro looks like he’s stalling. Small wonder: He and his management team will struggle to beat Gannett’s 63 pct premium.

Money and Markets

British Prime Minister David Cameron (L) with Brendan Barber, former general secretary of the Trades Union Congress (R) at a Caterpillar engine factory in Peterborough, Britain, 28 April 2016. Britain will vote whether to remain or leave the EU 23 June.

UK slowdown has a silver lining for Cameron

03 May 2016

An unexpected contraction in manufacturing is the latest sign that growth is losing momentum. Usually such a slowdown would be unmitigated bad news for the government. Right now, it’s all useful PR fodder for Prime Minister David Cameron in his battle to keep Britain in the EU.

A pedestrian walks past an advertising billboard promoting home loan interest rates in Sydney, Australia, April 29, 2016.

Australian central bank comes to miners' aid

03 May 2016

Cutting interest rates to an all-time low of 1.75 percent will weaken the currency and help stave off deflation. Reversing the Aussie dollar’s recent rise will help make miners Down Under more competitive. That offsets the risk of further heating up the country’s housing market.

Russian President Vladimir Putin attends a joint news conference with Uzbek President Islam Karimov (not pictured) following their meeting at the Kremlin in Moscow, Russia, April 26, 2016.

Investors treat Russia like a wounded bear

03 May 2016

Russia’s escalating anti-Western rhetoric is damaging its chances of winning back foreign investment. Shifting the blame may keep Russians distracted from economic realities for a while longer, but it can’t replace hard cash.

Leicester City fans watch the Chelsea v Tottenham Hotspur game in pub in Leicester - 2/5/16. Leicester City fans celebrate winning the Premier League.

Leicester City upends "size is everything" mantra

03 May 2016

The lowly UK soccer club has, remarkably, won the Premier League. Victory in Britain’s top division had been the preserve of a five-club oligopoly since 1992, and Leicester was a 5000-1 outsider. Businesses facing seemingly unbreakable glass ceilings have a new role model.