BREAKINGVIEWS

Soros punches new $18 bln hole in societal ills

17 October 2017

The hedge funder who took on the Bank of England has given most of his fortune to his charity, making it the second-largest in the U.S. behind the Bill and Melinda Gates Foundation. Conservatives may moan, but his causes of human rights, democracy and fairness need support.

China’s iQiyi is like Netflix with extra challenges

17 October 2017

The Chinese video-streaming service is eyeing a debut on U.S. markets next year and already inviting comparisons to its American partner. Both are burning cash on new content to lure fans. Fickle consumers and limited appeal abroad stand in the way of a $10 bln-plus valuation.

Goldman pips Morgan Stanley on style not substance

17 October 2017

Lloyd Blankfein’s firm bested its Wall Street rival on quarterly earnings, thanks mostly to lumpy gains on equity investments and strong M&A fees. Longer term, the broader diversification and stable trading business James Gorman has crafted is becoming more attractive.

Morgan Stanley staff have the most to cheer about

17 October 2017

Rival Goldman Sachs pays its people more on average, but James Gorman’s firm has boosted comp and benefits by 9 pct this year, almost double the raise of its rival. JPMorgan bankers face a pay cut. Asset-management employees, though, can afford to pop some champagne corks.

Investors choke on generic-drug deal complexity

17 October 2017

The merger of Amneal with Impax, worth some $9 bln in combined enterprise value, brings scale, savings and a bigger business for a respected CEO. But the larger firm is private, its owners are selling down, and there’s a wacky tax element. No wonder Impax owners aren’t loving it.

Heads or tails, Mark Carney loses

17 October 2017

British inflation has hit 3 percent, the highest level since 2012. No wonder the Bank of England chief is hinting policy rates may soon rise. Carney’s problem is that he will be criticised for hurting a slow-growing economy if he hikes and accused of inconsistency if he delays.

Credit Suisse breakup faces trading conundrum

17 October 2017

An activist investor wants to split the Swiss bank into three parts. On paper, the private banking and asset management units alone justify its $41 bln market value. But the ailing investment bank – including an estimated $250 bln of derivatives – would struggle to stand alone.

Vivendi can live with Italy’s “golden power” move

17 October 2017

Premier Paolo Gentiloni wants Telecom Italia to install state-backed directors and a special appointee to handle security matters. It’s a headache for top shareholder Vivendi. But government sentinels are preferable to being forced to spin off assets or accept state investment.

Pearson’s improved report card could be erased

17 October 2017

The education publisher issued a slightly more optimistic forecast for operating profit and said its U.S. textbook business is unlikely to repeat its catastrophic 2016. But Pearson has misread its key market before. The shift to digital publishing still looks painful.

Danone has to work to milk turnaround tale

17 October 2017

Strong third-quarter sales lifted the French yogurt maker’s shares to record highs. Rebounding Chinese demand will help make the most of a strong portfolio of brands. But cost cuts and making a success of its WhiteWave acquisition are key ingredients for an even richer valuation.

Netflix valuation outstrips burgeoning opportunity

16 October 2017

The $86 bln video-streaming service hit an all-time high after Comcast and AT&T warned of a fall in subscribers. Pay-TV customers cutting the cord should mean more viewers for Netflix. But even that and a recent fee hike don’t justify the firm trading at a sky-high multiple.

Allergan’s latest drug wheeze has bad side-effects

16 October 2017

The firm’s stock fell 5 pct after a judge invalidated a key medication’s intellectual property and said using a Native American tribe to protect the patents was a “ploy.” Allergan’s plan was too clever by half. With President Trump on the warpath, it does the industry no favors.

Even a distressed sale may not revive Bombardier

16 October 2017

The Canadian firm is weighing a sale or new investor for its aerospace division. That’ll be a tough task as its regional jet business is shrinking and U.S. tariffs threaten its bid to compete with Boeing. Bombardier’s cash burn points to a continued decline.