Market misses the point on Netflix – again 22 Jul 2010 The Web video company's shares tumbled 11 percent despite whipping profit estimates and gaining more subscribers than expected. Customers are watching more movies online, cutting revenue but boosting profit. Netflix should rise again we've seen this movie before.
Vodafone can’t brush off shareholder criticism 22 Jul 2010 The Ontario Teachers' Pension Plan has attacked the UK telco for its poor M&A record and is to vote against chairman's reelection. That sounds a bit extreme give the relatively good performance of Vodafone's shares. But Vodafone must heed some of the OTPP's concerns.
BlackBerry maker’s future looks far from rosy 21 Jul 2010 Research In Motion's stronghold in sales to U.S. companies has been cracked open by Apple and Google. An overseas push and price cuts offer temporary respite. And an upgraded operating system might help, too. But time is getting short for RIM to regain momentum.
BP’s $7 bln Apache deal ticks the right boxes 21 Jul 2010 The UK oil major's disposal programme is off to a good start with the sale of assorted noncore assets to U.S. peer Apache. True, this will have an impact on growth. But BP has proved it can get decent prices despite being a hurried seller, taking some pressure off further sales.
YouTube justice shakes up Russia 21 Jul 2010 The official variety has fallen far short in investigating the Hermitage lawyer's claims about a $230 million fraud. His boss has taken to the net to show two police officers' unlikely wealth, with more revelations promised. The publicity campaign seems to be gaining momentum.
Morgan Stanley’s risk aversion finally pays off 21 Jul 2010 The Wall Street firm led by James Gorman showed more resilience in the second quarter than rivals. Sure, a tax benefit helped. But advisory income held up well while trading revenue declined less than peers. Gorman's pledge to keep risk in check seems to be more than rhetoric.
U.S. finance bill signed; rapprochement now needed 21 Jul 2010 Although expected, the exclusion of JP Morgan s Dimon and Goldman's Blankfein from the financial reform signing ceremony suggests President Obama isn t yet easing up on Big Finance. That s a pity. While Washington needn't bow to business, repairing relations would benefit all.
AIA will struggle to untie AIG’s apron strings 21 Jul 2010 The Asian insurer hopes to use a Hong Kong IPO to reduce its U.S. governmentowned parent's stake below 50 pct. At the mooted $33 billion valuation, that looks unlikely. AIA's freedom may depend on selling some shares more cheaply but the sacrifice looks worthwhile for AIG.
BBVA bond shows not all Spanish banks are equal 21 Jul 2010 The lender has issued a 2 bln euro covered bond, the first by a Spanish bank since April. The cost is greater, but higher mortgage rates mean BBVA can still make a decent profit. That gives it a big advantage over Spain's smaller savings banks, which are shut out of the market.
Tiger hedge fund seeds need the extra help 21 Jul 2010 Julian Robertson s famous firm is beefing up operations to help more new funds get started and perhaps to reopen to outside investors for the first time in a decade. Fledgling funds need the support for now at least, new money seems to be going mostly to the giants.
Reckitt spices up product range with SSL bid 21 Jul 2010 The consumer goods group is paying 2.5 bln pounds to add Durex condoms and Scholl sandals to its power brands. Cost savings will double SSL's earnings, and Reckitt is wellplaced to squeeze out more growth. Big pharma could crash the party, but the price is already pretty full.
Bank of England worries as UK and world weaken 21 Jul 2010 Only one MPC member wants a rate rise, despite high inflation. No wonder, when lending data is poor, house prices seem set to fall and wages may drop. Besides, few countries are set to chop fiscally like the UK. Britain looks especially vulnerable in a wobbly global economy.
Poor disclosure a bad omen for EU stress tests 21 Jul 2010 Friday's announcement of stress tests results are supposed to comfort investors. But hints of a neartotal pass rate have spawned fears of a whitewash. Now it seems investors will not get enough information to make up their own minds. This exercise is in danger of being a flop.
M&A toolkit can, sometimes, benefit shareholders 21 Jul 2010 Research supports the idea that shareholders of acquisitive companies usually get the short end of the stick. But that s not always the case. Stanley Black & Decker, the big U.S. tool combo that merged earlier this year, is shaping up to be a notable exception.
Hedge funds stranded in cautious waiting loop 21 Jul 2010 Despite market recovery in 2009, funds surprisingly didn't pull in new money in the first half of this year. Industry assets are near flat. So is performance. That's better than stock markets, but not enough to attract new investors. Hedgies need friendlier markets to grow.
China can’t totally ignore foreign critics 21 Jul 2010 GE and BASF have boldly criticised the country's increasing protectionism. They need to accept that the old way, where companies gave technology in return for market access and cheap labour, has ended. A richer China can be more demanding. Yet foreigners still hold some cards.
Playboy Mansion could be life of the bid party 20 Jul 2010 After years of fun pairing Playmates with Hollywood's Blist, Hugh Hefner's LA home now warrants more serious consideration. It's among Playboy's hidden assets. To give shareholders a fair shake on a sale of the company, the board may need to push its founder to pay more.
Complexity of tax simplification may baffle UK 20 Jul 2010 The Commissioners for the Reduction of the National Debt were established in 1786. That didn't quite work out. The new Office of Tax Simplification's aim is similarly worthy, but tax simplification can only make political progress when there are tax cuts to ease the losers' pain.
Banks’ new watchdog master could give it real bite 20 Jul 2010 The new consumer finance regulator will have vast power to create rules that could crimp banks profits. And one of the top candidates to lead it is gadfly academic Elizabeth Warren. Wall Street s financial innovators will need to redouble efforts on the retail side.
iPad’s halo effect may rope in corporate customers 20 Jul 2010 Apple posted another stunning quarter, thanks to consumer adoption of the company s electronic tablet. The bigger hope will be to use the iPad as Trojan Horse for the corporate market, which has been reluctant to switch to iPhones and Macs.
How bad was Goldman’s Abacus deal? 20 Jul 2010 Where does it rank compared to Madoff's scam, Enron's fraud or tainted research during the dotcom bubble? Goldman's behaviour was naughty. But Chris Hughes argues that it doesn't deserve to be in the lower levels of a financial inferno.
UK investors can’t beat inflation any more 20 Jul 2010 The government's savings agency has stopped issuing inflationlinked certificates after a rush of buyers threatened to breach its selfimposed limits. The Bank of England insists that inflation is about to fall, but savers clearly fear that rising prices remain a potent threat.
Goldman shows its vulnerable side 20 Jul 2010 The Wall Street firm posted disappointing Q2 earnings and a lowly 9.5 pct return on equity as some trades went wrong. Most businesses underperformed most rivals though not enough to prove the SEC case sent clients running. The relative weakness may actually serve Goldman well.
Ocado’s cut-price float doesn’t deliver value 20 Jul 2010 The UK online grocer has slashed the price range for its IPO, with the previous floor now marking the top end. The substitution will satisfy some investors. But the delivery is the same a highly speculative investment whose valuation relies on rosy growth projections.
Nokia could do with management shake-up 20 Jul 2010 The world's largest handset maker has fallen behind highend rivals Apple and Google, and failed to manage investor expectations. The board is reportedly looking for a replacement for CEO OlliPekka Kallasvuo. That makes sense. Nokia needs an outsider and innovator at the helm.
C&W caught napping by UK public spending cuts 20 Jul 2010 Cable & Wireless Worldwide has warned that government spending cuts will dent earnings, knocking the telecom group's shares by 15 pct. The news will erase doubts that austerity measures are real. Outsourcing may benefit in the long run, but companies should expect nearterm pain.
Imagine Wall Street settling scores through boxing 20 Jul 2010 A handful of young financial professionals are jumping into the ring as part of NY s Corporate Challenge Boxing. But the best brawls would pit the industry s top brass against their enemies. Think Lewis versus Thain, or Pandit against Bair.
Is Goldman rebasing comp at a lower level? 20 Jul 2010 For the second quarter in a row, the investment bank's compensation ratio has been only 43 percent. Goldman used to pay out around 50 percent of revenue. For ordinary mortals, the numbers are still staggering. But it looks like Goldman may be listening.
Commercial property still at risk from bond slump 20 Jul 2010 UK property firm Capital & Regional has extended a 1 bln pound bond, one of several recent workouts in Europe's 150 bln euro CMBS market. But negative equity and conflicts between creditors will complicate future restructurings. A wave of asset sales still looks likely.
EU bank stress tests create capital confusion 20 Jul 2010 Regulators have not spelled out which measure of capital will be used in this week's tests. Examining higherquality core Tier 1 capital would force banks to raise more cash but should create more confidence. However, states still differ over how core capital should be defined.