Three’s a crowd in Zynga’s ownership structure 6 Jul 2011 It's bad enough for shareholders when companies have two sets of shares, as they invite bad governance habits and valuation discounts. Now Zynga is going for a trio of voting rights, with founder Mark Pincus in a class of his own. The innovation shouldn't be copied.
Portugal must heed Moody’s second-bailout warning 6 Jul 2011 The rating agency's downgrade may look harsh, as Lisbon is just beginning to implement a tough austerity plan in exchange for its first EU bailout. A junk rating may also hurt the country's finances. But it's a reminder that Portugal cannot afford to stray from its chosen path.
The seven habits of highly effective watchdogs 5 Jul 2011 The crisis showed many bank regulators up as ineffective. Sheila Bair's five years at the U.S. FDIC may offer a potential exception. A potted banking regulator's version of the 1989 selfhelp tome, The Seven Habits of Highly Effective People, sums up Bair's tenure.
Descent of MAN shows failings of German M&A rules 5 Jul 2011 Outside shareholders have lost control of the truck maker without receiving a premium. Investors did not have to accept VW's clever lowball bid. But lax German takeover rules tilted the field against them. It's another reminder that the dysfunctional regime needs to change.
Bank of Moscow exposes Russian regulatory void 5 Jul 2011 The $14 billion bailout of Russia's fifth largest lender shows how flimsy Russian bank regulation remains. It would be naïve to imagine that such problems are isolated. Reforms are needed to bolster confidence, but the culture of evasion will be hard to eradicate.
Brazil steps in it by siding with Carrefour deal 5 Jul 2011 A proposed tieup between French retailer Carrefour and Pao de Acucar meshes with Brasilia's desire to create national champions on a global stage. But the government seems rightly, if belatedly, aware that it risks undermining the rule of law by meddling in private matters.
A balanced U.S. budget isn’t worth fighting about 5 Jul 2011 Congress will have to soon agree on increasing government borrowing authority. Bickering over a Republican idea to stick a balanced budget amendment into the Constitution is a distraction. The rule is unlikely ever to become law. And as a fiscal goal, it's needlessly austere.
Zynga brings much-needed cash crop to IPOville 5 Jul 2011 Tech firms have gone to market by the bushel with little earnings in tow. Zynga arrives with income aplenty from online games like FarmVille. Most of it was harvested from Facebook, but that risk is manageable. And Zynga's profitability is even more bountiful than first appears.
Mega-cap discount creates demerger incentive 5 Jul 2011 Shares in the largest companies are trading at chunky discounts to smaller peers on both sides of the Atlantic. The valuation gap has been around for almost a decade. The longer it persists, the more big companies will face a powerful incentive to break themselves up.
News Corp’s weak governance looks chronic 5 Jul 2011 Shocking developments in the phonehacking scandal at the media group's flagship UK tabloid underscore the inadequacy of internal probes into the affair. No heads have rolled. News's rating should reflect the fact that it doesn't know what went on, or hasn't taken this seriously.
Insurers get euro stress tests off to a duff start 5 Jul 2011 A tenth of Europe's insurance companies have flunked this year's stress test, though the regulator won't name them. The tests were based on rules that don't take force until 2013. But they also weren't tough enough. European authorities would have been better off doing nothing.
Microsoft gets message late on China market 5 Jul 2011 A tieup with rival Baidu shows that the U.S. software giant has realised it's better to partner up than go it alone. That's a start. With cash to spare, Microsoft should now consider a bolder move such as buying a stake in a local player like Sina or Shanda.
Pipeline saga shows open M&A market is working 5 Jul 2011 A higher, $5 bln offer for Southern Union has eliminated a swagbag of goodies for its top two executives in favor of a deal that treats all shareholders fairly. That wouldn't have happened without Williams' spoiler bid. Three cheers for a free market for corporate control.
Mexican vote offers neither promise nor threat 5 Jul 2011 Supposedly reformist party PAN, loser in weekend elections, has managed the economy decently but not reformed much. Now it faces high unemployment, drug conflict and a revitalized opposition. A PRI victory won't bring much economic change; faster U.S. growth would do most good.
Brunswick equity won’t stop the bold spinning off 5 Jul 2011 Financial PR is lucrative, but the wealth isn't that widely spread. Brunswick founder Alan Parker, one of the biggest beneficiaries, plans to offer his top spinners small stakes. That probably won't stop the boldest from following his earlier lead and striking out on their own.
Cutting expat fat is a necessary pain for the Gulf 4 Jul 2011 Foreign professionals are feeling the heat as the Arab spring brings urgency to UAE and Saudi efforts to raise employment among nationals. Creating a more sustainable workforce should eventually compensate for shortterm threats to productivity. But there's no painfree fix.
Nestle suggests China consumer M&A back on menu 4 Jul 2011 CocaCola's nixed bid for a juice maker left a sour taste in the mouths of firms hungry for Chinese growth. Nestle's talks with China's top sugary sweets maker may not yield a deal. But it's more evidence of Western consumer companies regaining their appetite for Chinese M&A.
Strauss-Kahn better forget about politics for now 4 Jul 2011 The former IMF chief faces an uphill battle if he attempts to return to French politics, even if all charges against him are dropped by U.S. prosecutors. The electorate will remember revelations about his personal life. A sympathy vote will not carry him far enough.
Deutsche board must lock down succession row 4 Jul 2011 Division between chairman Clemens Boersig and CEO Joe Ackermann over the latter's succession is a problem in its own right. The supervisory board needs to get a grip. While Boersig bears some blame for the mess, the simple solution would be to accelerate Ackermann's replacement.
Thai opposition win is good for growth 4 Jul 2011 Election wins for the party of exiled former premier Thaksin don't guarantee Thailand the stability it needs to reassure global investors. But it is a start. If cool heads and freemarket economics prevail to the benefit of rural prosperity, Thailand's growth should improve.
S&P’s default threat could be good news for Greece 4 Jul 2011 The ratings agency says it will consider a French proposal for a Greek debt rollover as a default. The euro zone still has a few months to agree on a second bailout for Greece. But S&P's move should prompt it to embrace a more comprehensive solution.
Don’t expect Venezuelan economic boom after Chavez 4 Jul 2011 If health woes force the president to resign, his party successors will pursue his policies. And even if the opposition wins in 2012, history suggests high oil prices will continue to bloat government spending and hinder freemarket policies and the growth of nonoil businesses.
BG should sit tight on its Brazilian bounty 1 Jul 2011 The UK oil and gas company has doubled its estimate of reserves offshore of Brazil to six bln barrels of oil equivalent. It may be tempted to follow Repsol and sell a stake in the venture. But it doesn't need the cash, and the Brazil field could become more valuable still.
Pricey Nortel IP shows fear of Google’s Android 1 Jul 2011 Apple, Microsoft, RIM and others are paying an eyewatering $4.5 bln for Nortel's wireless patents, blowing Google's early $900 mln bid out of the water. It's partly an effort to hold back the search giant's phone platform, but Android looks strong enough to shrug it off.
Minnesota state shutdown is America’s writ small 1 Jul 2011 Washington should look hard at the North Star state. A budget impasse much like the one playing out in the nation's capital is forcing the government to halt everything from construction to childcare to reststops. How it plays out could soften politicians' resolve in D.C.
French Greek plan is an almighty fudge 1 Jul 2011 It's not entirely clear who the Gallic banks are trying to hoodwink with their elaborate scheme for rolling over Greek debt: rating agencies, accountants or taxpayers. But Europe would be better off with a simpler, more upfront scheme that didn't involve smoke and mirrors.
Axel Weber is the right choice for UBS 1 Jul 2011 The former Bundesbank chief will join the Swiss bank board in 2012 as chairmandesignate. The move means that Deutsche Bank will have to rethink its succession, yet again. But Weber is likely to slip easily into UBS, and a role that will suit his experience and expertise.
Strauss-Kahn case may also vindicate U.S. justice 1 Jul 2011 New York cops took heat from afar for quickly and publicly detaining the exIMF boss, fuelling a broad rush to judgment. But it sounds as if prosecutors were the ones to uncover some holes in the case against him. That suggests StraussKahn was treated without fear or favor.
Hard to see who replaces Geithner at Treasury 1 Jul 2011 The NY Fed boss was an obvious pick by Obama in 2008. But new skills may be needed now. It's less about crisis, more about fostering growth amid a difficult political atmosphere in Washington. Finding a taker for the job, which may be a short one, could be surprisingly tough.