Viewsroom: Spotify leads Wall Street on IPO dance 5 Apr 2018 The music-streaming service enjoyed a mostly smooth stock-market debut despite largely bypassing investment banks. Ultimately, though, business success, not IPO hype, is what counts. Plus: Regulators and automakers are sparking up an altogether too cozy relationship.
Chinese visitors can hit nerve tariffs don’t reach 5 Apr 2018 Levies on imports will slow the flow of TVs and medical devices into the United States. They could also thin the already-falling influx of tourists from China. America collects more from them than from all its exports of soybeans, and that number could pass $50 bln by 2022.
Icahn sets himself tough task at SandRidge 5 Apr 2018 The investor wants a new board at the $500 mln oil group to ensure it’s sold for top dollar. He may even bid himself. Icahn has proved stubborn at Newell, Herbalife and elsewhere. But with another big shareholder, Fir Tree, thinking differently, SandRidge could test his patience.
Disarming move gives BlackRock one more weapon 5 Apr 2018 Index funds have put the $6 trln asset manager over a barrel with holdings in gunmakers. Now BlackRock is responding with new products allowing investors to avoid producers and retailers of firearms. It's more than what the NRA might call virtue signaling - it's good business.
Smucker places a risky bet on dogs 5 Apr 2018 The Jif peanut-butter maker is moving deeper into the pet-food aisle by buying the maker of Rachael Ray pet food for $1.9 bln. Premium pet-food sales are growing fast, but the modest returns on this high-priced deal may not justify the debt. Smucker may find itself on a PB&J diet.
Mark Zuckerberg could learn from Jamie Dimon 5 Apr 2018 Crises forced both CEOs onto the public stage. Over the past decade, JPMorgan’s boss has regularly confronted issues and explained the firm’s strategy. Social networks, like banks, rely on confidence to survive and thrive. The Facebook founder would do well to recognize that.
Italy’s TIM grab gives investors two messy options 5 Apr 2018 State investor CDP may buy 5 pct of Telecom Italia. If it sides with Elliott, the activist fund could take control from top shareholder Vivendi. The French group’s oversight of TIM has been dysfunctional. But protectionism coupled with complex ownership is also unappealing.
Hadas: Monopsony money 5 Apr 2018 In theory, single-buyer markets can squeeze suppliers as much as single-seller monopolies hurt buyers. But enhanced employer power doesn’t always hurt workers, and labour monopsonies are only one of many reasons for slow U.S. pay gains. Oligopolies should be a bigger worry.
Leaving Intu at till is first step for Hammerson 5 Apr 2018 The UK shopping centre owner is waiting to see whether rival Klépierre makes a formal bid before it commits to buying smaller Intu Properties. Shareholders have already turned down their thumbs at the Intu deal. A sweeter offer from the French group would be a better outcome.
Fidessa bidding war allows Temenos a sensible exit 5 Apr 2018 The British financial technology group has two further suitors, having agreed a 1.4 bln pound offer from the Swiss bank-software supplier. That price was already high, and a sweeter offer would stretch the financial logic further. Best to let SS&C and Ion fight it out themselves.
Quest for central bank transparency has limits 5 Apr 2018 UK rate-setters are debating the merits of more openness, by for example issuing official interest rate forecasts, the Financial Times reports. More information may not mean more insight. After all, good policymakers change their minds when the economic environment does.
Private equity’s retail fix risks landlord revolt 5 Apr 2018 Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.
Stronger U.S. Treasury still looks pretty weak 4 Apr 2018 Justin Muzinich’s nomination as deputy secretary ought to add weight to the Treasury when it comes to advising on economic policy. Muzinich helped forge last year’s tax cuts. But with hardliners egging President Trump into a trade war, his influence may be a drop in the bucket.
Tyson saves water reform from the slaughterhouse 4 Apr 2018 The largest U.S. meat producer aims to improve environmental practices on 2 mln acres of suppliers’ land, weeks after Tyson’s founding family used supervoting stock to nix a shareholder resolution along similar lines. The company has much more to do, but at least it’s listening.
Cloudera darkens sky over exuberant tech IPOs 4 Apr 2018 The data-analytics firm lost some 40 pct of its market value after saying revenue will slow. Cloudera, which listed only a year ago, wasn’t expected to make a profit any time soon. But when companies are driven by rapid top-line growth, a little disappointment goes a long way.
China brings a gun to its U.S. trade gunfight 4 Apr 2018 Beijing proposed duties on $50 bln of American exports hours after the U.S. said it would tax the same value of Chinese exports. Doing so may hit China’s economy, but that’s the point. The readiness to go toe-to-toe implies Trump’s trade war will be neither good nor easy to win.
Sorrell saga points to boardroom rift at WPP 4 Apr 2018 The ad group is investigating allegations of “personal misconduct” against its 73-year-old CEO, which he denies. The leaked probe suggests some directors have misgivings following a share-price slide. The bigger problem, though, is WPP’s structurally-threatened business model.
Cox: Sinclair is more totalitarian than democratic 4 Apr 2018 Donald Trump's favorite $3 bln broadcaster is downright deplorable, at least when it comes to corporate governance. The board is stocked with ancient cronies – with no women in sight. Fold in the controversy over its Orwellian editorial policies and the stock is best avoided.
SoftBank’s less risky Swiss Re bet is still silly 4 Apr 2018 The Swiss insurer says any investment by the Japanese tech and telecom group won’t exceed 10 percent. A $3 billion stake would be substantially smaller than previously suggested. Given the dubious benefits of any tie-up, though, it’s still a questionable use for SoftBank’s cash.
Smith & Nephew’s new boss has two rehab options 4 Apr 2018 CEO Namal Nawana has to revive mediocre top-line growth and slash costs at the artificial-knee maker. A flair for turnarounds should keep activist Elliott at bay for now. And the sale of the last company he headed shows an appetite for more drastic prescriptions when necessary.
IPO flop adds urgency to Indian bank’s turmoil 4 Apr 2018 ICICI Bank’s brokerage arm plunged on its market debut. A high price and volatile markets played a role, but the $27 bln parent isn’t doing enough to resolve a conflict-of-interest scandal. An independent probe would reassure investors more than soothing words from the board.
Meituan deal sets pace in Chinese bicycle-sharing 4 Apr 2018 The food-delivering, ticket-booking, ride-sharing app is buying Mobike for $2.7 bln. Given the competitive and cash-burning realities, investors should be relieved at the sale. For rival Ofo, which just raised nearly $900 mln more from Alibaba and others, the riding gets tougher.
U.S. levies on China showcase the widget economy 4 Apr 2018 Washington wants to apply 25 pct duties to 1,300 Chinese imports. Politicians love high-tech industries, but this list is dominated by mundane products like dental tools and floor polishers. It’s a reminder of the crucial role everyday items play in economic growth.
Elliott targets right pressure points at Hyundai 4 Apr 2018 The feisty U.S. hedge fund has waded into a restructuring at the South Korean conglomerate. Elliott’s three-part, $1 bln investment seems focused on the aspects of the overhaul that are most likely to generate controversy, and where it could rally support from other investors.
SoftBank fills its Indian online shopping basket 4 Apr 2018 Masayoshi Son's sprawling group invested in Snapdeal then Flipkart. Now it's taking a $400 mln stake in Alibaba-backed Paytm Mall. That exposes it to all the major e-commerce sites up against Amazon. As with SoftBank's similar ride-hailing logic, it could lead to consolidation.
Losing WPP boss could be pricier than keeping him 3 Apr 2018 The board is investigating Martin Sorrell for potential improprieties, the WSJ reported. It’s hard to think of a CEO more enmeshed in a company’s strategy. Even if nothing comes from the probe, it should force investors to confront their unhealthy reliance on WPP’s main man.
U.S. emissions watchdog hands keys to car industry 3 Apr 2018 EPA boss Scott Pruitt plans to ditch Obama-era rules mandating much greater fuel efficiency. He says the move will enhance affordability, but that’s a foil for putting industry concerns first. As finance has shown, regulators who kowtow to those they oversee can cause a crash.
New York Fed boss starts with point to prove 3 Apr 2018 A search billed as highly inclusive ended up picking John Williams, a white, fifty-something insider, to run the key Fed district. He may have been the best candidate, but on top of managing markets and regulating Wall Street he’ll be on the spot on diversity from day one, too.
Spotify and its direct listing win popular vote 3 Apr 2018 The music service earned a stonking $29 bln valuation in its early moments as a public company. Its non-traditional float scored insiders more liquidity, while saving on fees. Was it a real success, either for the company or for its unusual method? Ask this time next year.
CBS boss kisses off Viacom against the odds 3 Apr 2018 Les Moonves is pondering a bid at less than market value for the $12 bln MTV operator and wants to run the combined show. That seems an unenthusiastic start. But the Redstone family, which controls both companies, wants a tie-up. And CBS can nowadays afford a 30 pct premium.