WeWork offers glimpse of conflicts to come 23 Jan 2019 The shared-office upstart and potential IPO candidate rents buildings part-owned by its co-founder and CEO. Private-company trends arguably encourage such blurred lines, but public investors tend to distrust them. It’s another reason to doubt WeWork’s high-rise valuation.
Oleg Deripaska’s En+ deal is more sour than sweet 23 Jan 2019 The settlement that distanced the Russian oligarch from his power company has favourable aspects, the New York Times says. Certain provisions could even limit the financial hit from U.S. sanctions still in place against him. The overall outcome is, however, still pretty painful.
Apollo makes a $6 bln virtue of plastic accounting 23 Jan 2019 The buyout group is getting RPC on the cheap. That’s partly because investors were spooked by the packaging-maker’s alleged misleading financials, which Apollo has had a chance to scrutinise through due diligence. Call it an informational arbitrage – at public markets' expense.
White House hopefuls in denial on Wall St donors 22 Jan 2019 Some Democratic presidential contenders will shun corporate funds. But a large war chest will be handy amid a crowded field of progressives. Donald Trump has already raised more than $100 mln for his re-election bid. Big money may be unavoidable to take on the reality-TV star.
Arconic lays bare limits of activist minority rule 22 Jan 2019 Elliott had a hand in appointing most directors, the CEO and the chairman, and encouraged a sale to Apollo. The board has nixed the deal, tanking the stock. Paul Singer’s firm tried to get its way with only a smallish stake; it now owns the company’s problems, not their solution.
Ford’s real reveal adds pressure on Jim Hackett 22 Jan 2019 The CEO’s ho-hum VW alliance made the carmaker the talk of a sluggish Detroit auto show. But Ford also disclosed that trucks and vans generate 135 pct of earnings. That highlights the need for speedier fixes to other, sputtering units – or a full merger that Hackett rejects.
Brazil’s Bolsonaro clears low Davos bar 22 Jan 2019 In his first overseas appearance since taking office, the president made a brief and vague sales pitch for a “new Brazil”. Business optimism about the country is running high, and modest changes can help deliver early wins. The longer term presents a more demanding challenge.
Elliott puts eBay’s parts up for auction 22 Jan 2019 The $30 bln online merchant has a history of spinning off bits of itself. It has, though, missed opportunities in its core business. While the activist may persuade eBay to offload StubHub, for example, the big payoff could be selling the marketplace unit to a buyer like Walmart.
Busy activists navigate tricky currents 22 Jan 2019 They are rattling the cages of new targets like Pernod Ricard and Campbell Soup. But regular investors are more demanding, and private equity may muscle in, panellists told Breakingviews Predictions events this month. The test is whether active shareholders produce better returns.
Transatlantic bank bonus gap is getting wider 21 Jan 2019 American firms boosted investment banking revenue by 3 pct last year; the top line at their European rivals is set to shrink. That will strengthen Wall Street’s hand when competing for staff. Meanwhile, equity traders and M&A advisers should do better than fixed-income peers.
Cox: Davos becomes a liability in the populist era 21 Jan 2019 This year’s World Economic Forum is notable for a paucity of leaders like Trump, May and Macron. Rubbing shoulders with elites in the Alps, as they did last year, will only exacerbate domestic woes. But they’re hardly great models for governance. The shindig may be better for it.
The Exchange: Flint Mayor Karen Weaver 18 Jan 2019 Before its tainted-water scandal hit in 2014, the Michigan city was already infamous for high crime and poverty rates after a prolonged economic slump. Weaver discusses the fallout from the water crisis – and explains how the birthplace of General Motors is undergoing a revival.
Musk’s rare dose of realism could serve Tesla well 18 Jan 2019 The electric-car maker’s CEO effectively issued the firm’s first profit warning, saying it needs “luck” to turn a “tiny” profit this quarter and cutting staff. If this is the start of a more pragmatic approach by the firm after years of Musk overpromising, that’s no bad thing.
Market turmoil is last straw for asset managers 18 Jan 2019 State Street will slash its payroll by 6 percent. Both the selloff in stocks and outflows hit the company’s AUM in the fourth quarter. The investment industry is already reeling from fee pressure and turning to technology as the solution. That will mean plenty more pink slips.
KKR scrapes second-rate return out of First Data 18 Jan 2019 After a long 12-year investment in the payment processor, a sale to Fiserv sets the stage for a profitable exit. It’s a wonder the $29 bln buyout survived the financial crisis, considering the debt and multiple CEOs. Anything better than breaking even amounts to a win.
Fortnite outplays media titans in a battle royale 18 Jan 2019 The video game may have raked in as much as $2.4 bln in sales last year, more than any 2018 Hollywood blockbuster. Now Netflix says it is threatened too. Success comes from mass appeal: both young and old gamers are hooked. Streaming giants and movie outfits are right to be alarmed.
Jamie Dimon puts America and himself first 17 Jan 2019 JPMorgan’s CEO said last year he wanted the U.S. tax cuts “shared broadly.” And he followed through, boosting low-paid workers’ wages and opening branches in poorer areas while also growing the bank’s earnings. But taking a $1.5 mln pay hike himself is unnecessary and tin-eared.
Slack is the tech everybody likes but no one needs 17 Jan 2019 That’s one problem for the messaging service as it gets ready to go public. It’s popular, but not a must-have for companies. Another issue is its current $7 bln private-market valuation. Based on other high-flying software firms, it’s only worth just over half that amount.
JPMorgan bankers win Wall Street pay game 17 Jan 2019 Jamie Dimon’s firm is the only one to increase average compensation for investment bankers and traders in 2018, boosting it more than revenue rose. Jefferies still pays the most, but it’s less generous than it was. Goldman and Morgan Stanley have the mix just right.
Viewsroom: China’s slowdown is not created equal 17 Jan 2019 People in the Middle Kingdom are buying fewer iPhones and cars, but Nike and others are chugging away nicely. Meanwhile, India’s struggling rural farmers are a force too big to ignore in this year’s general election. Plus: The Detroit auto show reflects the industry’s gloom.