Record lottery threatens Silicon Valley self-worth 23 Oct 2018 A few months unclaimed has left the top U.S. prize at $1.6 bln. A successful punter or several will become at least as well off as founders of a hefty tech unicorn. Rubbing shoulders on rich lists might rankle with startup billionaires – but their wealth owes plenty to luck, too.
Verizon’s Oath is breaking its promises 23 Oct 2018 The renamed Yahoo-AOL combo saw quarterly revenue drop 7 pct despite previously projecting growth. Its $227 bln parent Verizon spent relatively little to buy the dying internet firms. But Oath’s decline shows how daft it was to try marrying the telecom’s data with advertising.
Trump’s Saudi arms deal isn’t a jobs offensive 23 Oct 2018 The U.S. president is urging Congress not to sanction Saudi Arabia by blocking arms sales, saying that could jeopardize 1 million jobs. The deal would probably boost profit margins for Lockheed and others but not do much for employment. Claims to the contrary are largely spin.
Kimberly-Clark points to end of long-tenured CEOs 22 Oct 2018 The $37 bln Kleenex maker’s chief is exiting after 16 years, much like peers at Pepsi and Campbell Soup recently. It’s a sign of accelerating executive turnover at consumer-goods and industrial companies. As successors struggle to revive growth, they can expect a shorter leash.
Guest view: Activist wolves at the window 22 Oct 2018 Investors who creep up on U.S. companies have an unfair advantage: flawed rules give them a leisurely 10 days to disclose their stake. Activists have a place, but they ought to face the same time and transparency requirements as their targets, argues Lizanne Thomas of Jones Day.
Altaba offers half a map to Naspers’ future 22 Oct 2018 The former Yahoo’s $55 bln holding in Alibaba eclipsed its other businesses, finally leaving only a planned unwind to do. Naspers’ $110 bln Tencent stake likewise far outweighs the South African group’s operations. Investors like the huge gains, but want to minimize the tax, too.
Saudi turmoil is new twist on old C-suite dilemma 20 Oct 2018 The kingdom’s admission that Jamal Khashoggi died in its Istanbul consulate damages the crown prince’s ability to execute his Vision 2030 strategy. If Saudi were a company, its chairman would replace the CEO and continue with economic reforms. That possibility remains remote.
The Exchange: Stephen Harper 19 Oct 2018 Canada’s former prime minister, in office through the financial meltdown a decade ago, is an advocate for conservative politics with a small “c.” He talked to Breakingviews about the revamped NAFTA, Donald Trump’s standoff with China and the pros and cons of the loonie.
P&G’s innovation drive could use a boost 19 Oct 2018 Healthy consumers helped the consumer-goods giant report strong sales. Even its troubled razor business has sharpened up a little. P&G is following activist Nelson Peltz’s advice and trying new things. With costs rising and pricing power weak, it can’t afford to slacken the pace.
Facebook hires one weapon for two-handed fight 19 Oct 2018 Nick Clegg, former UK deputy PM, will lead global affairs at the $450 bln social network. His anti-Brexit stance and EU background could help with tribulations in Brussels. But he’s an odd choice to deal with Washington, where scrutiny may intensify after the midterm elections.
Holding: Company babysitters get deserved spanking 18 Oct 2018 The U.S. Justice Department will cut back on hiring monitors for corporate wrongdoers. Trusted to keep Citi, Apple and others in line, these super-nannies often turn into meddlers fond of excessive oversight and fees. Policing business misconduct is too important to outsource.
Viewsroom: Saudi fiasco sets Wall Street ablaze 18 Oct 2018 Bankers and officials have ditched a huge Saudi shindig after Turkey accused the kingdom of killing a prominent journalist – but big deal fees and oil reserves make the kingdom hard to shun. Breakingviews columnists discuss the financial ramifications of the diplomatic crisis.
Bond investors add fuel for Uber’s profit bonfire 18 Oct 2018 The ride-hailing company has tapped the junk market for $2 bln, even though it generates no EBITDA from which to pay interest. Investors are betting either that Uber will turn a profit – or more likely, that its dash for growth will lure future investors who can pay them back.
Guest view: Governments need more accountants 18 Oct 2018 Many states waste their resources and hide their obligations, write Ian Ball and Dag Detter. Poor accounting is partly to blame. Measuring public assets and liabilities is a first step to better financial management. That requires more accountants - and fewer economists.
Blackstone’s $1 trln goal needs some protection 18 Oct 2018 Steve Schwarzman’s outfit hopes insurers can help double its assets by 2026. Its credit funds offer the higher yields the industry is dying for, while steady fees might boost Blackstone’s valuation. The trick is to persuade risk-averse insurers that a buyout firm is a good home.
U.S.-EU derivatives kumbaya could get canned 18 Oct 2018 The U.S. swaps regulator wants to increase global cooperation. But trade tensions, Iran sanctions and a long and painful history of overreach by the U.S. itself are reasons for Europe to say no. Even though both sides could benefit, attempts at playing nice could come to grief.
Wall Street offers no relief to European rivals 18 Oct 2018 On average, U.S. investment banks reported a 7 percent jump in equities revenue in the third quarter, while fixed income trading declined. If results from European peers follow the same trend, top-line growth will be minimal. That leaves more cost cutting to boost dreary returns.
U.S. Treasury hasn’t yet been Trumped 17 Oct 2018 China again escaped being named a currency manipulator by the U.S. agency, despite pressure from the president. Although some trade-related penalties are already happening through other means, it’s a rational decision. Steady hands at Treasury and the Fed offer investors comfort.
SEC data-fee ruling hits exchanges where it hurts 17 Oct 2018 The U.S. securities regulator’s rejection of two increases won’t hurt NYSE and Nasdaq in the short run but it does challenge their business model. The fragmentation of equity trading has made data as valuable as execution or listings. Losing pricing power is a big risk.
Finance makes Apple and Google forced friends 17 Oct 2018 Steve Jobs once wanted to destroy Google for copying the iPhone. The company he founded is now dependent on the search engine and its parent Alphabet for around 10 pct of its profit. The growth of mobile search and the market for secondhand phones will bind the two even tighter.