Japan’s Renesas speeds into autonomous M&A wreck 11 Sep 2018 The Tokyo-based chipmaker is buying U.S. peer Integrated Device Technology for $6.7 bln. A promised uplift in revenue from selling self-driving and connected-car technology sounds optimistic. Even if Renesas can achieve such synergies, the return on investment barely stacks up.
Cox: Too-big-to-fail bias just now fading away 11 Sep 2018 For the first time since the financial crisis began, America’s 5,000 smaller banks are paying less to fund their businesses than mega-banks like JPMorgan and Citi. The shift, evident in the most recent quarterly FDIC data, suggests a leveling of the playing field 10 years on.
Didi falls way behind Uber on road to IPO 11 Sep 2018 Both burn heaps of cash, but new figures reveal that the $56 bln Chinese app pockets just two cents of every rider dollar. For $72 bln Uber, the roughly equal sum after subsidies is 23 cents. Differences are getting clearer even if neither looks ready to ride onto public markets.
Chinese Tesla’s $1.3 bln IPO revs up too fast 11 Sep 2018 Electric-car maker Nio has a rich price tag to match its premium branding. Under the bonnet, though, it looks less shiny. The group combines an opaque legal structure favoured by tech giants with dependence on a local auto partner. Sales are still nascent, and rivals abound.
The Exchange: Frank on finance 10 Sep 2018 Barney Frank helped craft the post-crisis rules that put banks back on track. He talks with John Foley about how politics has made the system more fragile, why populism thrived on the right but fizzled on the left, and what it was like to be one of the few openly gay lawmakers.
Wall Street brains mostly stumped by tech dilemmas 10 Sep 2018 Giant opportunities and pay packages lured Imran Khan and other rainmakers to Silicon Valley. Their record is mixed at best at Snap, Alphabet and Twitter. Raising capital is easy, instilling discipline harder, and finding ways to beat dominant rivals nearly impossible.
Chancellor: The mother of all speculative bubbles 11 Sep 2018 Since the interest rate discounts future cash flows, the central banks’ policy of ultralow rates has had an outsized impact on investments whose income lies far out in the future, whether through tech firms or 100-year bonds, and on assets providing no income. Danger awaits.
Apple gets schooled in lose-lose trade strategy 10 Sep 2018 President Trump suggested that the iPhone maker build products in America if it wants to avoid tariffs on Chinese goods. That sends the message that hurting U.S. companies is an acceptable price to pay for insisting trade partners bend to U.S. demands. Escalation is inevitable.
Viacom has chance to pitch its own script 10 Sep 2018 The controlling Redstone family won’t be trying to reunite the media group with sister company CBS any time soon. New leadership, international expansion and an improved movie slate are aiding Viacom’s recovery. At $12 bln it’s cheap, too. It’s a tastier target than CBS.
Musk takes a couple of toes off the pedal 10 Sep 2018 The $45 bln electric-car maker's CEO has promoted an insider to run the autos unit, among other changes, after "in-depth" talks with directors. An experienced outsider would have been better. Musk remains free to overpromise and underdeliver.
CBS cancels melodrama in favor of steady series 10 Sep 2018 Boss Les Moonves is out amid new allegations of sexual assault. A truce between controlling owner Shari Redstone and the $21 bln media firm makes way for better checks and balances. CBS needs Moonves less than it needs a spell of normality – and that’s now within reach.
Private equity confronts plastic risk in RPC swoop 10 Sep 2018 The UK group that makes packaging for the likes of Nestlé is being sounded out by Apollo and Bain. Given the global war against plastic, a deal would be risky. But with RPC less exposed to throwaway items, the buyout groups can make a high enough return to make it worthwhile.
Jack Ma’s exit plan just raises more questions 10 Sep 2018 Alibaba says CEO Daniel Zhang will succeed the $420 bln group's co-founder as chairman in 2019. Planning ahead is laudable, but the sketchy blueprint, after a baffling interview, leaves worries over the top job and Ma's influence unanswered. It's one step forward, two steps back.
Jack Ma’s next moves will instruct China tech 8 Sep 2018 The charismatic co-founder of Alibaba says he plans to retire. It’s a sign of the $420 bln company’s maturity that others are ready to step up, unlike at rivals like scandal-hit JD. But he will still wield huge influence. Investors will want clarity on who really holds the reins.
Tesla risk is Musk blowing smoke, not inhaling 7 Sep 2018 Model 3 sales may be speeding up. But Tesla’s stock and bonds slumped after another lawsuit, the exit of its top accountant and HR boss, and the CEO’s pot-smoking podcast appearance. It all makes Musk’s goals less convincing, and needed capital more costly to raise.
U.S. wages rising – but not yet great again 7 Sep 2018 Job creation was strong in August and hourly earnings rose 2.9 pct year-on-year, the fastest since 2009. But that barely covers inflation. The White House says pay is understated. Polls suggest, though, that Americans don’t see improved finances, despite Republican tax-cut hype.
NXP’s time in M&A wilderness leaves it unloved 6 Sep 2018 Qualcomm’s planned purchase left the $32 bln chipmaker in stasis for nearly two years. With the deal’s failure, its shares have fallen back to trade at a 30 pct discount to peers. NXP’s stand-alone story may be partly forgotten, but it’s well placed to hand investors a windfall.
CEO pay clawback is central to CBS board plotline 6 Sep 2018 Boss Les Moonves, currently under investigation for sexual harassment, may be negotiating an exit package. The $20 billion media group’s board could take back part of his golden parachute if he’s found to be culpable. It’s one way the directors can justify their presence.
Cox: Why we remember the 2008 financial crisis 6 Sep 2018 Over the coming weeks, Breakingviews will publish numerous columns and a podcast series with politicos, regulators and bankers involved in resolving the mess 10 years ago. The reason is simple: When people forget what went awry, they risk repeating the errors of the past.
Holding: Top U.S. judges are fairer than they seem 6 Sep 2018 Supreme Court nominee Brett Kavanaugh says he’ll act like a baseball umpire, making calls based on rules. That’s a bit facile. Recent research suggests, though, that jurists are mostly objective, while differing in interpreting laws. Congress and the public may never believe it.