Instagram might want to unfriend Facebook 12 Apr 2018 Mark Zuckerberg snapped up the photo-sharing site for $1 bln in 2012. The savvy purchase could now be worth more than 80 times as much, Breakingviews estimates. But Facebook’s data fiascos are becoming a liability. Setting Instagram free could maximize its value.
Texas downgrade worry is a good problem to have 12 Apr 2018 The Lone Star State’s comptroller reckons its increasingly underfunded pension obligations risk a credit markdown. Texas’ rainy-day fund helps give it more leeway than many states. Others face bigger problems because, as the U.S. economy has improved, their budgets haven’t.
Qatar/Exxon love-in makes two types of sense 12 Apr 2018 Deepening its relationship with the Texas-based oil major would tie the Arab state more closely to the U.S. after recent tensions with Saudi Arabia. It also gets Exxon investing in infrastructure. That could open up the global market, to the benefit of both parties.
BlackRock runs harder to stay in place 12 Apr 2018 Tax cuts helped the asset manager beat first-quarter estimates, but headwinds picked up too. Low-margin index products drew in most of its $57 bln in new assets, pay fueled double-digit cost growth and margins were flat. The rewards of scale may be peaking for Larry Fink’s shop.
Brazil’s anti-graft drive may hamper fiscal reform 12 Apr 2018 The jailing of the country's most popular politician, Lula, and voter disgust at corruption among the powerful will give outsiders with clean reputations a chance to shine in October elections. That's welcome, but could mean needed spending cutbacks are less likely to happen.
Apollo’s Greyhound bet looks past UK politics 12 Apr 2018 Transport operator FirstGroup has rejected an approach from the U.S. buyout giant. The offer is bold given the UK backlash against rail privatisation. But the company’s American operations, including the iconic long-haul buses, help support its 1.3 bln pound market value.
Wynn presents MGM with Vegas-like temptations 11 Apr 2018 The Bellagio owner has a rare chance to bid for its $20 bln casino rival as scandal-struck Wynn grapples with its future. The numbers are a stretch, and the vagaries of Macau make it difficult for MGM to justify a premium. Nonetheless, chances like this don’t arise often.
CBS boardroom drama could use a refreshed cast 11 Apr 2018 Controlling shareholder Shari Redstone may want a merger with Viacom even without CBS boss Les Moonves. Getting rid of him would require new thinking on the board. A revamp is overdue anyway: two-thirds of directors are over 70 and diversity is only slowly getting past M*A*S*H.
Blockchain makes online lenders taste own medicine 11 Apr 2018 The likes of Prosper and SoFi found cryptocurrency technology stealing the limelight at their annual get-together. Traditional banks were once unsure whether to take the hyped upstarts seriously. The maturing fintech players now face a similar dilemma with blockchain.
Lawmakers’ puzzlement is hazard for Facebook 11 Apr 2018 In Congress, Mark Zuckerberg mostly faced confused questioning about his company’s use of data, not a focused grilling. Rather than a let-off, that’s a risk. When the average politician is baffled by something new but suspects pernicious behavior, regulation may not be far away.
Opacity makes U.S. sanctions on Russia more potent 11 Apr 2018 Rusal aluminium will be barred from London’s Metal Exchange, and the Russian group and parent En+ will be deleted from some stock indices. In theory, non-Americans should be able to deal with both. But fear of how rules will be enforced is compounding the pain of tough sanctions.
Fintech outcasts get second life in Silicon Valley 11 Apr 2018 Former SoFi boss Mike Cagney and ex-LendingClub CEO Renaud Laplanche have new loan ventures after losing their jobs to scandals. Plenty of tech executives have bounced back from failure. But Cagney’s rapid return risks further reinforcing the tech industry’s tin ear on equality.
Hadas: Even Trump can’t make graft great again 11 Apr 2018 Resistance to corruption is evident in cases against ex-leaders of South Korea, Brazil and South Africa. Old royal privileges make no sense in modern economies. U.S. officials and the corporate elite have strayed, but rising middle classes will keep straightening out the crooked.
Cerberus Alitalia carve-up would not fly with Rome 11 Apr 2018 The private equity firm is reported to be plotting a three-headed bid for the Italian airline. It would see easyJet take short-haul routes and Air France-KLM long ones, while Cerberus puts up the cash. But a breakup plan will not pass muster with a new nationalist government.
Busting EU sport cartel lines already fat pockets 11 Apr 2018 Antitrust authorities raided groups including Fox in a TV-sports cartel probe. Usually, such moves help consumers. But if the cartel had helped hold down inflated media rights, the main beneficiaries from its end would be already loaded teams and athletes.
Fed puts price on simpler rules for big banks 10 Apr 2018 The central bank wants to use stress-test results to determine how much of a capital buffer the 30 largest U.S. lenders need. It would reward good risk management and streamline the annual exam while maintaining high reserves at the megabanks. That should spell relief all around.
Washington zeroes in on correct Facebook target 10 Apr 2018 At his first congressional hearing on data practices, Mark Zuckerberg got a grilling about the social network’s confusing terms of service. More clarity and user control would be a start. But Facebook with its ad-driven business model can’t be trusted to police itself.
Viewsroom: The biggest loser, China or the U.S.? 10 Apr 2018 A volley of words threatens a trade war between PRC leader Xi Jinping and U.S. President Donald Trump. Developing China has much at risk in fighting with the world’s largest economy. But American businesses are vulnerable too. Plus: Meituan goes all-in with local services.
Trump trade war risks European carmaker backfire 10 Apr 2018 BMW and Daimler sell a surprising number of American-made vehicles in China. Were the U.S. president’s tariff-war rhetoric to become reality, carmakers could shrink stateside production. If Trump wants to keep rather than lose jobs, he should seize Beijing’s latest olive branch.
Trillion-dollar U.S. deficits are funding headwind 10 Apr 2018 Recent tax cuts will push the annual federal budget shortfall into 13 figures and debt to nearly 100 pct of GDP by 2028, Congress’s number-crunchers reckon. The forecast, on the eve of a big auction of Treasury securities, gives investors one more reason to demand higher yields.