Activist’s Barclays punt hinges on investment bank 19 Mar 2018 Edward Bramson’s Sherborne Investors has amassed a 5.2 pct interest in the UK bank. Some of Barclays’ problems – a CEO under investigation and legal issues – are short-term. A repeat of Bramson’s recent successes will hinge on turning around Barclays’ misfiring investment bank.
Zuckerberg is making a worrying passel of enemies 19 Mar 2018 The alleged exploitation of 50 mln Facebook profiles by political consultant Cambridge Analytica compounds the $540 bln social network's woes, as it contends with other backlashes. U.S. and UK legislators want to hear from founder Mark Zuckerberg now. He may be in over his head.
Viewsroom: How long should a leader lead? 16 Mar 2018 China’s President Xi Jinping can now stay in power for life. Goldman Sachs CEO Lloyd Blankfein seems ready to retire after 12 years at the top. Yet five years may be the ideal length of service. Breakingviews columnists discuss the limitations to limitless rule.
Legal truce a Wynn-Wynn solution for casino empire 16 Mar 2018 Steve Wynn may sell his stake in the casino operator after settling a lawsuit with his ex-wife. It makes sense now that he’s been turfed out as CEO, but regulatory, legal and valuation issues could deter many buyers. That leaves the deck stacked in favor of Elaine Wynn.
Qualcomm needs an intermediator more than a buyer 16 Mar 2018 The $90 bln chipmaker’s ex-chairman Paul Jacobs’ improbable buyout idea would need lots of help. The real key to boosting Qualcomm’s value is mending its rift with Apple. While Jacobs isn’t the man for that job, deep-pocketed SoftBank founder Masayoshi Son theoretically could be.
Elliott’s Italian master plan needs state player 16 Mar 2018 The activist fund wants to oust top investor Vivendi from Telecom Italia’s board and sell its network. A stand-alone telco backbone might attract a higher valuation and be able to shoulder more debt. However, success hinges on state-backed investor CDP’s readiness to chip in.
Review: The pitfalls of managing by measurement 16 Mar 2018 Excessive dependence on quantitative indicators has long caused trouble. Yet as Jerry Muller shows in “The Tyranny of Metrics”, a fixation with targets still distorts the behaviour of teachers, doctors and executives. Though data matters, it’s no substitute for judgment.
Holding: Courts may toss investors a crypto-curve 16 Mar 2018 To hear U.S. regulators tell it, initial offerings of many crypto-currencies are actually securities, and subject to strict rules. That’s far from clear, though, judging from cases moving through the legal system. With the jury still out, Congress needs to step in.
Michael Spencer tunes up for markets swansong 16 Mar 2018 The NEX chief executive is in talks to sell the London-based electronic broker to Chicago’s CME. Despite uncertainties caused by Brexit, shareholders have done well since Spencer offloaded the voice-trading unit in 2016. If other exchanges join in, they could gain even more.
Altice investors require a stomach of steel 16 Mar 2018 Patrick Drahi’s telecom group has lost half its market value in less than five months. Spinning off the U.S. arm is sensible. But the slimmed-down parent’s 31 billion euros of net debt is almost 15 times its implied equity value. That is a recipe for wild share price swings.
Wells Fargo hands CEO perfect financial incentive 15 Mar 2018 Tim Sloan’s 36 pct comp boost may look excessive for a problem bank under Fed censure. But he’s the lowest-paid boss of a major U.S. lender, and his bonus is entirely in shares - so he’ll lose it all if he’s ousted. If his turnaround succeeds, though, he’ll deserve every penny.
Who broke Toys R Us? Toys R Us did 15 Mar 2018 The retailer is liquidating over 700 U.S. stores. The woes were mainly self-inflicted: high costs, declining sales and onerous interest payments wiped out profit. Amazon played a role. Yet basic retail and financial risks sealed Geoffrey the Giraffe’s fate, as it may for others.
H2O merger an important drop in $730 bln bucket 15 Mar 2018 That’s how much U.S. water utilities may be worth. Yet a deal creating the sector’s third-largest listed company values it at just $1.9 bln. The fragmented industry needs more tie-ups to cover rising costs and investment needs. Otherwise the country’s water quality could suffer.
Volatility now has a life of its own 15 Mar 2018 Measures of how much asset prices are expected to gyrate have risen from ultralow levels. But investment strategies that worked a decade ago may not now. Volatility can now lead, not just follow asset prices and old market relationships may break down when turmoil hits.
Elliott picks unusual allies for Italian battle 15 Mar 2018 Paul Singer’s hedge fund wants to oust Telecom Italia’s chairman and other directors backed by top shareholder Vivendi. Nominating well-connected locals improves its chances of success. Still, it’s odd to see the free market champion joining forces with the Italian establishment.
Cox: Aramco and Amazon encourage bad behavior 15 Mar 2018 Global financial capitals are prostituting themselves to accommodate the Saudi oil giant's IPO. Amazon's competition for a second HQ is provoking U.S. municipalities to similarly ingratiate themselves. This "Aramazon" effect exemplifies how races to the bottom get started.
Unilever exit is double setback for London 15 Mar 2018 The Dove soap maker has picked Rotterdam as its global base in a corporate streamlining. Scrapping its Dutch trust office will help reassure investors that the move is not a takeover defence. However, the reshuffle may also rob the FTSE 100 index of one of its larger members.
Looser Dodd-Frank rules will stick more tightly 15 Mar 2018 Exactly a decade after Bear Stearns’ rescue, U.S. senators voted to soften parts of the post-crisis bank law. Wall Street’s critics are protesting, but Dodd-Frank needs some fixes. Shedding the most controversial elements will help ensure its pillars have a longer life.
China’s lithium trouble in Chile hints at more 15 Mar 2018 A government agency wants to block Tianqi Lithium's bid for a stake in $13 bln rival SQM, arguing the market is too concentrated. China seldom gets pushback in resources M&A. Beijing can expect more potholes as it tightens its grip on ingredients for electric vehicle batteries.
SEC gives wrong Theranos lesson to Silicon Valley 14 Mar 2018 Elizabeth Holmes’ company raised $700 mln in a “massive” fraud that put patient lives at risk. Yet regulators are letting her escape with a slap on the wrist, and not admit guilt. The SEC says this is an important lesson for startups, but it shows how toothless the agency is.