China’s bike-share firms must switch gears in U.S. 25 Oct 2017 Mobike and Ofo, the People’s Republic’s two biggest dockless cycle-share startups, are cruising into American cities. Aggressive expansion makes sense in this winner-take-most market. But city officials and local rivals may force them to hit the brakes in unfamiliar ways.
Carlyle puts socialism at the heart of capitalism 25 Oct 2017 Like China’s ruling party, the buyout firm has pulled off a leadership reshuffle, with new roles for David Rubenstein and his co-founders. Both Carlyle and China will share duties among a collective of powerful men. But at least in the Middle Kingdom it’s clear who’s in charge.
Banks score hollow victory in class-action win 25 Oct 2017 The U.S. Senate killed a rule allowing groups of consumers to sue financial firms and card issuers. Forced arbitration clauses caused uproars in the Equifax hack and Wells Fargo fake-accounts mess. The shrinking political target on Wall Street’s back is set to grow again.
Hudson’s Bay buildings are its real luxury goods 24 Oct 2017 The C$2.2 bln department-store owner is selling Lord & Taylor's New York building for $850 mln to WeWork. It may not satisfy activist Jonathan Litt, who's waging a proxy fight for bolder steps. But with retail in retreat, the firm is conceding it needs to monetize its property.
Animal-health spinoff may be just the Rx for Lilly 24 Oct 2017 The $90 bln outfit is weighing the sale or float of its pet and livestock drug business. Lofty valuations make it tempting to raise cash when the firm’s core pharma business has pipeline stumbles. But FDA approval for its arthritis treatment is the real prescription investors seek.
Republican tax-reform hopes have yet to hit reality 24 Oct 2017 A giddy GOP looks set to pass a budget resolution to pave the way for a tax overhaul that the House aims to approve by Thanksgiving. Members haven’t solved their deficit dilemma, though, and President Trump has shot down potential revenue raisers. The hard work is just beginning.
Flat soda makers will run out of revenue refills 24 Oct 2017 Coca-Cola bought niche mineral-water company Topo Chico to boost revenue. Chicago’s recent removal of a short-lived soda tax offers relief. But rival PepsiCo reported a fall in U.S. beverage sales in the third quarter. The bright spots are drops in Big Soda’s ocean of challenges.
Whirlpool and Sears engage in war of weaklings 24 Oct 2017 The appliance maker will no longer supply the retailer with most of its brands after a price-hike request was denied. Whirlpool cited higher costs and growing competition. Sears is struggling to keep its business alive and out of bankruptcy. Neither has the upper hand.
GM in fighting shape for autonomous tech battle 24 Oct 2017 Production cuts and surging post-hurricane vehicle sales are helping the $66 bln automaker right-size its U.S. business. The big test is yet to come, though. To sustain a surging stock price, CEO Mary Barra needs to deliver on ambitious goals for self-driving and electric cars.
Beefed up sales keep McDonald’s afloat 24 Oct 2017 Flouting food trends has paid off for CEO Steve Easterbrook. Serving core customers the classics delivered same-store sales growth, in spite of Hurricanes Harvey and Irma. The broader industry, which expects a 2.2 pct decline in comparable sales, will feel the bad weather.
Fiat Chrysler looks boxed in by M&A options 24 Oct 2017 Sergio Marchionne's revamp is picking up speed. But the carmaker is still worth little more than half the 40 bln euros at which the Agnelli family might consider a sale. That figure is beyond Chinese suitor Great Wall and a stretch for global peers. Fiat may be stuck where it is.
AT&T’s debt burden will force stark choices 23 Oct 2017 Buying Time Warner will leave the telecom giant about $180 bln in hock. Cash flow from the HBO parent will help, but it needs to spend heavily on content and wireless technology. CEO Randall Stephenson may have to offload assets if he wants to maintain a big dividend.
Stitch Fix IPO fits better than Blue Apron 23 Oct 2017 The personal-clothing shopping service faces tough competition. Yet unlike the meal-delivery service whose public offering flopped in June, it has largely financed rapid growth through profit. Success depends on its shoppers and algorithms continuing to nail fickle fashion.
Cisco buys more growth, but at unclear value 23 Oct 2017 The $170 bln networking giant’s $1.9 bln deal for collaboration-software outfit BroadSoft will help offset shrinking sales. The price, a 28 pct premium, looks rational. Cisco didn’t elaborate on synergies, though. Like its 200-plus other purchases, success will be tough to track.
Arconic’s boardroom peace comes just in time 23 Oct 2017 The car and aircraft-parts maker resolved its management struggle with activist Elliott Management by tapping GE’s Charles Blankenship as CEO. A fresh earnings miss means he’ll need to hit the ground running. Troubles in a key new engine program are slowing progress on margins.
GE has become the ultimate industrial lightweight 23 Oct 2017 Earnings that even new CEO John Flannery called “horrible” put fresh pressure on a stock down over 25 pct this year. The last surviving original Dow member now has by far the lowest weighting of any share in the index. It’s an embarrassing sign of the storied firm’s troubles.
Review: The myth of Federal Reserve independence 20 Oct 2017 America’s central bank is notionally free from the executive and legislative branches. A new book by Sarah Binder and Mark Spindel argues the Fed’s actions are constrained by politics. The trouble is that politicians don’t exercise their "money power" responsibly.
Tech misjudges how far its D.C. star has fallen 20 Oct 2017 Firms like Facebook used to have it easy in Washington. Now they face intense scrutiny over the use of Russia-backed online ads in the last election. Yet they are sending lawyers to congressional hearings instead of executives. Their tone deafness could come back to haunt them.
P&G’s ho-hum quarter a gut check for management 20 Oct 2017 The $230 bln diapers-to-soap conglomerate contorted to keep Nelson Peltz off its board. Though it modestly beat quarterly earnings expectations, its underlying issues haven’t changed. Boss David Taylor is under pressure to make headway with full accountability for any stumbles.
Daimler’s reform drive lacks horsepower 20 Oct 2017 Bumper third-quarter sales do little to address the Mercedes parent’s long-term problems, which include a margin-sapping global shift to electric vehicles. Plans to split in three would lift valuations if that led to a separate listing. But progress is at walking pace.