Companies WACC central bankers on yields 10 Oct 2017 Rate-setters have engineered ultra-low borrowing costs and the risk premium on stocks is down. In theory, that lowers the bar for business investments. In practice, corporate hurdle rates have barely budged for decades. It’s a reality check for policymakers trying to fan growth.
IKEA digital surrender raises flicker of IPO hope 10 Oct 2017 The Swedish furniture firm has grown through its warren-like stores and without needing external capital. Yet it now plans to sell through websites like Amazon to reach new customers. With competitive pressures growing, IKEA might also revisit its aversion to selling stock.
Disney chief’s priorities are out of whack 9 Oct 2017 The $155 bln media firm is wrestling with major industry changes as more consumers ditch pricey cable service. Yet Bob Iger is increasingly weighing in on political issues like gun control, sparking speculation he’ll run for office. That’s fine – but not on Disney’s time.
Holding: U.S. voters could use M&A conflicts rule 9 Oct 2017 If dodgy deals can be blessed by independent shareholders or directors, why not deem voting districts fair if neutral panels draw them? Biased lawmakers might exit the process and judges could duck political spats. It’s a boardroom fix for the latest Supreme Court elections case.
GE needs Nelson Peltz’s help – and takes it 9 Oct 2017 The $200 bln U.S. industrial giant, now with a new CEO, still seems unable to get people excited about owning its shares. A board seat for the activist investor’s top lieutenant may help. It’s a contrast with P&G, which is resisting Peltz – potentially to shareholders’ detriment.
Harvey Weinstein saga will leave filthy handprints 9 Oct 2017 Ejecting a misbehaving boss, as the U.S. film studio just did, is never simple. Corporate cultures are the offspring of their founders. While their departures can kick off a cleanup, vital skills exit with them. It's a problem enterprises like Uber and Fox are grappling with too.
Nobel Prize nudges economics to accept the obvious 9 Oct 2017 Richard Thaler won the award for showing how people don’t always behave rationally to maximise a narrow concept of well-being. His insights forced economics to confront its shaky tenets. They are less useful for building new theories of how economies and markets actually work.
Trump’s petty fight upsets art of the tax deal 9 Oct 2017 The U.S. president’s relationship with Republican lawmaker Bob Corker soured further during a Twitter argument. Yet the Tennessean’s support is critical to push tax reform in the Senate, where the GOP has a slim majority. The squabbling endangers a plan that is already under attack.
HSBC’s next challenge is how to grow responsibly 9 Oct 2017 The global bank wants insider John Flint to replace CEO Stuart Gulliver, according to the Sunday Times. If approved, he will take over a slimmed-down lender trading at 1.2 times book value. Investors now want growth – but Flint and Chairman Mark Tucker should heed past mistakes.
Server-farm growth fuels hot IPO mumbo jumbo 6 Oct 2017 Rocketing data-storage demand is creating winners – witness the 46 pct rise in Switch in its first day of trading. It also encourages silliness such as the company crediting its performance on CEO and “inventrepreneur” Rob Roy’s practice of “Switchful Thinking.”
U.S. Treasury drafts helpful Wall Street guide 6 Oct 2017 The administration’s latest proposals for reforming markets regulation overplay the drop in IPOs and fixate on a couple of needless changes. Overall, though, the report’s recommendations on everything from securitization to shaking up watchdogs make a fair degree of sense.
Cox: P&G counting on an investor electoral college 6 Oct 2017 There's no strong reason for the insular consumer-goods titan to deny Nelson Peltz a board seat. Hedge funds will back him, but as in U.S. elections only half the retail shares may vote. That leaves Vanguard, BlackRock and State Street to play Wisconsin, Ohio and Pennsylvania.
Honest Co may have missed its sell-out moment 6 Oct 2017 Jessica Alba's organic products line is facing a common startup dilemma: is it worse to fizzle or sell out? The company is raising new funds at a lower price, after a possible deal with Unilever disappeared. The magic ingredient for unicorns may be timing.
Bad jobs data tests White House braggadocio 6 Oct 2017 The U.S. economy lost 33,000 positions last month, largely due to hurricanes Harvey and Irma. It’s probably a temporary blip. But President Trump and his aides have touted monthly employment gains and other snapshot economic figures when it suits them. They own the downturns, too.
Review: Dani Rodrik gives economists a better name 6 Oct 2017 The mildly iconoclastic Harvard professor’s “Straight Talk on Trade” runs through several controversial claims, from praise of diversity in economic models to support for curbs on capital flows and unfair trade. His humility is admirable, even if his pessimism may be overdone.
German scrap metal IPO hinges on green alchemy 6 Oct 2017 Befesa, which turns waste steel dust into more expensive zinc, could be valued at up to 1.6 billion euros in a Frankfurt listing. Buyout groups offered less earlier this year. Hope that emerging economies will tighten up environmental rules may justify the rich price.
Costco will struggle to shake off Amazon discount 5 Oct 2017 The U.S. members-only retailer grew sales by 15.8 pct in its fourth quarter. Yet its shares haven't recovered since Amazon expanded into groceries. There’s room for both, but the e-commerce giant has an advantage: its shareholders are used to tiny operating margins.
Amazon’s delivery self-help may have AWS effect 5 Oct 2017 The e-commerce goliath's web needs led it to build something for itself that became a big and profitable business. Jeff Bezos is now testing a way to ship goods to save money, a venture that could threaten UPS and FedEx. Amazon's solutions are a growing problem for others.
Viewsroom: Building the car for the future 5 Oct 2017 Ford boss Jim Hackett’s plan to catch up with rival GM on electric and self-driving vehicles starts with $14 bln of cost cuts. China may be in pole position as it considers banning gasoline cars entirely. But plenty of factors could delay mass adoption of new technology.
White House economist drinks Trump’s Kool-Aid 5 Oct 2017 Tax cuts will pay for themselves through economic growth, says Council of Economic Advisers chief Kevin Hassett. He also backed the U.S. president’s protectionist policies, despite being a “full-blown free trader.” That’s one aide fewer willing to dispute voodoo economics.