EQT drills too deeply to sell its Rice deal 4 Aug 2017 The U.S. natural gas producer has projected implausible new possible synergies for its $6.7 bln deal. EQT also is brushing aside an admitted conglomerate discount. It's dubious logic considering how insiders could reap healthy payouts simply for making the company bigger.
Passive investing won’t really devour capitalism 4 Aug 2017 Paul Singer is the latest financier to warn about the danger of index funds and ETFs, calling their apparent stability "unsustainable and brittle," and a threat to free markets. Too much passivity might be a problem one day. But oversized hedge-fund fees are an immediate one.
Women-friendly job plans offer few easy wins 4 Aug 2017 U.S. unemployment hit a 16-year low of 4.3 pct in July, but women still aren’t working as actively as in, say, 2000. Childcare tax breaks as proposed by Ivanka Trump can have unintended results. Lessons from Japan, Chile and other countries may help Washington avoid missteps.
White House dangles a $100 bln tech loyalty test 4 Aug 2017 Silicon Valley chiefs clash with President Trump on much including climate change, but most are sticking around to advise him. Some may have a practical reason: the big plan to upgrade government IT. Amazon and others will be challenging dominant contractors such as IBM and HPE.
Toyota tunes up with Mazda deal 4 Aug 2017 The Japanese giant and its peer are taking small stakes in each other, and will build a $1.6 bln U.S. plant together. Toyota is racing to keep up with shifts in technology and consumer tastes. Drawing closer to Mazda and other Japanese automakers helps.
Hollywood agents exhibit empire-building talent 3 Aug 2017 WME-IMG, backed by Silver Lake and SoftBank, landed a fresh $1 bln from Canada and Singapore. It'll help fund deals like the mixed martial-arts investment last year. Given rapid growth beyond just representing Gigi Hadid, The Rock and the like, the firm's valuation looks modest.
U.S. water industry trickles toward Wall Street 3 Aug 2017 On the surface, America’s H2O suppliers have much in common with banks. They’re stymied by rates, regulation and too many players, and badly need systems upgrades. That’s encouraging some dealmaking. But with $800 bln in investment needed, the industry needs to pick up the pace.
Viewsroom: Venezuela’s downward spiral 3 Aug 2017 Questionable elections for a rubber-stamping new assembly may give President Nicolas Maduro more power. But the country’s people, economy - and some U.S. companies - will suffer. Also: Sprint, under a ton of debt yet overvalued, weighs up its M&A options.
Permian tech-like valuations come down to Earth 3 Aug 2017 Parsley Energy is the latest Texas driller to report sharply higher oil output yet see its stock fall. Companies’ growing efficiency drives global oil prices and has won multiples far higher than Google’s and Facebook’s. But in a commodity business, investors want profits too.
Avon makes for a beautiful M&A case study 3 Aug 2017 Let's dedicate a plaque in the Blockheaded Business Decisions Hall of Fame to the door-to-door cosmetics seller. Five years ago, Avon's board rejected a $10.7 bln offer from Coty and recruited Sheri McCoy to be CEO. She now departs after presiding over a near-90 pct wipeout.
Brazil’s Congress discounts cost of corruption 3 Aug 2017 Lawmakers voted to shield President Michel Temer from criminal trial, at least for now. The calculus set immediate economic interests, which should benefit from the decision, against the longer-term merits of tackling political graft. Call it the net present value of shame.
U.S.-China spat casts doubt on MoneyGram payoff 3 Aug 2017 Shares in the U.S. payments firm trade 12 pct below an offer from Jack Ma’s Ant Financial. Markets are now pricing in a sizeable risk that the Trump administration will stymie the $1.2 bln deal. That would send a nasty message to Beijing, at the expense of MoneyGram investors.
U.S. tax-cut hopes may give pensions a rare boost 2 Aug 2017 International Paper is borrowing to stoke its retirement fund. Rising plan costs and a desire to lock in tax benefits before any reduction in rates prompted the move. With other firms likely to follow, this is one way Trump’s fiscal policies can trickle down to the little guy.
Silicon Valley tries to out-Trump Trump on jobs 2 Aug 2017 Amazon is adding 50,000 to its ranks. Google is donating $50 mln to training. Touting such plans is a response to fears that tech will, like trade, be blamed for killing jobs as automation and AI take hold. Aping the president’s braggadocio to reduce any sting is a smart move.
Infrastructure-services merger owes Trump little 2 Aug 2017 Shares of engineer Jacobs popped when the U.S. president was elected in November. They’ve since faded along with hopes of heavy government spending. The company’s $3 bln combination with water expert CH2M may have some domestic benefits, but Jacobs’ bet looks more global.
New Mondelez CEO’s honeymoon may be short 2 Aug 2017 The $66 bln snack purveyor named Irene Rosenfeld’s replacement, reaching outside its ranks for frozen-food executive Dirk Van de Put. It’s an orderly succession others would do well to emulate, but the new boss may still walk into an M&A fight.
Hadas: Time for tobacco to kick the profit habit 2 Aug 2017 Despite ever-tighter restrictions, cigarette makers still have massive cash flows. A shrinking industry which conflicts with the common good doesn’t need the money. The firms should give up on shareholder value and be redesigned for orderly decline. Governments can help.
Sprint: Choose from the following M&A options 1 Aug 2017 For a merger with Charter, dial one. For T-Mobile US, dial two. For SoftBank buying the rest of the company, dial three. The $35 bln U.S. cell carrier’s stock jumped 11 pct after its CEO hinted at a coming deal. But Sprint is too expensive and indebted to ring up a big premium.
Apple profit, rumors and hype climb together 1 Aug 2017 Ten years after the first iPhone, hype over the $780 bln tech giant’s next model is rising on whispers from suppliers and developers. CEO Tim Cook racked up $8.7 bln more profit in the past quarter. Absent other blockbuster devices, though, it’s the next reveal that matters more.
Right now, Tesla is more than ever a carmaker 1 Aug 2017 A name change, buying SolarCity and a bet in Australia are all part of CEO Elon Musk rebranding his $50 bln creation as an energy company. But SolarCity bosses have left and virtually all income is from autos. Tesla’s future rests on making the new Model 3 a mass-market success.