Tech selloff lumps apples with oranges 12 Jun 2017 Shares in technology giants including Apple, Facebook and Amazon have suddenly tumbled. Given their rapid ascent this year, a correction always seemed likely. Still, such sector-wide moves obscure huge differences in different companies’ earning power and cash reserves.
Data-center realty disconnects from tech reality 12 Jun 2017 The race by Amazon, Google and other firms to dominate cloud computing has brought huge demand for server farms. A $7.6 bln merger of Digital Realty and DuPont Fabros creates one of the biggest such collections. It's a good use of overvalued stock, but still too pricey.
GE’s CEO choice pushes the boundaries 12 Jun 2017 By anointing John Flannery to succeed Jeff Immelt the industrial titan is doubling down on a strategy that transcends its U.S. roots. Flannery knows restructuring and has run GE units from India to Argentina. Geographically and structurally, the company's lines may be redrawn.
Competing Dodd-Frank visions make rollback uncertain 9 Jun 2017 The U.S. House voted to undo post-crisis financial rules. The Senate has a tamer view that rejects gutting the consumer protection agency and resolution powers, and overhauling capital standards. A deal requires compromise. That’s not a forte of bill sponsor Jeb Hensarling.
Pandora opens itself to Malone’s box of tricks 9 Jun 2017 The $2 bln music-streaming service agreed to a capital infusion from the U.S. media mogul's Sirius XM. John Malone eventually took over the satellite-radio company after a similar initial investment. Pandora rejected a full buyout, but may now be exposed to creeping control.
Trump officially becomes Indian IT business risk 9 Jun 2017 The $21 bln outsourcer Wipro named the U.S. president high up in a list of risk factors for investors. It's the first strong warning in print, and it hammers home the particular vulnerability of Wipro's industry to Western protectionism – and the shortage of options to counter it.
Review: Zippy Uber trip gets barely halfway there 9 Jun 2017 Readers of "Wild Ride" are in safe hands with Fortune's Adam Lashinsky at the wheel. The book is efficient and effective, like travel using Uber's app. Given the fast pace of events for the $68 bln firm, however, life already has sped past this literary journey's destination.
SoftBank gets robotic leg-up from Alphabet 9 Jun 2017 The Japanese group is buying U.S. robot-maker Boston Dynamics. The undisclosed price was probably not high, since Alphabet was a keen seller. Boston’s dog-like automatons are scarier than SoftBank’s cutesy android Pepper. But both help SoftBank prepare for a robot-heavy future.
Jack Ma’s data ambitions get investor green light 9 Jun 2017 Investors rewarded Alibaba with another $41 bln in market value after the e-commerce giant unveiled startlingly optimistic revenue growth forecasts. It's a powerful vindication of Ma's forays into AI and cloud technology. Expectations for Alibaba to deliver are higher than ever.
Jamie Dimon succession becomes mystery-horse race 8 Jun 2017 The JPMorgan boss is losing his leading successor candidate, COO Matt Zames. Age or inexperience may disqualify the bank’s capable division heads from being more than an interim boss. Giving CFO Marianne Lake a major business to run would signal she’s the next anointed one.
Lebenthal marks end of two eras on Wall Street 8 Jun 2017 It was 1925 when Alexandra's grandparents opened their municipal-bonds shop. Her father James and TV ads gave it renown in the 1970s. She's now exiting as CEO after a lack of scale impeded efforts to revive the firm post-crisis. Family offices, not brokerages, are the new order.
Comey callout of Trump lies hurts dealmaking hopes 8 Jun 2017 The former FBI director said the U.S. president lied on several occasions. He also illustrated Trump’s knack for self-sabotage. Markets were cheered that the testimony didn’t produce a knockout blow, but the credibility hit will further hobble the administration’s economic plans.
Nordstrom could be well suited for a buyout 8 Jun 2017 The family behind the $8 bln U.S. clothing retailer is considering taking it private. It looks workable at leverage of around four times EBITDA with insiders rolling over their stakes. The growing list of shopkeepers struggling with debt should sound a note of caution, though.
Tesla shareholders reveal deep abiding faith 8 Jun 2017 Even after excluding Elon Musk’s 22 pct stake, a proposal requiring board members to face a vote every year was rejected. Tesla says it'll add a couple independent directors. Authorizing bad governance, however, makes little sense at a company trading at 30 time 2020 earnings.
Crude price drop is symptom of rising U.S. clout 7 Jun 2017 U.S. oil fell 5 pct to under $46 a barrel after the nation's stocks unexpectedly increased. Back in the day, an attack in Iran and tension between OPEC members Saudi Arabia and Qatar might have dominated. Demand was soft, too, but America's shale is changing the balance of power.
Kansas GOP to D.C. GOP: trickle down ain’t coming 7 Jun 2017 Lawmakers scrapped the 2013 tax cuts pushed by the state's governor, who believed they would spur hiring and spending. Instead Kansas got budget deficits and failing schools. Donald Trump also hopes slashing federal taxes will boost growth. Congress may yet disagree.
Pinterest valuation logic is yet to be discovered 7 Jun 2017 A funding round at a $12.3 bln all-in worth puts "the world's catalog of ideas" on a 25 times revenue multiple, close to Snap's, and in the same market-cap ballpark as Twitter, which has double the users and nearly five times the sales. It's a DIY figure in search of support.
U.S. stocks and bonds are in economic tug-of-war 7 Jun 2017 Bullish equity investors have pushed the S&P 500 to new highs despite soft data and fading hopes for business friendly policies. With yields tumbling even as a new rate hike looms, fixed income is more attuned to a possible downturn. When the stories converge, it won't be pretty.
Facebook investors shouldn’t discount fake news 7 Jun 2017 Investors spurned a proposal that the social network report on the business risks of bogus news on its site. It’s a complacent stance on a topic Mark Zuckerberg has started taking seriously. At least opposition to multiple voting rights suggests governance isn’t a dead issue.
Hadas: Misbehaving wages keep economists baffled 7 Jun 2017 Conventional economic theory says wages start to rise when labour markets tighten. It isn’t happening in the U.S., Britain, Japan or Germany. Many semi-plausible excuses and partial explanations have not solved the mystery. That leaves central bankers in a quandary.