Fitbit tracks fast path to value destruction 2 Nov 2016 The wearable-device maker is proving just how hard hardware can be. Turning a fad into a lasting business is even tougher. A weak holiday sales outlook sent investors running. Fitbit is a worthwhile case study to keep nearby the next time a hot gadget IPO comes to market.
Facebook may become victim of its own success 2 Nov 2016 The $360 bln social-media company posted another sterling set of results. A 60 pct increase in ad sales, however, might make brands start to worry about its growing dominance. Sloppy missteps on privacy and partisanship won't help either. Newer outlets like Snap could benefit.
Newspaper business model imposed by market 2 Nov 2016 New York Times quarterly print revenue declined a fifth and the Wall Street Journal is radically redesigning to cope with tough conditions. A long-running debate by publishers over the merits of advertising versus subscriptions seems quaint. The choice has been made for them.
AT&T gets a sneak preview of Time Warner fight 2 Nov 2016 U.S. trustbusters sued the telecom titan and its DirecTV unit for sharing information with rivals over baseball TV rights. The case reflects worries about gatekeepers gaining power over programming. As it seeks approval to buy Time Warner, AT&T can expect to hear the question often.
U.S. Election Day is the new Friday-night dump 2 Nov 2016 Controversial companies such as Valeant, Viacom, SeaWorld and Mylan are releasing earnings on Nov. 8 - the day of the presidential poll - or Nov. 9. Good or bad news may sink with minimal media or investor attention as American eyes focus on the next occupant of the White House.
Aging tech provides fertile M&A hunting grounds 2 Nov 2016 Broadcom's $5.5 bln deal for Brocade is the latest transaction to mix equal parts strategic logic and financially appealing cost savings. Stagnating sales, cheap money and maturing technology give acquisitive firms like Broadcom plenty of targets to choose from.
Carmakers get stuck in irrational R&D pile-up 2 Nov 2016 VW spends more on research than Apple, showing carmakers are among the most generous companies with their R&D budgets. Making cars cleaner, safer and autonomous is a must, but too many engineers are reinventing the same wheel. They would do better to team up.
Time Warner’s sale to AT&T obscures future hurdles 2 Nov 2016 The HBO operator handily beat quarterly expectations as it prepares for its $85 bln sale to the telephone company. Still, small signs serve as a warning for the buyer. Chief among these is the long-term sustainability of cable fees from its powerful Turner networks division.
Cox: First Boston-Bankers Trust may unite in 2017 1 Nov 2016 Credit Suisse and Deutsche Bank bought the Wall Street firms decades ago but are still subscale in the United States. The two could limp along, never meeting their cost of capital. Joining forces, and spinning off the combination, is an alternative with many virtues to consider.
Goldman has lucky escape from tech wreck 2 Nov 2016 Tech valuations present pitfalls for banks. Goldman Sachs valued Powa Technologies at up to $18 bln a few months before the UK payments app firm entered administration. Though Goldman was never hired, the disclosure is embarrassing - its recommendations carry significant weight.
Valeant sale epitomizes new CEO’s dilemma 1 Nov 2016 Selling the Salix unit for $10 bln would be Joseph Papa's first big move since taking the reins. It would help pay down the drug giant's whopping debt. But it would also reduce desperately needed future cash flows. Papa needs to prove he can do more than preside over a fire sale.
Chipotle’s latest activists may bring secret sauce 1 Nov 2016 Investors want the ailing burrito chain to split the chairman and CEO roles and appoint an independent to run the board. Freebies and a new burger chain failed to shake off the taint of its food-safety scandal. Overhauling Chipotle's governance may provide the right ingredient.
M&A boutique endures deal vicissitudes firsthand 1 Nov 2016 Morgan Stanley alum Paul Taubman has coped with a scandal and a bigger drop in volume than rivals since the advice shop he merged with Blackstone's floated a year ago. Hiring more bankers may help. But PJT's travails are a reminder that deal-related returns are hard to deliver.
Obamacare could use a transplant, not euthanasia 1 Nov 2016 Donald Trump and fellow Republicans are using rising premiums and departing insurers to renew calls to bury the U.S. president's signature healthcare program. But they lack a viable alternative, meaning millions would lose coverage. Bipartisan surgery is a smarter option.
Gannett deal flop helps case for new mogul era 1 Nov 2016 The USA Today publisher dropped its bid for Tronc, a merger that would have brought cost savings. A relentless downturn is forcing painful cuts in many newsrooms. Business-model experiments work best away from public markets. More sole proprietors like Jeff Bezos are welcome.
Bridgewater DNA stains FBI election surprise 1 Nov 2016 Director James Comey is under fire for disclosing a renewed probe into Hillary Clinton's emails days before the U.S. vote. He learned about "radical transparency" at Ray Dalio's $150 bln hedge-fund firm. The dogma of openness has its limits in both companies and government.
The Exchange: Economic Dream Team Machine 31 Oct 2016 With the U.S. presidential election entering its final days, the jockeying for prime economic policy roles has begun in earnest. Who will run the Department of Treasury? Who will be the next Commerce Secretary? Politico's Ben White and Breakingviews' Gina Chon weigh in.
Trump backers can’t have their cake and eat it too 31 Oct 2016 Peter Thiel, the VC and PayPal co-founder, is surprised by the backlash against his support for the real-estate mogul. Fund manager Anthony Scaramucci is also feeling some pressure. The candidate's business has suffered from his politics. His allies should expect some pain too.
Baker Hughes investors overly pessimistic about GE 31 Oct 2016 Shares of the oilfield-services firm tumbled after announcing a merger with GE's oil and gas unit. Shareholders get a $7.4 bln special dividend and a big stake in an industry leader. But having been burned before, Baker's owners have their reasons for discounting GE's promises.
Blackstone sews up $6.1 bln M&A crash victim 31 Oct 2016 The private-equity firm is rescuing TeamHealth after the hospital-staffing company came a cropper by choosing to buy at the top rather than sell at a hefty premium. Blackstone, which owned TeamHealth before, can patch it up and sell it again, benefiting from the hubris M&A brings.