Washington starts hitting fintech where it hurts 2 May 2016 The FTC is probing PayPal’s fast-growing payment app Venmo. Customers and big bank bosses including Jamie Dimon and Brian Moynihan have complained about lax data protection at financial upstarts. The watchdog’s move serves as a warning not to favor speed over security.
Tribune’s foot dragging on bid is bad stewardship 2 May 2016 Gannett is asking Tribune shareholders to withhold votes for directors after going public with an $813 mln offer for the L.A. Times publisher. Trib Chair Michael Ferro looks like he’s stalling. Small wonder: He and his management team will struggle to beat Gannett’s 63 pct premium.
Exxon Mobil reaches bottom of the oil barrel 29 Apr 2016 The energy goliath suffered a 63 pct fall in quarterly profit. Rivals Chevron and Conoco were hurting, too, as crude fell below $30 in January before investment cuts helped ease excess supply and push up the price. Recovery will be slow and uneven, but the worst is probably past.
U.S. Steel’s China hacking gripe clever but risky 29 Apr 2016 The giant producer claims cyber thefts breach trade laws and has asked a federal commission to block offending firms’ imports. It’s a novel way to fight a thorny problem but one unlikely to attract imitators. The Middle Kingdom may be too lucrative a market to tempt retaliation.
TV tech deal is must-see M&A 29 Apr 2016 Rovi’s $1.1 bln purchase price for digital-recording pioneer TiVo should mostly be covered by $100 mln in expected cost savings. Stock rises are rarer for corporate buyers as mergers have become financially irrational. This one suggests there can still be another way.
Amazon lays tech credentials on virtual table 28 Apr 2016 The internet company’s 28 pct Q1 sales increase is impressive, but more still are its prodigious and growing earnings from selling digital services. Amazon’s lowly margin remains a long way from justifying its $280 bln valuation, but it is finally looking less like a retailer.
Comcast’s $3.8 bln Shrek deal needs some make-up 28 Apr 2016 The broadcaster’s NBC Universal unit is paying a 50 pct premium for DreamWorks, which has been losing money for two years. Cost cuts, recouped revenue and more movies may justify the price for Jeffrey Katzenberg’s studio. But Comcast is leaving its investors in the dark.
Will retirees get just 4 pct long-term returns? 28 Apr 2016 That’s a scenario laid out in a new McKinsey Global Institute report. The idea is that returns in recent decades – and expectations that are still above 7 pct – have been inflated by effects that are now disappearing. If so, Gen Xers will retire even poorer than they expect.
Cox: What Mark Zuckerberg could learn in Quebec 28 Apr 2016 The founders of mini-mart leviathan Couche-Tard devised a clever way to balance supporters and detractors of dual-class stock by eliminating voting rights over time. The idea would suit Facebook and many others, if only bad tendencies fueled by ego could somehow be overcome.
VW leaves worrying set of tyre tracks 28 Apr 2016 Volkswagen’s stricken core brand is selling fewer cars for more money but at a loss. That’s an odd bunch of signals, but hints at price cuts and aggressive marketing to mitigate the fallout of its emissions scandal. At least its premium brands are picking up the slack.
Descending Peak Auto could be rocky road 28 Apr 2016 After selling a record 17.5 mln vehicles in the United States last year, the prospect of a downturn looms for Detroit manufacturers. Even a modest one could hit revenue hard. Ford, GM and Fiat Chrysler are fitter than they were in 2009, but have yet to navigate the downhill.
Abbott’s $25 bln buy inspires little investor hope 28 Apr 2016 It’s buying medical-device maker St. Jude at a $6.5 bln premium. Cost cuts cover less than half that, and earnings accretion doesn’t make it a good deal. Abbott’s value tumbled over $5 bln. Shareholders may recall that the target’s namesake is the patron saint of lost causes.
AbbVie grabs unicorn by its $10 bln horn 28 Apr 2016 The U.S. pharma giant is buying Stemcentrx, an eight-year-old cancer-drug developer backed by the blue-chip Founders Fund. Valued at $5 bln last fall, it was among Silicon Valley startups tarnished by recent markdowns. The sale suggests some hyped firms can still live the fantasy.
Priceline embarrassment goes beyond CEO dalliance 28 Apr 2016 The $68 bln travel website parted ways with Darren Huston citing “activities inconsistent with the board’s expectations for executive conduct.” Resorting to a former boss as a stopgap isn’t disastrous, but it suggests the board missed a trick by not bedding down succession.
Sanofi bidding war looks expensive from the start 28 Apr 2016 The French pharma group’s $9.3 bln bid for cancer drugmaker Medivation is opportunistic and logical: the target’s shares have fallen on U.S. pricing fears, and Sanofi needs to diversify. But it’s not cheap, and other suitors lurk. Sanofi will struggle to finish the full course.
Anglo American is winning race to cut debt pile 28 Apr 2016 The $1.5 bln the miner will raise from selling its Brazilian phosphate and niobium units is better than might have been expected. A multiple of 10 times EBITDA proves the company can still get a good price even in a downturn. Anglo is slowly but steadily sharpening its focus.
BBVA finds pain in Spain and USA 28 Apr 2016 Shares in the Spanish lender dropped after it disclosed weak first-quarter profit. Currencies and lower trading income have hurt, but business in Spain is sagging and provisions grew in the U.S. It’s an inauspicious start to what was supposed to be a strong year.
China’s next top corporate tourist is HNA 28 Apr 2016 The conglomerate has added Radisson owner Carlson Hotels to its portfolio of airlines, property and electronics. It has spent more than $15 bln outside the People’s Republic in a year. As with other Chinese buyers, outsiders can only guess at the logic of HNA’s grand tour.
Zuckerberg tightens grip as Facebook cash flows 27 Apr 2016 Amid a tripling of profit and 50 pct rise in sales, the social network is creating a third class of non-voting stock. It cements control for CEO Mark Zuckerberg in the event of big M&A or staff rewards. At least the weak corporate governance also may help philanthropic deeds.
Goldman may find some dark alleys down Main Street 27 Apr 2016 The Wall Street titan is going mass market with GSBank.com to fund itself with more deposits and fewer short-term loans. It also invites scrutiny from more regulators, including the CFPB, DFS and other state enforcers. It’s not yet obvious the tradeoff is worthwhile for Goldman.