Google’s app store grows into risky opportunity 21 Apr 2016 Alphabet’s internet-advertising cash cow disappointed in Q1, but continued rapid growth in what it dubs “other revenues” provided a bit of solace. The company’s Android applications store is becoming steadily more important to the company – not to mention antitrust regulators.
Hitting Wall Street pay won’t eradicate stupidity 21 Apr 2016 It may feel good for U.S. regulators to swat bankers where it counts most: their wallets. New rules would defer compensation to prevent excesses that contributed to the crisis. But they can only do so much to stop executives from taking dim-witted risks when times are good.
Also recall the executive formerly known as Prince 21 Apr 2016 The influence of the artist, who died at 57, extends beyond lasting hits like “Purple Rain.” His battles with the recording industry presaged an era where power drifted away from labels to the musicians. Prince experimented as much with the business as he did in the studio.
GM investors may have learned lesson too well 21 Apr 2016 A price-to-earnings ratio below six makes no sense when profit is growing, even in a cyclical industry like cars. Old GM routinely under-delivered. Recently the $50 bln carmaker has beaten forecasts. Investors’ hard-earned skepticism may be a habit that proves hard to change.
Volkswagen hurtling into guardrail, not off cliff 21 Apr 2016 The besieged German carmaker struck a crucial deal with U.S. regulators over its dirty-diesel fraud. But the full price it must pay is still unclear. Buybacks and compensation to American drivers alone can cost $11 bln, and fines come on top. Dieselgate remains a nail biter.
Obama view on UK-EU can sway minds but not hearts 21 Apr 2016 The U.S. president, visiting London, could speak in favor of Britain staying in the EU. The big-picture economic case, in particular, is hard to dispute. But just as Donald Trump’s supporters defy logic, disengaged Brits may be ready to blow a raspberry at the establishment.
M&A advisers’ optimism rings truer than big banks’ 21 Apr 2016 A dearth of closed deals hit Q1 revenue for most advisory shops. The likes of Lazard and Greenhill are justified in expecting a fairly quick recovery. BofA, Goldman and larger peers, however, need interest rates and trading volume to rise. For them, the crystal ball is cloudier.
Verizon vulnerable to T-Mobile US trolling 21 Apr 2016 The No. 1 U.S. wireless carrier is having a “midlife crisis,” its outspoken rival says, questioning the billions spent on a string of acquisitions aimed at new audiences, including AOL and perhaps Yahoo. Verizon’s so-so first quarter reflects the challenges of a saturated market.
Saudi’s sweet debt deal could rebound on banks 21 Apr 2016 The kingdom is close to its first international debt deal in 25 years to plug a hole in its finances caused by weak oil prices. Vast oil reserves make Saudi debt enticing, but the price slump is changing the game in several ways. And Middle East states have defaulted before.
Investors need help to stop cheap Chinese buyouts 21 Apr 2016 Minority shareholders are upset about a wave of stingy take-private offers from Chinese groups with U.S. listings. But they can’t do much because the firms are domiciled in offshore centres with fewer protections. Investors could find a sympathetic ear in a China-weary Congress.
Jack Lew prints his own unique legacy 20 Apr 2016 Treasury chiefs are typically remembered for their roles in crises, or not at all. Lew entered a budget wonk, but will leave as the man who put abolitionist Harriet Tubman on the $20 bill, among other currency changes. It’s a more lasting contribution than curbing M&A inversions.
Puerto Rico moral-hazard critique is wide of mark 20 Apr 2016 A bill allowing the U.S. territory to restructure $70 bln of debt has stalled, with critics arguing imprudent states might try to follow suit. Yet relief for the island would come with pain. And a process which forces a haircut on creditors could be just what the market needs.
Congress may be shamed into reviving housing reform 20 Apr 2016 Hedge funds and DC are still fighting in court about Fannie and Freddie’s $187 bln crisis bailout. Overhauling them is more important, but has stalled. A loss forcing either housing agency to tap the government well again may be the jolt lawmakers need. It may not be far off.
Google and EU fight losing battle for good reasons 20 Apr 2016 European trustbusters have accused the tech titan of abusing its dominance in smartphones by tying services together. The case is solid but a tortuous process limits deterrent value. And Google probably can justify the cost of a brawl even if it doesn’t win.
Saudi U.S. selloff threat not to be trifled with 20 Apr 2016 The kingdom has told lawmakers it would dump some $750 bln of assets should Congress pass a bill allowing 9/11 victims to sue. These funds are its last line of defense to lower oil prices. That the alternative - having assets frozen - is an even worse outcome is scarier still.
Marissa Mayer has only one last job to do at Yahoo 20 Apr 2016 Underscoring the lack of progress in her nearly four years as CEO, the web company’s quarterly revenue fell another 11 pct. Google and Facebook are cleaning up in ads, especially mobile. It’s time to offload Yahoo’s core business before bidders like Verizon lose interest.
Lexmark sale to China copies the Lenovo blueprint 20 Apr 2016 Apex Technology and partners are buying the U.S. printer-maker for $3.6 bln including debt. Unlike some of China’s splashy overseas deals, financing and regulators are not big risks, and the price seems fairly sober. Lenovo’s past forays into unloved tech niches offer a guide.
EMC deal math has snowball’s chance for Dell 19 Apr 2016 The PC maker is targeting up to $2 bln in annual savings and three times more revenue uplift from its $60 bln purchase of the data-storage company. The cost cuts alone can’t justify the price. Cross-selling is the great hope, but Dell has been too optimistic about that before.
Goldman staffers pay for wrong-footed bosses 19 Apr 2016 Average compensation, including money socked away for annual bonuses, fell by 44 pct in the first quarter. That’s a bigger cut than JPMorgan or Morgan Stanley employees suffered. A revenue slump is one reason, but Goldman also was hiring last year and is only now cutting back.
Bondholder hunt for pixie dust heads to Argentina 19 Apr 2016 Buyers hungry for yield and novelty had a feeding frenzy over the $16.5 bln of debt sold in the country’s first global offer since a 2001 default. It’s a big win for President Macri, whose reforms added to the deal’s appeal. But such giddiness may miss the challenges he faces.