Rainbow-chasing unicorns get Groupon reality check 4 Nov 2015 The daily-deal company’s stock cratered on cut forecasts and a CEO change. It’s now worth about $2 bln, a third of Google’s offer price in 2010. Tech startups may favor tales of takeover refuseniks like Facebook and Twitter, but it’s easy to get lost in valuation fantasyland.
Financial tech has as much to gain as fear from D.C. 4 Nov 2015 A new lobbying group of five big Silicon Valley firms reflects concerns that Washington may not understand the benefits of booming fintech. Banks have long made similar complaints about Uncle Sam. Like them, the industry needs to realize that regulation can help rein in excess.
Trader’s conviction vindicates juror cyber smarts 4 Nov 2015 Prosecutors won the first U.S. trial for manipulating prices by placing and cancelling orders, known as spoofing. Algorithms did the actual transactions, making criminal intent tough to prove. Yet a lightning-fast verdict shows juries are up to nailing high-speed market cheats.
Time Warner leaving gate ajar for Fox return 4 Nov 2015 Boss Jeff Bewkes thwarted Rupert Murdoch’s $80 bln takeover bid with some bold stand-alone projections. A year later, the HBO owner’s results are failing to impress. Its stock trades below Fox’s offer price and at a discount to peers, making it vulnerable to a fresh approach.
Elon Musk turns Tesla rounding error into $2.5 bln 4 Nov 2015 That’s the jolt to the carmaker’s worth after its CEO said it delivered 23 more vehicles in Q3 than thought. It’s classic irrational shareholder exuberance to value a sliver of good news above an earnings miss. As Tesla expands, though, that may prove harder to do.
Investors top courts as judges of banker conflicts 3 Nov 2015 A jurist tossed claims BofA played both sides of Signet Jewelers’ bid for Zale, reversing himself after a higher tribunal said shareholder approval of a deal can override such charges. A crackdown on skewed loyalties is overdue, but owners deserve a say on when it goes too far.
U.S. election complicates Puerto Rico repair job 3 Nov 2015 President Obama wants Congress to help the island out of a $72 bln hole. His calls for debt restructuring, better oversight, tax and healthcare tweaks make sense, but risk falling prey to candidate posturing. It may take a full financial meltdown for D.C. to roll up its sleeves.
Dismal AIG earnings add fuel to Carl Icahn’s ire 3 Nov 2015 The activist wants the insurer to break up and cut costs. AIG boss Peter Hancock is pledging to do the latter. But a $231 mln Q3 loss emphasizes just how much work the company still has to do to get shareholders on board. A carve-up may be painful, but it’s not off the table yet.
Candy Crush bid relies on hope over experience 3 Nov 2015 The London-based maker of the sweet-matching mobile game is selling to Activision for $5.9 bln. It’s just a 20 pct premium, which leaves investors in last year’s IPO with a loss. With few synergies, this looks as much an excuse to use excess cash as a sound bet on future hits.
VW skids further into the emissions scandal ditch 3 Nov 2015 U.S. regulators accuse the carmaker of putting devices that fool pollution tests on even more autos, including Porsches and a wider array of Audis. If true, the claims would contradict VW’s defense, expose the company’s internal probe as hapless and drag its new CEO into the mire.
Halliburton’s Baker Hughes bid looks less refined 2 Nov 2015 The gap between the offer and market prices is a yawning 15.4 pct, implying there are serious doubts about the $27 bln oil services merger. Aussie trustbusters have raised fresh concerns. A blocked deal would cost Halliburton $3.5 bln, nearly triple this year’s expected profit.
Wall Street has its 2016 White House empty vessel 2 Nov 2015 U.S. presidential hopeful Marco Rubio’s tax-cut ideas have broad appeal, but his math is off. Hedgie and Republican Party donor Paul Singer, though, has just offered his support. That means he and other finance-industry backers may soon fill in Rubio’s hollow economic policies.
Shire pays up for easier prey than Baxalta 2 Nov 2015 The UK pharma group is offering $6 bln for rare-disease drugmaker Dyax while biding its time for an eventual swoop on Baxalta. The deal relies on bold assumptions and could take years to pay off. Shire is good at M&A, but a weak share price shows market support can’t be assumed.
Visa picks a tough time for $23 bln Europe deal 2 Nov 2015 The U.S. payments network is using an earnout, buybacks and other maneuvers to soften the blow of paying 61 times pre-tax earnings for its overseas cousin. It’s a crafty solution but the integration will take a while and distract management just as industry competition heats up.
Merger Monday has a scary Halloween afterglow 2 Nov 2015 At least six corporate buyers unmasked acquisitions of $1 bln or more to sustain the freakish pace of M&A. Some of them, including Visa’s, are tricky, while others like Shire’s treat sellers to rich prices. The zombie-like deal march is causing investors to take fright.
Ackman’s Valeant defense nervy but unpersuasive 30 Oct 2015 The hedge fund founder says the drug firm is a victim of bad PR, naive investors and jealous rivals. He even likened his stake to Warren Buffett’s savvy investment in lenders cheated by a 1960s salad-oil scandal. The reality is Valeant is flawed in ways a “pep talk” won’t fix.
Exxon pumps up position in world of cheap oil 30 Oct 2015 The $340 bln energy giant is standing firm despite $50-a-barrel crude, avoiding the kind of writedowns and job cuts that tarnished results at Shell and Chevron. An iron-clad balance sheet and strong cash flow leave Exxon primed to acquire assets as weaker producers falter.
American bank laggards band together for safety 30 Oct 2015 KeyCorp is paying $4.1 bln for First Niagara, creating the 13th-largest U.S. institution. Key is healthier than its quarry but doesn’t meet its cost of capital. The combination is expected to bring cost cuts of $400 mln and more efficiency – and may be tasty prey for big rivals.
Review: Fed founders wouldn’t recognize their baby 30 Oct 2015 In “America’s Bank,” Roger Lowenstein shows how the Federal Reserve was created to act as lender of last resort and little more. Since then, there’s been mission creep with many ill consequences. A century after its foundation, the central bank needs to address its failings.
AB InBev enters SAB mega-deal on a solid footing 30 Oct 2015 The Budweiser brewer has upped guidance on revenue. Costs are also rising because AB InBev is selling more fancy beers. Ahead of its $105 billion deal with SABMiller, the world’s largest brewer must spend on new products and markets as well as buying rivals in order to secure growth.