Zynga’s multi-level StockVille proving hard to win 9 Apr 2015 When founder Mark Pincus stepped down as CEO in 2013, the FarmVille maker’s market value jumped. It tumbled again on the news that Pincus, who controls Zynga with three classes of stock, was coming back to officially run it. The super-voting share game is a treacherous one.
Guest view: What’s holding technology M&A back? 9 Apr 2015 Though deal-making is near boom-time highs, most of it’s not about making bold bets on the future, says Andreessen Horowitz’s managing partner. Activism plays a role. But as newly public tech firms that are more resistant to external pressure mature, the dynamic will shift.
Dimon revives soapbox stance with dose of gravitas 9 Apr 2015 JPMorgan’s CEO caustically defended banking before his firm’s own woes silenced him. Dimon is more nuanced and thoughtful in his latest shareholder letter, on everything from industry complexity to divining the next crisis. It makes his arguments far more compelling.
Mylan’s $29 bln Perrigo play may keep suitor away 8 Apr 2015 The specialty drugmaker joined pharma’s deal frenzy with an unsolicited bid for its Irish-based rival. An over $3 bln rise in Mylan’s share price reflects more than possibly juicy synergies, though. It suggests the firm’s a target – and eager for a dose of takeover prevention.
Shell’s BG pounce puts major rivals on the spot 8 Apr 2015 The energy giant’s $70 bln swoop on its UK competitor may draw counterbids from Exxon or BP. The former hinted it’s open to a mega-deal, and the latter needs to get bigger and dilute exposure in Russia. BP could even be a target, though Conoco and Anadarko make easier prey.
Market curbing Google faster than EU 8 Apr 2015 After five years’ back-and-forth, European competition authorities may charge the internet search giant with abusing a monopoly. Changing advertising patterns suggest technology is moving ahead of the law in muting Google’s power – an echo of Microsoft’s case last decade.
Shell could win from bold $70 bln swoop on BG 8 Apr 2015 The oil major is offering a fat 50 pct premium for its UK rival. But the share price was depressed and the synergies are attractive. The deal could prove a smart and opportunistic way to boost growth via deepwater assets and liquid natural gas – provided Shell keeps costs down.
Shell-BG highlights rise of the micro-boutiques 8 Apr 2015 The $70 bln deal needed just three advisers: Merrill, Goldman, and minnow Robey Warshaw. Rivals like Zaoui & Co have also won major mandates. For big M&A shops, two worrying trends are intersecting: CEOs seem ready to hire fewer banks per deal and to use much smaller outfits.
Bankers may slink past patrolmen with $5.3 bln LBO 7 Apr 2015 BofA, Goldman and five other lenders are financing the year’s biggest buyout. The valuation of Informatica, at 18 times EBITDA, by Permira and a Canadian fund implies leverage beyond regulatory caps. The tech company’s cash flow and deferred revenue should make the math work – just.
Costs of split help DuPont in activist fight 7 Apr 2015 The $65 bln chemical maker says Nelson Peltz’s proposed breakup would bring dis-synergies adding up to over $10 bln in present value. The numbers are plausible. Maybe slicing up DuPont would make value-adding cuts easier to deliver – but that’s a tough case for Peltz to make.
Rob Cox: Race to bottom of global subprime begins 7 Apr 2015 A new Chinese-led financial world order is emerging to challenge the IMF and World Bank. Republican U.S. presidential hopefuls Rand Paul and Ted Cruz are in a way enabling the fledgling framework. The possible competition in the market for national aid money could be worrisome.
Comcast CFO becomes $400 mln envy of the C-suite 7 Apr 2015 With $4 bln from his employer to invest in chunky deals, Michael Angelakis may sock away a huge retirement fund. If he can generate a 17.5 pct gross return, Breakingviews pegs his share at some $40 mln a year over a decade. Finance chiefs will be firing up their spreadsheets.
FedEx bets $5 bln on Europe’s potential with TNT 7 Apr 2015 The U.S. shipper’s cash bid for its Dutch rival comes two years after Brussels killed a takeover by rival UPS. The price is 20 times the weakened target’s 2016 earnings. That sounds high. But a strong dollar, cheap debt and sizeable synergies could help deliver decent returns.
Iran deal moves oil closer to long bear market 7 Apr 2015 A framework deal to curb Iran’s nuclear program is likely to bring the country’s oil exports way up. Like Saudi Arabia, Iran gains more from market share than it loses from low prices. Higher-cost producers will take time to adjust.
Request for IBM activism likely falls on deaf ears 6 Apr 2015 Some big shareholders are begging for a Big Blue shake-up. They have reason to be dissatisfied – 11 quarters of falling revenue have sent the shares into a slump. Snag is IBM has already exhausted the typical activist playbook of tapping the balance sheet, buybacks and disposals.
U.S. economy gathering steam despite jobs lull 6 Apr 2015 Rising wages, consumer confidence and housing demand should more than offset sluggish hiring in March. Besides, cutting unemployment gets harder as the rate falls toward 5 pct. With the economy far stronger than a year ago, last month’s report suggests a pause rather than peril.
Etsy priced robustly for handcrafted profitability 2 Apr 2015 The online marketplace for homemade stuff is targeting a $1.8 bln valuation in its IPO. Etsy is certainly growing its top line fast. But for investors to profit, the Brooklyn firm will need to prove it can stitch together eBay-ish returns from selling knit caps and the like.
NY judge gives 1970s sitcom a Silicon Valley spin 2 Apr 2015 A “Three’s Company” parody didn’t breach rights to the TV hit, despite similarities. Like rulings on Google Books and Aereo’s video streaming, the verdict reflects Big Apple legal thinking that ideas are for sharing. It’s a philosophy tech firms might want more courts to follow.
McDonald’s wage hike portends shareholder diet 2 Apr 2015 S&P 500 buybacks and dividends set a new record at $900 bln in 2014. But as U.S. unemployment falls, firms like the fast food chain are beginning to invest in workers. Higher pay costs, along with higher interest rates, could thin the wads of cash companies hand investors.
Review: Choking on digital exhaust 2 Apr 2015 Government and corporate mass surveillance of citizens is an aberration on a par with child labor or environmental pollution, claims security expert Bruce Schneier in “Data and Goliath.” He offers a rousing call for resistance, and hope for change - a few decades hence.