M&A at last finds a way for lawsuits to pay 8 Jan 2015 Cases challenging deals are often flimsy. Merger appraisal suits that allow investors to sue for higher prices have, though, proven strong. A ruling against Ancestry.com makes the strategy even more appealing. It’s one litigation process that doesn’t just benefit the lawyers.
Biotech unicorn startups thrive in darkness 8 Jan 2015 Moderna’s the latest to be worth at least the $1 bln that earns the moniker of the mythical beast. It aims to develop 100 drugs in 10 years. That’s laudable, but the technology may not work in humans. Moderna’s valuation is another sign the biotech boom’s flirting with fantasy.
U.S. housing should thrive without Obama’s help 8 Jan 2015 The president plans to cut mortgage costs for risky borrowers. That could help on the margins but won’t change the larger picture. Home ownership among older Americans is at near-record levels, and younger buyers should gain ground soon. The government can safely step aside.
Dick’s buyout has financially sporting chance 7 Jan 2015 The $6 bln U.S. golf-to-guns vendor is mulling a sale to private equity. Low debt at Dick’s Sporting Goods means even with a chunky premium, attractive returns look possible. It would, however, require healthy growth when stiff online competition is challenging many retailers.
Sony studio damage assessment misses big picture 7 Jan 2015 Boss Kazuo Hirai’s claim that “The Interview”-linked cyberattack won’t hurt the company financially may be funnier than the movie itself. Repeated and successful breaches keep damaging Sony’s brand. It’s a vicious circle that makes more hacks likely.
Help wanted: New top U.S. number cruncher 7 Jan 2015 Republicans, who will control Congress in 2015, are seeking an experienced wonk to lead its budget office. The ideal candidate adores dynamic scoring and private competition and can endure work being scrutinized by the public. Position’s existence subject to political whims.
MAUs chase puffs up Snapchat’s value 7 Jan 2015 The disappearing-message service has 100 mln monthly active users, is growing fast and just raised $486 mln. It’s now worth more than $10 bln, thanks to the idea that large social networks are inherently precious and should reap cash from ads and apps. Those are big assumptions.
Fed pick gives Bank of Hawaii even bigger splash 6 Jan 2015 Allan Landon, Obama’s nominee for the U.S. central bank board, ran the local lender from 2004 to 2010. His BOH predecessor, Mike O’Neill, hasn’t been shy about rocking the boat at Citigroup, ousting former CEO Vikram Pandit. Maybe Landon will make some helpful waves at the Fed.
MSCI and ValueAct both need help on activism 6 Jan 2015 The data company’s rejection of 8.3 pct investor Jeff Ubben’s request for a board seat looks cack-handed. MSCI could use a shareholder-focused director. Yet Ubben’s ValueAct, with success at Microsoft under its belt, also seems tactically challenged now that the fight is public.
114th U.S. Congress can easily surpass very low bar 6 Jan 2015 The past few groups of federal lawmakers redefined dysfunction. They created debt crises and set record lows for approval and productivity. With Republicans in control, deal-making may be easier. Even incremental steps on issues like taxes and infrastructure would be progress.
Clunky conglomerates put on high breakup alert 6 Jan 2015 Billionaire Carl Icahn wants to separate Manitowoc’s construction cranes from its ice machines. Companies with such head-scratching pairings make easy targets for freshly invigorated uppity investors. Pitney Bowes and JBT are among those that may want to keep vigilant guard.
Coach tries LVMH model on for size with shoe buy 6 Jan 2015 The U.S. leather-goods purveyor is paying $574 mln for Stuart Weitzman, the first acquisition since its 1941 founding. While this looks like an admission its core brand has maxed out, Coach is betting it can use its know-how to expand other marques like LVMH and Kering have.
Guest view: Banks need to lead on cultural change 6 Jan 2015 While lenders have boosted capital, reduced leverage and added liquidity, they have not shown the same commitment to adjusting their core behaviors, including their risk cultures, argues former Citigroup executive and author William Rhodes.
Animal spirits and crisis ghosts will shape 2015 5 Jan 2015 Breakingviews’ annual compendium of financial and economic predictions for the year ahead is out. From the UK election to IBM via the global economy and geopolitics, our columnists offer insightful, entertaining, provocative and – we hope – profitable ideas for the year ahead.
Detroit’s Vegas bet signals wider industry shift 5 Jan 2015 A record 10 carmakers are at the Consumer Electronics Show as gadgetry from connectivity to self-driving shifts into high gear. Regular car shindigs like Detroit’s are bigger. But the stakes in Vegas are higher as tech giants like Google threaten to upend the automotive future.
A double-speak guide to modern markets 5 Jan 2015 As the market perpetually shifts, so do the rhetorical stylings its players use to talk their way out of problems. The past year saw above-average creativity when it came to saying one thing and meaning another. Breakingviews offers up 10 euphemisms we’d like to see disappear.
Water woes could open taps on corporate risk 5 Jan 2015 Two-thirds of the world’s biggest companies are worried about access to water. But few are well prepared for problems. That should change as ways to track and address concerns grow. And if bosses don’t take the initiative, activist investors may force them to.
Euro carries buy-the-fact upside 5 Jan 2015 The single currency keeps weakening and the dollar keeps strengthening. The market’s thinking is monetary: America tightens while others loosen, and trade or cheap oil don’t matter. But when euro QE turns from talk to reality, the euro/dollar divergence could unwind.
Crude slump will stoke European oil and gas M&A 2 Jan 2015 The sharp drop in the price of Brent might make it harder to get deals done in the short term. But if the downturn persists, financial distress will put some small players in play. Larger, more defensive mergers, designed to create value by sharing costs, are also possible.
Oil glut cracks foundation of U.S. export ban 2 Jan 2015 Cheap gasoline could make lawmakers consider loosening the 40-year-old prohibition on crude exports. Plentiful oil may also force a rethink of ethanol and natural gas policies. Help for domestic producers smarting from low prices could even bring a rare show of Washington unity.