Box ties a neat bow on Silicon Valley IPOs 25 Mar 2014 The cloud storage company plans to go public with a net loss greater than its revenue. Box is growing fast, doesn’t expect to be profitable any time soon, will have two classes of shares, a CEO who is under 30 and some mysterious metrics. It’s the internet era in one package.
GrubHub IPO includes needless flavor enhancers 24 Mar 2014 Investors are surely working up an appetite for the $1.7 bln U.S. online takeout service, as well as for its European peer Just Eat. Mobile device use should feed healthy expansion. But GrubHub’s prospectus flatters its growth. There’s the latest in not-so-tasty new metrics, too.
Exxon finally warms to climate change disclosure 24 Mar 2014 Investors fear that a crackdown on carbon emissions could make much of the energy giant’s crude reserves all but worthless. The company has agreed to reveal its assessment of that risk. The move could put Exxon ahead of rivals in weathering - and accounting for - global warming.
Piketty cult is a danger for his cause 24 Mar 2014 A gloomy new book on capitalism ends with a call for higher taxes on the rich. Sympathy for Thomas Piketty’s reasonable conclusion is feeding outsized praise for a half-baked economic analysis. Ultimately his confused arguments may weaken the case for pay restraint.
Elusive U.S. manufacturing boom is just delayed 24 Mar 2014 Job growth in the sector of just 5 pct since 2010 hardly counts as a renaissance, even though U.S. firms pay only half as much for energy as European and Asian rivals. But the advantage looks set to continue for years. That leaves time for industrial activity and jobs to return.
Pricey Nets LBO gives banks big payment to process 24 Mar 2014 Advent and Bain are buying Nets, a card-payments firm, from nearly 200 Nordic lenders for $3.2 bln with a dividend. The rich 12.8 times EBITDA multiple reflects private equity’s hunger for “carve-outs.” But applying sector knowhow and commercial nous could lead to decent returns.
Banks’ answer to AIG question a qualified success 21 Mar 2014 How much big U.S. lenders would lose if their largest counterparty fails is now part of the Fed’s stress tests. Bear Stearns, Lehman and AIG all showed the importance of knowing this. But the usefulness is limited unless there’s also a broader picture of systemic frailties.
JPMorgan rated most vulnerable to activist advance 21 Mar 2014 That, anyway, is the upshot of a straw poll of 254 fund managers plied with liquor and Lucite. Among other predictions at the Lipper Awards, investors gauged the Wall Street bank as more likely than GE, Exxon, IBM and Berkshire Hathaway to draw an uppity shareholder’s attention.
New top U.S. M&A judge brings calm after Strine 21 Mar 2014 Andre Bouchard, the nominee to lead Delaware’s Chancery Court, may be less a force of nature than predecessor Leo Strine. But his smarts, experience and balanced approach should strengthen America’s pre-eminent business bench. In the legal world, boring often beats bombast.
Can regulating prostitution like a business work? 21 Mar 2014 A study sought by the Justice Department analyzed the $50 bln trade through the prism of eight U.S. cities. What emerges is an industry populated by mostly willing buyers and sellers, albeit with disgraceful management. While immoral, sex-for-hire might be less damaging if legal.
Review: A world of reasons for the dollar to crash 21 Mar 2014 In “The Death of Money” James Rickards sees a multitude of ways for the world monetary system to collapse. The greenback has dangerous adversaries in China and al Qaeda. But he lets the Fed and budget deficits off lightly. And some of his solutions would cause yet more havoc.
Obama’s new sanctions aim to expose crony Putinism 21 Mar 2014 The punitive steps against Russia are ostensibly just an escalated response to the Crimea annexation. But they allege a link between the Kremlin boss and Swiss oil trader Gunvor. Washington seems determined to reveal how Putin and his comrades amassed fortunes at public expense.
Google co-founder’s will may go Elon Musk’s way 20 Mar 2014 Larry Page is considering leaving his money to the Tesla and SpaceX boss. Musk doesn’t need the cash, of course, but his companies pursue green power, space colonization and other projects that Page cares about. It’s a reminder that doing well can be one path to doing good.
First Solar’s technology may help it eclipse China 20 Mar 2014 Advances in making energy cells more efficient could give the U.S. panel manufacturer a price edge over Middle Kingdom rivals like Trina and Yingli. The Chinese still lead the market with products made from low-cost materials. But First Solar may soon get its time in the sun.
Company religion case may shake shareholder faith 20 Mar 2014 U.S. boards have a legal duty to put business interests first. Yet a Supreme Court challenge to Obamacare mandates could give biblical doctrine priority. A decision will turn on corporate religious rights, but laws designed to protect investors could suffer collateral damage.
Ukraine defence more crucial than Crimean sanction 20 Mar 2014 Western leaders are still debating their response after Russia moved to annex the Black Sea territory. Their focus should instead be on preventing Vladimir Putin destabilising Ukraine. That requires tougher sanctions than previously discussed, and preparedness for economic war.
Yellen and Carney miss chance for hard reset 20 Mar 2014 Central bankers say they’re paying more attention to the financial cycle but old economic fixations persist. The ECB hasn’t started to regulate banks and Janet Yellen’s Fed sounds as oblivious as Ben Bernanke’s. There’s progress at the Bank of England, but much more to be done.
Fed’s D.C. neighbors also need its jobs dashboard 20 Mar 2014 The U.S. central bank ditched its 6.5 pct target for headline unemployment, but Janet Yellen stressed broader indicators like U-6, which adds discouraged and part-time workers. Monetary stimulus may help at the margin, but lawmakers can use the data to guide structural changes.
Confused Fed adds to emerging market muddle 20 Mar 2014 U.S. policymakers have sent a garbled message about their intention to raise interest rates. Increased uncertainty makes global bond and currency markets more volatile. That raises the risks for developing countries already battling with slower growth and sagging investor morale.
Fed’s only useful guidance is for more stimulus 19 Mar 2014 The U.S. central bank has dropped its 6.5 pct jobless trigger for raising interest rates – a risk to its credibility. Moreover, the change in future outlook seems dictated by a bias toward long-term easy money. Janet Yellen’s Fed won’t be putting on the brakes any time soon.