United States of America

Citic and CLSA will survive boss departure

20 March 2019

The Hong Kong brokerage’s CEO is quitting, shortly after its chairman left. The moves have led to whispers of a culture clash with China’s Citic Securities, which bought CLSA for $1.3 bln in 2013. Bank mergers are always a challenge. Still, it’s too early to write this one off.

Financial firms’ dealmakers feast at fees trough

19 March 2019

Banks and payments firms account for four of this year’s 10 largest M&A transactions, after the FIS-Worldpay merger. It puts their advisers on track for the busiest and most lucrative year since the financial crisis. But there’s enough froth to suggest the good times won’t last.

New Fox bears hallmarks of the old fox

19 March 2019

Rupert Murdoch’s outfit is now trading as a news and sports company. With a fresh poison pill and former House Speaker Paul Ryan on the board, he’s entrenched himself and his political ties. A Disney stake gives him an additional media option. He’s still playing by his own rules.

Starboard’s Bristol-Myers pitch needs an activist

19 March 2019

Pushy investors should keep their arguments tight. Starboard’s beef with the drug company’s $74 bln deal for Celgene does highlight overpayment and patent risks. But its 197-page presentation is as bloated as its target, containing contradictions and micromanagement.

The Exchange: The water-crisis marathoner

19 March 2019

Investors and companies are ill prepared for the rising scarcity of this most important natural resource. With World Water Day on March 22, Thirst CEO Mina Guli lays out the issues and explains why she decided to run 100 marathons in 100 days to draw attention to the problem.

Hadas: U.S. colleges can try harder to be fair

18 March 2019

Elite American higher education is supposed to be a meritocracy, but last week’s admissions cheating revelations are a reminder of how much money matters. That could be changed, starting with choosing from qualified candidates by lottery and spinning off college sports teams.

Recruitment is weak link in U.S.-China tech war

18 March 2019

Trump officials are building IP theft cases and mulling AI export bans. But the government can’t stop Chinese firms from opening offices stateside and hiring from rivals: Tesla wannabe Nio has 600 workers in San Jose. Talent is fair game and U.S. firms must fend for themselves.

German bank champion will be made on Wall Street

18 March 2019

Commerzbank counts Goldman Sachs as an adviser. Paul Achleitner, chairman of partner Deutsche Bank, worked at the U.S. firm, as did Germany’s deputy finance minister. Cerberus President Matt Zames, formerly of JPMorgan, is advising Deutsche. The deal owes much to American nous.

Lyft leaves investors with options – and questions

18 March 2019

The ride-hailing firm’s newly disclosed IPO valuation target tops out at $23 bln. That’s compatible with a $100 bln-plus price tag for Uber. Yet both are a big stretch with no profit in sight. Lyft has flaws all its own, too, led by governance. If it’s a choice, it’s not easy.

Airbus can only nibble at Boeing’s 737 lunch

18 March 2019

Logically, the U.S. aerospace giant’s problems with the ill-fated MAX 8 should benefit its arch European rival. But chock-full order books and production mean Airbus will struggle to take up the slack. If the MAX 8 faces long-term problems, it could just mean fewer planes.

Payments hype reaches new peak with $43 bln deal

18 March 2019

U.S. fintech group FIS is buying processor Worldpay for 20 times forward EBITDA. While there’s logic to rolling up companies with fixed costs and sticky clients, the price is punchy even for the fast-growing payments sector. The buyer’s own numbers imply disappointing returns.

Environmental activism needs to up its game

15 March 2019

Pushy investors are getting what they want more often. But the profit motive and U.S. law give those with short-term financial agendas an edge – and hard-nosed financial raiders too easy a ride. Stressing how their goals benefit shareholders would lend ESG activists more muscle.

Newell needs a breakup more than a CEO

15 March 2019

Boss Michael Polk is retiring after an eight-year orgy of wheeling and dealing. His 2016 Jarden purchase incinerated $10 bln of shareholder value and saddled the group with debt. He has stepped up asset sales under pressure from Carl Icahn, but a full breakup would make more sense.

Facebook departure is a wake-up call for investors

15 March 2019

Top product boss Chris Cox is leaving after Mark Zuckerberg outlined a new direction. It’s hard to overstate how instrumental Cox has been in the development of the $470 bln Facebook. It's one more sign the business could change dramatically - with consequences for valuation.

Self-driving trucks expose Chinese tech gap

15 March 2019

Mainland autonomous truck startup TuSimple is hitting the U.S. road, challenging the likes of Waymo and Volvo. Despite support from Beijing, policy contradictions have reduced China’s attractiveness to its own companies, making it a laggard in the self-driving race.

Viewsroom: Boeing’s struggles

14 March 2019

The U.S. aircraft maker is facing a crisis after a second crash involving an updated version of its workhorse 737 jet. There’s a financial hit to Boeing from countries grounding the plane; but there are geopolitical implications, too. Plus: China tries to stimulate its economy.

Facebook’s presidential foes are also customers

14 March 2019

Silicon Valley has become a political punching bag for Elizabeth Warren and other 2020 contenders. But their campaigns are big users of Facebook and other online platforms. It reflects the power of tech giants, and suggests that bashing them may not persuade voters.

Lyft makes flattering “contribution” to accounting

14 March 2019

The term commonly means revenue less variable costs. The ride-hailing firm’s take on it excludes even some of those outlays and suggests healthy profit in the future. Like WeWork’s “community-adjusted EBITDA” prospective IPO investors should probably ignore the metric altogether.

Elon Musk’s balancing act requires capital support

14 March 2019

Tesla’s latest SUV extends its line but threatens to dent Model 3 sales and whack earnings. It’s a fresh complication for a CEO fighting with the SEC and flip-flopping over store closures. A cash injection, say by selling a stake in its self-driving unit, could smooth the ride.

Larry Culp struggles to get new GE off the ground

14 March 2019

The $90 bln company’s CEO is warning investors to brace for a dismal first quarter and cash flow turning negative this year. His plan to sell more assets and overhaul the troubled power unit could eventually help, but it’s slow going. And a number of risks are out of his control.