United States of America

Facebook gives Match’s parent a reason to split

20 September 2019

Barry Diller’s IAC may separate its holdings in the $22 bln dating site to uncork value. It would give some agility to a company already experimenting with new ideas like video and gaming. Mark Zuckerberg moving on Match’s turf provides another good excuse to make the move.

Viewsroom: Not your mother’s oil shock

19 September 2019

Saudi Arabia is quickly repairing the damage drones inflicted on its oil industry. But the fallout has implications for everything from security to U.S. shale drillers to climate change-driven alternative energy. Plus: Why are AB InBev and ESR restarting Hong Kong listing plans?

U.S. antitrust effort cries out for a monopoly

19 September 2019

The U.S. Department of Justice and FTC admit to squabbling over turf as they target the likes of Amazon and Facebook. Both agencies also could use more money and people to take on deep-pocketed tech giants. Pooling resources and power through a merger is a natural solution.

JPMorgan shares too much space with WeWork

19 September 2019

Jamie Dimon’s outfit has helped line up $6 bln in credit for the office sublessor and lent millions to CEO Adam Neumann. Funds advised by the bank are also one of the firm’s largest investors. With WeWork’s IPO increasingly in doubt, the ties call into question JPM’s tech savvy.

DirecTV not the only thing AT&T ought to offload

19 September 2019

Boss Randall Stephenson’s $49 bln purchase of the satellite TV firm has been a flop. But hiving it off would address a symptom, not the cause. Stephenson defended DirecTV right through AT&T’s purchase of Time Warner. A thorough divestment plan would start with the CEO himself.

Airbnb may be everything WeWork isn’t

19 September 2019

Both space-sharing pioneers have been valued at more than $30 bln. Yet Airbnb’s asset-light business needs little capital while reaping obvious economies of scale and network benefits. That should help its public listing, planned for 2020, succeed where WeWork’s is failing.

Fed wrestles the unpredictable and the unintended

18 September 2019

Cutting interest rates again was the easy part. The whimsical trade policy of President Donald Trump and threats to oil supplies call for insurance. But stress in money markets is partly the U.S. central bank’s own handiwork. Chair Jay Powell is discovering the Fed’s new normal.

Vaping isn’t dead, just prematurely haggard

18 September 2019

Juul Labs started as a safer alternative to smoking, but now lawmakers are treating it as a menace. Its recent $38 bln valuation has likely gone up in flames. That doesn’t mean e-cigarettes won’t be profitable. Margins could even be higher as a niche health aid.

Hadas: The trillion-dollar lesson on fiscal policy

18 September 2019

Donald Trump’s tax cuts will lead Washington to borrow nearly $1 trln, or 4.5% of GDP, this year. The politics of deficits are controversial, but the monetary economics shouldn’t be. While large deficits can cause inflation or constrain growth, today’s shortfalls may do neither.

SoftBank’s funding tricks lack a magic tech wand

18 September 2019

Masayoshi Son’s firm lavishes startups with cash to help them dominate their field. But WeWork is struggling. Other Vision Fund-backed firms from dog-care service Wag to car-sharing app Getaround lag rivals. Deep pockets alone can’t conjure up strategy, leadership and execution.

Pig crisis gives China a shot at transparency

18 September 2019

African swine fever has driven local pork prices up by about 50% in a year. Inflation remains muted regardless, prompting some speculation that officials may be massaging the figures. Other factors make that unlikely, but it's a rare opportunity for Beijing to open up – a little.

Data turns from asset to M&A liability

17 September 2019

Minority stakes in U.S. firms with sensitive information on Americans may soon be subject to national security reviews – a sensible acknowledgement that data has value. There’s a cost though. Casting the net that wide will put a chill on inbound deals, and not just from China.

Money-market wobble is whodunnit without a villain

17 September 2019

The U.S. Fed pumped in $53 bln to calm interbank lending after rates spiked. The movements were dramatic, but the many causes look mostly mundane. Banks might use the ructions to argue they deserve a regulatory break. Such ripples, though, can be tolerated, and may have to be.

Sony’s activist defence is only semi-convincing

17 September 2019

The $75 bln Japanese entertainment conglomerate rejected a call from Dan Loeb’s Third Point to spin off its chips business. The long-term case for keeping it is fuzzy but this may not be the best time for separation. It’s harder to support Sony holding onto its finance unit.

Review: Blackstone’s unapologetic buyout baron

17 September 2019

Steve Schwarzman’s memoir is a rollicking tale of banking’s glory days, and how he built an investing colossus. It’s also a love letter to elitism from a man who talks with Donald Trump and Xi Jinping. Capitalism is under attack, but Schwarzman leaves no doubt which side he’s on.

WeWork value shrinks even further without an IPO

17 September 2019

CEO Adam Neumann postponed a float, which may have pegged his office-sharing startup’s worth at $10 bln compared with a $47 bln private price tag. Yet without an IPO, parent The We Company’s growth may stall. If so, WeWork’s true value could be half even its mooted listing price.

China keeps trade war fire away from Wall Street

17 September 2019

Goldman Sachs wants a majority stake in its local joint venture. Beijing looks open to letting U.S. banks boost their presence despite tensions. Their lack of market heft means they don’t threaten local rivals, and China needs their support in the future.

GM strike is minor fender-bender, not car crash

16 September 2019

The $52 billion carmaker’s investors are pricing in a modest one-week earnings hit from union workers downing tools. It’s not like the old days: CEO Mary Barra gave in on key points before the UAW strike even began. That should bring members back to work within a few days.

Blackstone $4.7 bln REIT deal houses market oddity

16 September 2019

Steve Schwarzman’s firm is paying an 18.5% premium to take Canadian property owner Dream Global private. The lack of daily pricing volatility helps explain why far more is invested in unlisted real estate. But REITs are liquid, have lower fees and tend to outperform.

Oil market may help shale, not vice versa

16 September 2019

Producers of U.S. oil would struggle to ride to the rescue after attacks on Saudi oil fields put a question mark over the security of future supply. Even so, sustained high prices would be a happy outcome for companies that have a habit of digging themselves into a cash hole.