United States of America

Peltz pizza tie-up is missing one ingredient

9 October 2018

Papa John’s is an ideal target for activist Nelson Peltz, who has a big stake in Wendy’s and experience fixing struggling consumer companies. Getting founder John Schnatter on board is essential, though, and that’s a challenge even for an investor used to boardroom conflict.

The Exchange: Jeff Lacker

9 October 2018

The presidency of the Richmond Fed, whose territory included two top U.S. banks, offered a unique window on the financial crisis. Wachovia needed rescuing and BofA’s deal to buy Merrill Lynch nearly collapsed. Lacker reflects on what went down and where finance is headed.

Perrigo’s new CEO is a strategic smoke signal

9 October 2018

An ill-timed expansion left the Irish firm struggling with a tough market for generic drugs. Now it has hired a new chief who formerly ran cigarette companies, breaking a pharma-sector taboo. That’s an emphatic statement that its future lies in consumer goods.

Google inadvertently makes case for data crackdown

9 October 2018

The search giant kept secret a security hole to avoid regulators’ scrutiny, the Wall Street Journal says. The lack of transparency underlines that such disclosures should be out of managers’ hands. U.S. lawmakers eyeing a law similar to Europe’s GDPR have an extra argument.

Barnes & Noble LBO more mystery than romance

8 October 2018

Founder Leonard Riggio wants to take the struggling bookseller private. The balance sheet is in shape, and there’s room to improve efficiency, so it’s a deal that could work on paper. The trick is finding someone in five years who wants to own it.

Green bonds are fertile spot for climate activists

8 October 2018

Buyers of debt earmarked for environment-friendly uses are tougher on borrowers than, say, those lending to typical private-equity deals. And up to $60 trln of such funding is needed by 2030. That may give green creditors a stronger platform than shareholders to push for change.

GE could take a leaf from Elon Musk on CEO pay

5 October 2018

There’s little worth emulating in the recent antics of Tesla’s erratic boss. But his long-term pay plan, while outsized, is tied to several ambitious performance metrics. That’s more defensible than GE offering Larry Culp up to some $226 mln for hitting stock-price targets alone.

Facebook is late to fight second existential crisis

5 October 2018

User and government annoyance at poor security, low-quality content and excessive advertising is as big a danger to Mark Zuckerberg’s company as the 2012 growth of mobile. Facebook finally appears focused on the threat, but it won’t be as easy to solve.

Treasury yield surge is mostly about supply

5 October 2018

U.S. government debt issuance is rising while the Fed shrinks its balance sheet at a quickening pace. That’s bringing an end to an era of easy money that has lasted since the financial crisis. Along with trade tension, it’s a growing headwind for an economy at full employment.

Mattress Firm is the stuff of retail nightmares

5 October 2018

The bed store owned by South Africa’s Steinhoff is filing for bankruptcy protection, and blame spreads wider than a king-sized duvet. Overexpansion, underpricing, predatory online rivals and Chinese dumping make for a fable about how retailers can fail even in a healthy economy.

Review: Michael Ovitz’s Hollywood adventure

5 October 2018

The super-agent is out with an autobiography about life as a dealmaker and art collector, as well as a short-lived stint as the Disney CEO’s heir apparent. Like Tinseltown, it’s long on bravado and short on self-awareness. But his time at the Mouse House is a cautionary tale.

Sizing up Chinese tech political risk is perilous

5 October 2018

Shares in computer maker Lenovo plunged 22 pct Friday after a news report alleged Beijing agents inserted spy chips into other companies‘ motherboards. Peers fell too. Fear of China’s role in globally integrated I.T. supply chains is growing but the fallout is hard to price.

Shale gas industry hopefuls face rock-hard barrier

5 October 2018

Fracking is about to make its debut in the UK. The practice of extracting gas from shale rock is hailed as likely to put the country on the road to fuel self-reliance. But the industry faces many obstacles, and investors should be sceptical of the scope for gushing returns.

Highfields a warning to budding pushy shareholders

4 October 2018

The $12 bln behind-the-scenes activist is closing amid low returns that also hit rivals. Yet investors are still throwing money at the strategy. High-profile battles waged by funds from Third Point to CalSTRS grab headlines. But poor profits make steering clear a better bet.

The Exchange: Neel Kashkari

4 October 2018

Even before Lehman Brothers went belly-up, the U.S. Treasury was hatching a contingency plan. Kashkari was one of the architects of the Troubled Asset Relief Program, which plugged some $250 bln into banks. He joins Rob Cox from his current perch running the Minneapolis Fed.

U.S.-China trade war morphs into loyalty test

4 October 2018

Vice President Mike Pence wants Google to halt a search-app project in China. He also said Beijing tried to get an American company to denounce U.S. policies in exchange for a license. With tariffs already imposed on most products, warped patriotism provides a new battleground.

Cyber risks deserve top billing more often

4 October 2018

Global trade tensions have dominated recent economic news. Thursday’s revelations of possible Chinese computer-hardware meddling and Russian hacking of a world chemical-weapons body and sports-doping watchdogs give justified prominence to what may be a bigger threat to growth.

Infected supply chains challenge Big Tech defenses

4 October 2018

Apple and Amazon both denied a report they had installed servers harboring compromised chips. It speaks to a problem with global manufacturing. Ensuring the purity of goods made far from end users is difficult, especially across borders. The alternative is to make less profit.

Cox: Wooing of GE is lesson for wannabe Amazon HQs

4 October 2018

Lured by inducements and hangars for its CEO’s jets, the group quit Connecticut in 2016 for Boston. GE has since incinerated over $150 bln of value and shed businesses, leaving less for its new home. Yet it continues to inflame politics in the place it left. Bezos buyers beware.

Blackstone tries small dose of new growth drug

4 October 2018

Buying Clarus, which finances biotech and pharma trials, is outside the buyout giant’s comfort zone. It’s riskier than taking over mature businesses with steady cash flows. The deal is modest in size, though, and as drugmakers look to outsource, could be a useful petri dish.