United States of America

U.S. regulators ask if ZTE can hear them now

17 April 2018

The Commerce Department barred domestic companies from selling to the $20 bln Chinese telecoms equipment maker for years. It's a big blow given how much ZTE sources from the United States. Things could get worse depending on how fast political winds shift against it in Europe.

Netflix’s advantage is Facebook’s weakness

16 April 2018

The video-streaming service is outperforming its FAANG associate. Subscriptions give the business an edge – and an incentive for boss Reed Hastings to keep customers’ data close by. Cash burn is always a risk but for now Netflix is better situated than Facebook.

Trump’s Fed is more rerun than reality TV

16 April 2018

Nominating economist and Pimco adviser Richard Clarida as vice chair and regulator Michelle Bowman to the board are predictable moves. With the central bank, the U.S. president has shunned the turmoil sown elsewhere in government. For investors, that's comforting continuity.

Icahn will need to work to extend winning streak

16 April 2018

The investor is selling Tropicana, the casino he plucked out of bankruptcy, for $1.85 bln. It follows last week’s sale of Federal-Mogul to Tenneco, and Volkswagen is knocking on Navistar’s door. A bull market has given Icahn a hot hand, but it makes deploying the cash a challenge.

Qualcomm’s future stuck on slow boat to China

16 April 2018

The chipmaker’s strategy depends heavily on closing its $44 bln NXP deal. A possible trade war leaves Chinese regulators in no mood to approve the U.S. company’s purchase, though. Qualcomm does have one bright spot: its long-running spat with Apple may be coming to a head.

Volkswagen overhaul may give Carl Icahn a lift

16 April 2018

New CEO Herbert Diess is mulling an IPO for its truck unit. It’d be a smoother ride if VW boosts its minority holding in U.S. peer Navistar to a controlling stake. Icahn and two other pushy investors own 40 pct of the $3.9 bln outfit - and are likely to want a hefty premium.

BofA highlights bank shareholders’ luxury problem

16 April 2018

The U.S. mega-lender posted its best quarter in years thanks to tax cuts and rate hikes. Yet big banks' shares have flatlined of late. Although more one-off hits and tax confusion don’t help, stocks already reflect improved margins. It'll take top-line growth to bring much more.

WPP breakup could deliver 25 percent upside

16 April 2018

The UK group is a messy collection of advertising, branding, PR, data and media divisions, often with scant overlap. After the exit of long-term boss Martin Sorrell, selling a few businesses might enable Chairman Roberto Quarta to recover some value for patient shareholders.

Russia’s banks could once more be its airbag

16 April 2018

The Kremlin has already authorised short-term liquidity to metals group Rusal. If the U.S. sanctions net gets cast wider, Moscow could use its control of the big Russian banks to prop up stricken companies. After all, that’s what it did when things last got dicey in 2014.

Coffee to go offers quick fix for Whitbread

16 April 2018

Activist Elliott controls 6 pct of the UK hotel and coffee chain and reckons a listing of its Costa brand would add 3 bln pounds of value. It’s a simple-seeming solution to Whitbread’s discount rating. Separating investor worries about the two parts of the business has merit.

Sorrell’s messy exit could put WPP in play

15 April 2018

The ad giant’s CEO of 32 years left after a misconduct probe, but is still eligible for a bumper share award. Chairman Roberto Quarta can kick-start a turnaround by selling WPP’s market-research arm. A braver buyer could make a decent return by taking the $21 bln group private.

Wall Street banks’ next big problem is each other

12 April 2018

Tax cuts have already boosted lenders’ bottom lines. Now interest rates, regulatory rollback and volatility are working in their favor. That ought to spell even better results than JPMorgan just reported – unless, that is, the exuberance sparks price wars and excesses.

Trump spins trade wheel in friendlier direction

13 April 2018

The U.S. president is thinking of rejoining the TPP – an 11-member group set up in part as a bulwark against Trump's trading bugbear, China. Sharing should make that easier, while also appeasing American farmers. The question is whether Trump can compromise for long – or at all.

Review: America’s founding was all about the money

13 April 2018

“New World, Inc.” explores the role of British merchant adventurers in laying the groundwork for the colonial settlements in Virginia and Plymouth. The book is a prequel of sorts to the Pilgrim creation myth that suggests Mammon, not religious freedom, drove America's creation.

LSE finds a friend at Goldman to end CEO drama

13 April 2018

The stock exchange operator hired U.S. investment banker David Schwimmer as its new chief. He brings deep knowledge of dealmaking and financial market plumbing. Brexit uncertainty and last year’s boardroom fight do not appear to have dented the LSE’s allure for executive talent.

Instagram might want to unfriend Facebook

12 April 2018

Mark Zuckerberg snapped up the photo-sharing site for $1 bln in 2012. The savvy purchase could now be worth more than 80 times as much, Breakingviews estimates. But Facebook’s data fiascos are becoming a liability. Setting Instagram free could maximize its value.

Texas downgrade worry is a good problem to have

12 April 2018

The Lone Star State’s comptroller reckons its increasingly underfunded pension obligations risk a credit markdown. Texas’ rainy-day fund helps give it more leeway than many states. Others face bigger problems because, as the U.S. economy has improved, their budgets haven’t.

Qatar/Exxon love-in makes two types of sense

12 April 2018

Deepening its relationship with the Texas-based oil major would tie the Arab state more closely to the U.S. after recent tensions with Saudi Arabia. It also gets Exxon investing in infrastructure. That could open up the global market, to the benefit of both parties.

BlackRock runs harder to stay in place

12 April 2018

Tax cuts helped the asset manager beat first-quarter estimates, but headwinds picked up too. Low-margin index products drew in most of its $57 bln in new assets, pay fueled double-digit cost growth and margins were flat. The rewards of scale may be peaking for Larry Fink’s shop.

Apollo’s Greyhound bet looks past UK politics

12 April 2018

Transport operator FirstGroup has rejected an approach from the U.S. buyout giant. The offer is bold given the UK backlash against rail privatisation. But the company’s American operations, including the iconic long-haul buses, help support its 1.3 bln pound market value.