United States of America

Peltz is triple threat of cannabis endorsements

13 March 2019

Aurora Cannabis gets three things from hiring activist Nelson Peltz as an adviser: financial credibility, consumer expertise and contacts at companies like P&G. Other investors can ride on his coattails. The catch is that VIP patrons like Peltz get terms mere mortals can’t touch.

College-bribe scandal is manna for progressives

13 March 2019

TPG’s Bill McGlashan and actor Felicity Huffman are among the big names charged in an alleged scam to get their kids into top U.S. universities. The admissions process is anyway tilted toward the rich. This case, and the entitlement on show, should put the whole system on trial.

China’s Starbucks rival pushes its luck

13 March 2019

Lu Zhengyao, Luckin Coffee’s chairman, wants a $200 mln personal loan in exchange for a role on the upcoming IPO, Reuters reports. Such hubris suggests the delivery-focused chain, which faces intensifying competition, is overheating. Investors should beware getting scalded.

Wells Fargo punching bag has no more stuffing

12 March 2019

Tim Sloan is the first big bank boss to face the wrath of a Democrat-led financial services panel. His inquisitors failed to land a blow, and focused on well-trodden issues. At this rate, financial CEOs summoned to give account have little to fear but inconvenience.

Boeing needs to think faster than its watchdog

12 March 2019

Europeans joined others in suspending flights of the 737 MAX 8 after two crashes, and two U.S. senators called on the FAA to follow suit. The company’s stock lost another 7 pct. Rather than waiting for its regulator, Boeing could get ahead of the crisis by grounding the plane.

Hadas: A bluffer’s guide to the MMT debate

6 March 2019

So-called modern monetary theory might be gaining respectability, after the radical approach was touted along with a huge “Green New Deal” by U.S. Democrats. Mainstream economists are fighting back. The debate, riddled with politics, hinges on at least five questions.

Shale drillers may be singing oil’s swan song

12 March 2019

Cash is flooding into Texas wells, attracted by quick investment returns. Yet the Permian’s short production cycles may hasten the arrival of peak oil. With sustainability investors pressing for cleaner fuels, some industry executives are already planning for a post-crude future.

Trump’s dubious defense and deficit budget is DOA

11 March 2019

The White House wish list for 2020 tots up to $4.7 trln, with a boost for the military and cuts for most everything else. It also counts on an unlikely 3 pct GDP growth rate to trim red ink over a decade. It’s a statement of position that gives Congress good grounds to ignore it.

Big Tech’s best bet is to friend U.S. regulation

11 March 2019

The push to rein in Silicon Valley giants is intensifying. Elizabeth Warren, a White House contender, wants to break up Amazon and others. Tougher rules protecting users and privacy could stave that off. Those fighting constraints rather than trying to shape them may regret it.

Boeing investors fear worst from 737 tragedy

11 March 2019

The aerospace giant’s shares lost over $25 bln in value after the second crash of its newest model in six months. That overstates the likely financial impact even if U.S. regulators copy China and ground the plane. The real threat is creating an opening for a Chinese competitor.

Nvidia chip deal big on vision and price

11 March 2019

The $94 bln graphics-chip company’s $6.9 bln acquisition of Mellanox, which makes hardware for data centers, is a bet that data will grow rapidly, and chip speeds only slowly. That view looks solid. But the price, pumped up by competing bids, presupposes a lot of success.

Barrick wisely decides harmony is golden

11 March 2019

The gold miner has struck a joint venture with Newmont, an $18 bln rival it earlier tried to acquire. Both sides should win. Newmont gets to pursue its own deal with Goldcorp. Barrick shareholders are spared the risk of an aggressive merger that left them with little to gain.

The Exchange: Austerity in the age of populism

8 March 2019

Fiscal restraint is going out of fashion. In his new book “Austerity”, Harvard professor Alberto Alesina sets out to explain when it’s needed. He tells Breakingviews of the hidden long-term risks of U.S. President Donald Trump’s policies and why Italy’s debt risks are not over.

Big Oil is too quick to rest on its laurels

8 March 2019

Exxon and Chevron paid more attention to climate change over the past year - and outperformed the S&P 500. But new plans to invest in Texas drilling show old habits die hard. Oil buffs gathering for the industry’s annual confab may wonder if the industry is shifting fast enough.

Lyft maps route to place where all is relative

8 March 2019

What’s the ride-hailing app worth on the stock market: Is it $15 billion, its private value mid-last year, or $25 billion? And will larger Uber top $100 billion? All the players are still private, so there’s nothing to compare. They’d better hope Lyft does a good marketing job.

Review: Gig-economy firms tread precarious path

8 March 2019

The likes of Uber tapped casualised labour to become global giants. They have created a “precariat” class of workers, open to exploitation and abuse. Colin Crouch’s “Will the Gig Economy Prevail?” offers a manifesto for a benign alternative, but underplays technological shifts.

Berry takes risky leaf out of Apollo playbook

8 March 2019

The U.S. packager has beaten the private equity group, its former owner, by snapping up UK peer RPC for $4.4 bln. It looks set to ape a private equity-style strategy of rolling up smaller rivals. But the deal comes with high debt, aggressive synergies, and limited due diligence.

Blackstone’s Tradeweb inhibits post-IPO governance

7 March 2019

The unit, owned by the buyout firm’s Refinitiv, is going public, using proceeds to reduce the stake held by banks. Supervoting stock will augment Refinitiv’s already 54 pct control over the electronic-trading platform. That’s one reason investors may mark down Tradeweb’s worth.

Viewsroom: Hostile gold diggers

7 March 2019

The three-way takeover fight involving Newmont, Barrick Gold and Goldcorp is full of aggression and big egos. Breakingviews columnists unpick the gold-mining M&A frenzy and debate whether cooler heads can prevail. Plus: China telecom giant Huawei has a public-relations challenge.

SoftBank whale jumps into Latin American pond

7 March 2019

Masayoshi Son's group is setting up a $5 bln fund to spend from Mexico to Argentina. That's a hefty bet for a region that got barely a third of that last year. It also stretches SoftBank even further. But demographics and sheer clout suggest a favorable result.