Pete Peterson built a career, and legacy, on debt 20 Mar 2018 The former Lehman CEO and Nixon cabinet member revolutionized modern finance by teaming with Stephen Schwarzman to found private-equity giant Blackstone. He later used his wealth to champion the cause of deficit reduction. Washington has yet to repay that obligation.
Cox: Dual-class buyers’ early remorse at Facebook 20 Mar 2018 IPO investors in 2012 granted founder, CEO and Chairman Mark Zuckerberg totalitarian power to build the social network. He's now in over his head, seemingly struck dumb, amidst a whirl of data-mishandling allegations. His nearly 60 pct voting control means shareholders are stuck.
Elon Musk pay deal is crazy enough to get the nod 20 Mar 2018 The Tesla boss could collect nearly $60 bln over 10 years. That’s excessive and surely unimportant for motivation. Yet it’s built on PR-stunt targets involving sales, EBITDA and market cap exploding 10-fold or more. For investors voting on the plan, it’s like playing the lottery.
Europe’s data tax war is worthy but hard to win 20 Mar 2018 The EU may tax tech groups’ revenue. The bloc is right to argue that current rules overlook the value firms like Google extract from its citizens’ data. A crude levy on sales is far from perfect, but might add impetus to longer-term international reform efforts.
Private equity goes back to dangerous superlatives 20 Mar 2018 Strong buyout returns have investors putting more money than ever into funds that acquire companies with loads of debt. But deal multiples are nearing record highs, too. As legacy LBOs like Toys R Us and Claire’s go bust, it’s a reminder of the industry’s tendency to overheat.
Foreign banks find silver lining to U.S. clouds 20 Mar 2018 Congress isn’t handing the same regulatory relief to the stateside businesses of HSBC and others as it is to midsize domestic lenders. But Washington’s shift to more tailored regulations for the industry should at least give embattled foreign banks a bit of a break.
D.C. subway could ride Hong Kong’s MTR 20 Mar 2018 The Washington Metro's equipment and safety woes are a smoking symbol of U.S. infrastructure ineptitude. Market-based fixes would be wise. Other cities have hired Hong Kong's mass-transit provider for help, but its property and punctuality playbook also may be replicable.
Market tools can slake Cape Town’s water thirst 19 Mar 2018 The South African city’s taps may not run dry this year, but low rainfall, population growth and invasive flora keep the threat alive. Poor governance adds to the risk. Tradable water rights could bypass many of those problems, and set an example for other arid regions.
Facebook gives members one more reason to leave 19 Mar 2018 An election consultant’s use of 50 mln profiles creates fresh risks at a company reeling over fake-news and ad-measurement mishaps. Users have plateaued in key markets and people are spending less time on the social network. The danger is that members may unfriend it altogether.
Icahn-Newell pact clarifies Starboard’s value 19 Mar 2018 The maker of Sharpie pens and Crock-Pot cookers is giving the investor’s firm four board seats, including chairman, and handing it control of divestitures. Icahn’s entry confirms Starboard’s line that Newell needs an overhaul, while showing his fellow activist’s strategic limits.
Defense M&A fight pits poor David against Goliath 19 Mar 2018 CACI’s $7.2 bln bid for CSRA is 8 pct higher than the agreed deal General Dynamics struck last month. Neither offer stacks up financially, relying instead on rising U.S. defense spending. General Dynamics, though, has deep pockets and is paying all cash. Felling it will be hard.
Activists and their targets grow up together 19 Mar 2018 Investor militancy is no longer a cottage industry. Activist shareholders increasingly go after big game, with stakes in companies worth 26 pct of the S&P 500's capitalization. They come better prepared – and with allies. Boards, meanwhile, are learning to head off public fights.
Activist’s Barclays punt hinges on investment bank 19 Mar 2018 Edward Bramson’s Sherborne Investors has amassed a 5.2 pct interest in the UK bank. Some of Barclays’ problems – a CEO under investigation and legal issues – are short-term. A repeat of Bramson’s recent successes will hinge on turning around Barclays’ misfiring investment bank.
Zuckerberg is making a worrying passel of enemies 19 Mar 2018 The alleged exploitation of 50 mln Facebook profiles by political consultant Cambridge Analytica compounds the $540 bln social network's woes, as it contends with other backlashes. U.S. and UK legislators want to hear from founder Mark Zuckerberg now. He may be in over his head.
Viewsroom: How long should a leader lead? 16 Mar 2018 China’s President Xi Jinping can now stay in power for life. Goldman Sachs CEO Lloyd Blankfein seems ready to retire after 12 years at the top. Yet five years may be the ideal length of service. Breakingviews columnists discuss the limitations to limitless rule.
Legal truce a Wynn-Wynn solution for casino empire 16 Mar 2018 Steve Wynn may sell his stake in the casino operator after settling a lawsuit with his ex-wife. It makes sense now that he’s been turfed out as CEO, but regulatory, legal and valuation issues could deter many buyers. That leaves the deck stacked in favor of Elaine Wynn.
Qualcomm needs an intermediator more than a buyer 16 Mar 2018 The $90 bln chipmaker’s ex-chairman Paul Jacobs’ improbable buyout idea would need lots of help. The real key to boosting Qualcomm’s value is mending its rift with Apple. While Jacobs isn’t the man for that job, deep-pocketed SoftBank founder Masayoshi Son theoretically could be.
Elliott’s Italian master plan needs state player 16 Mar 2018 The activist fund wants to oust top investor Vivendi from Telecom Italia’s board and sell its network. A stand-alone telco backbone might attract a higher valuation and be able to shoulder more debt. However, success hinges on state-backed investor CDP’s readiness to chip in.
Holding: Courts may toss investors a crypto-curve 16 Mar 2018 To hear U.S. regulators tell it, initial offerings of many crypto-currencies are actually securities, and subject to strict rules. That’s far from clear, though, judging from cases moving through the legal system. With the jury still out, Congress needs to step in.
Michael Spencer tunes up for markets swansong 16 Mar 2018 The NEX chief executive is in talks to sell the London-based electronic broker to Chicago’s CME. Despite uncertainties caused by Brexit, shareholders have done well since Spencer offloaded the voice-trading unit in 2016. If other exchanges join in, they could gain even more.