P&G’s ho-hum quarter a gut check for management 20 Oct 2017 The $230 bln diapers-to-soap conglomerate contorted to keep Nelson Peltz off its board. Though it modestly beat quarterly earnings expectations, its underlying issues haven’t changed. Boss David Taylor is under pressure to make headway with full accountability for any stumbles.
Daimler’s reform drive lacks horsepower 20 Oct 2017 Bumper third-quarter sales do little to address the Mercedes parent’s long-term problems, which include a margin-sapping global shift to electric vehicles. Plans to split in three would lift valuations if that led to a separate listing. But progress is at walking pace.
Lyft’s new $1 bln of cash spells gains over Uber 19 Oct 2017 The ride-hailing app has secured new funding led by Alphabet and a nearly 50 pct valuation increase. Its larger rival is struggling to regain momentum and is close to a down-round investment from SoftBank. Uber has the scale, but Lyft’s less aggressive approach is paying off.
Exchange Podcast: Scott Galloway 19 Oct 2017 The NYU marketing guru swung by Times Square to discuss what's next for "The Four" tech behemoths - Google, Apple, Amazon and Facebook. Among his predictions: one of them will be hit with a $10 bln-plus antitrust fine and Amazon will choose New York for its second headquarters.
HP Enterprise shows breakups can fail to shine 19 Oct 2017 Activists often prod companies to hive off promising businesses from boring cash cows. HP’s split shows the distinction isn’t always clear. The “exciting” servers and networking offshoot is returning more capital as expansion stalls while growth stirs at the PC and printer outfit.
Taylor-led Fed would be dangerous in manifold ways 19 Oct 2017 In addition to the Stanford economist's dogmatic bent for a programmatic monetary policy, John Taylor backs bigger regulatory changes than others in the running to be the next U.S. central bank chief. His laissez-faire ideas about policing Wall Street are loaded with risk.
New U.S. approach can better rein in drone dangers 19 Oct 2017 The FAA will share oversight of the vehicles with state authorities under a promising test project. Conflicting federal and local rules have caused confusion, with courts adding to the uncertainty. Combining forces can help regulators contain risks in increasingly crowded skies.
PayPal’s future rests on striking quadruple whammy 19 Oct 2017 The $80 bln payments firm is worth as much as Amex and has a higher multiple than Visa or MasterCard. Justifying that means renewing its deal with ex-owner eBay, nailing lending and expanding its popular Venmo app to merchants. For now, PayPal looks well-positioned to succeed.
Spare GE jet is symbolic target of Flannery sweep 19 Oct 2017 Scrapping a second plane that followed former boss Immelt around, just in case, is an easy sop for shareholders. The new CEO needs them on side as he mulls possible bigger changes at the $200 bln industrial giant, such as dropping long-held earnings targets or cutting dividends.
ICOs validate old-school “follow the money” mantra 19 Oct 2017 One of the biggest so-called initial coin offerings to date, $230 mln for what are known as tezzies, has led to a spat between its architects and a Swiss foundation that controls the digital cash. Where crowd-funding and crypto-currencies meet IPOs, traditional motivations apply.
Blackstone’s mass gives it gravitational pull 19 Oct 2017 Steve Schwarzman’s investment shop boosted earnings by 23 pct in the latest quarter, driven by management fees on its new $18 bln private-equity fund. With managed assets approaching $400 bln and $92 bln of dry powder, the alternatives firm has powerful momentum.
Verizon stuck in neutral as rivals shift 19 Oct 2017 The U.S. telecoms carrier reported a rise in wireless subscribers. But cable rivals Comcast and Charter are also offering mobile services. AT&T is trying to become a media company, and Sprint and T-Mobile may yet merge. A heavy debt load hobbles Verizon’s ability to quickly change lanes.
Ken Chenault a mediocre but tough act to follow 18 Oct 2017 The Amex boss is to leave after 17 years in charge. He survived a credit bust, an activist and losing the firm’s biggest client, Costco. But total return under his tenure lagged rivals. That may seem an easy target for new CEO Squeri to beat. But fintech will be his bugbear.
Greenhill loss heightens turnaround challenge 18 Oct 2017 The M&A boutique fell into the red last quarter and revenue plummeted as it completed fewer deals, even as most bulge-bracket rivals prospered. CEO Scott Bok is betting on a bumper recapitalization to boost shareholder returns, but that can’t mask the firm’s fundamental weakness.
Tootsie Roll bet could leave return cavity 18 Oct 2017 Hedge fund Spruce Point reckons the secretive confectionary firm may be worth half its $2 bln value. The short seller may have a point. But Tootsie Roll’s future rests on the health of octogenarian CEO and major shareholder Ellen Gordon. Betting against candy in general is safer.
Sexual harassment forces way into the board room 18 Oct 2017 Harvey Weinstein’s movie studio is in tatters. Mighty Amazon is wrestling with the fallout from alleged misbehavior of a top executive. They're not alone. The mistreatment of women has swiftly moved from an HR issue to a serious business risk deserving of attention from the top.
U.S. tax outlook opens M&A pricing divide 18 Oct 2017 Republicans want to cut the corporate rate to 20 pct, but the timing is as uncertain as the outcome. Theoretically, profit – and thereby valuations – could get a 23 pct boost from lower taxes. Sellers want that priced in, but buyers won’t. All-stock deals could be one answer.
TPG’s car-insurance deal comes with a warranty 18 Oct 2017 The buyout group and Uber investor is selling car insurer Warranty to Assurant for $2.5 bln, taking a 23 pct stake and some cash. It looks to have doubled its money. Taking shares as payment isn’t a full exit for TPG, but it leaves both parties assured of respectable returns.
Global watchdogs may curb U.S. deregulatory push 18 Oct 2017 The U.S. Treasury will decide whether to recommend scrapping the post-crisis bank resolution regime, as some Republicans urge. But foreign regulators threaten to impose new limits on American firms if it's ditched. That reduces the chances of a major rollback of financial rules.
Chancellor: 1929 is more apt anniversary than 1987 18 Oct 2017 Today's high stock prices, dollops of leverage and robust profit margins more closely resemble market conditions preceding the Great Crash than the minor blip that took place 30 years ago. Fold in risk parity, ETFs and other trading strategies, and a repeat could be coming.