Akzo board has painted itself into a corner 8 May 2017 The Dutch paint maker’s categorical rejection of rival PPG’s 24.6 bln euro bid creates two glaring problems for boss Ton Buechner. His self-imposed targets are fanciful, and many shareholders doubt his judgement on the deal. Should PPG go hostile, two battles will become three.
Markets call Trump’s war bluff on North Korea 8 May 2017 Investors are ignoring the U.S. president’s war rhetoric against Pyongyang, snapping up South Korean securities and modestly buying protection against default. Optimism over the global economy and a new leader in Seoul result in a mute reaction compared to past flashpoints.
Buffett’s praise of Jack Bogle sounds self-serving 7 May 2017 At his annual Omaha gala, the Oracle gave a well-deserved shout-out to Vanguard's founder. With big slugs of Berkshire Hathaway's portfolio struggling, including Wells Fargo and IBM, returns are converging with the S&P 500. That makes Buffett's strategy look more like Bogle's.
Dan Loeb’s Honeywell spin goes too far 5 May 2017 Hiving off the $100 bln conglomerate’s aerospace unit could boost the stock. But the activist’s argument that it would increase shareholder value by a fifth is a stretch and ignores the benefits the unit brings to Honeywell. New CEO Darius Adamczyk has other levers to pull first.
Buffett halo-stripping compounds IBM’s pain 5 May 2017 Berkshire Hathaway investments serve as seals of approval for the market. They can be worth billions, especially to firms like Goldman Sachs and GE in the midst of a crisis. But sales by the Oracle of Omaha can send an ominous signal. Big Blue won’t be the last to feel the sting.
Millennial vigor helps drive U.S. employment gains 5 May 2017 U.S. employers added 211,000 positions in April, reducing the jobless rate to its lowest level in 10 years. Moreover, unemployment among young people is finally echoing the national picture as they are joining the workforce in bigger numbers. It’s a sign of a broadening recovery.
Review: Can we avoid another financial crisis? 5 May 2017 That's the question Steve Keen sets out to answer in his new book. He concludes that a capitalist economy can no better avoid another blowup than a dog can avoid attracting fleas. It’s only a matter of time. If the Australian economist is correct, we don’t have long to wait.
Cost cuts won’t save Pearson or its CEO 5 May 2017 The UK education publisher is planning 300 mln pounds of savings by 2020, with the troubled North America business taking some of the pain. Markets aren’t giving embattled boss John Fallon much credit for the plans, and falling revenue could cancel out the gain to shareholders.
Arconic board shoves head back in the sand 4 May 2017 Firing CEO Klaus Kleinfeld gave hope directors might embrace bigger strategic changes to improve results. Now they’re contending the former boss had it right and that two new board nominations should be change enough. Its argument, like the outfit’s performance, is poor.
Viewsroom: Apple starts iPhone birthday bash early 4 May 2017 Lucre from apps and other services should get investors in the party mood ahead of the company’s iconic device turning 10. Big Oil gets buoyed by rising prices – and the New York Times by more readers. And Coach shows the retail industry how to cope with upheaval, up to a point.
IHeartMedia’s one big LBO hit gets an extended run 4 May 2017 The U.S. radio giant has muddled through a 2008 mega-buyout largely because of looser terms on $20 bln of debt. IHeartMedia isn't sure now if it can survive another year. As Bain and Thomas H. Lee fight to save their investment, creditors keep playing the same covenant-lite song.
Cox: Tech monopolies crowding out little guys 4 May 2017 Disruption remains the biggest buzzword for the startup community, evidenced at this week's Collision conference in New Orleans. With the so-called FAANG stocks now worth a collective $2.4 trln, however, they may be in a position to squelch any challenges to their own dominance.
Obamacare fever impairs Republicans’ vision 4 May 2017 The party is hell-bent on pushing a new health framework to fulfill campaign pledges. Congressmen are moving so quickly that the costs and coverage fallout are unknown. Important benefits could be waived while sick people pay more. Only voters may cure this political malady.
Holding: SEC’s home-court edge nearing welcome end 4 May 2017 The U.S. regulator has been using in-house tribunals to run up the score against Wall Street targets. A rare loss last month and a new bill in Congress, however, may push more cases into federal court, where legal safeguards are stronger. Fairer hearings are worth giving up a few wins.
VW-Fiat Chrysler merger too tempting by half 4 May 2017 Welding together the German and the Italian-U.S. carmakers might unleash cost savings of more than $38 bln. As the auto industry gets more challenging, and Fiat Chrysler boss Sergio Marchionne more eager to sell, that prize may trump memories of previous car deals gone wrong.
Next iPhone is key to Apple’s future in China 4 May 2017 Sales in what was once Apple's biggest growth market have now fallen for five straight quarters. Stiff competition with local handset makers and a weaker yuan both hurt. While app-store sales are promising, a real turnaround hinges on the success of its next flagship smartphone.
Puerto Rico restructuring will be no day at beach 3 May 2017 Congress gave the U.S. territory access to a form of bankruptcy. Now the board overseeing its finances, encompassing $70 bln of debt, has pressed the button. Creditors will get their day in court, and tidy plans in spreadsheets could end up as warped as in Detroit – or worse.
Tesla demonstrates valuation staying power 3 May 2017 Boss Elon Musk vows that annual Model 3 production alone can meet the company's target of 500,000 vehicles by the end of 2018. That should be enough for the electric-car maker's faithful to overlook past missed goals and growing competition, and keep the stock unjustifiably high.
Even yellow flags can’t dent Facebook’s growth 3 May 2017 The social network largely defied its own executives’ slowdown warnings with a 51 pct jump in ad sales, helped by Instagram’s success. Boss Mark Zuckerberg is adding 3,000 staff to police content after a spate of violent videos. He may need more to contain reputational risk.
Kansas’ fiscal fiasco a warning for Trump tax plan 3 May 2017 The president’s tax plan echoes sweeping cuts by the Plains state in 2012. The GOP governor’s bet on trickle-down economics slashed revenue but failed to spur growth. Lawmakers now want to reverse the reductions amid a school-funding crisis. It may be a crystal ball for D.C.