Viewsroom: Trump’s borderline tax ideas 26 Jan 2017 Two competing tariff ideas from President Trump and congressional Republicans bring merits but mostly unforeseen risks. Meanwhile, any cut in the corporate tax rate will benefit hapless Yahoo and its Asian holdings. Plus, why it pays to bet against Davos Man's thinking.
Jack Ma’s Ant Financial buys an American colony 26 Jan 2017 The $880 mln purchase of remittances firm MoneyGram looks like a counterintuitive bet in a de-globalizing world for the Alibaba founder's financial arm. International payments are a tough business. But MoneyGram gives Ant a U.S. base with tunnels to many developing markets.
Verizon’s ambition brings risk of illogical buying 26 Jan 2017 The $200 bln telco is eyeing $84 bln cable company Charter after taking on smaller AOL and – perhaps – bits of Yahoo. Past splashy bets like its $130 bln purchase of Vodafone are showing signs of structural decline. Verizon's search for new businesses is looking haphazard.
Detroit can power-steer around political obstacles 26 Jan 2017 The new president wants more U.S. factories and jobs. In theory that could cost the car industry $60 bln-plus. But Ford and GM have spare capacity and good PR folks. Other Trump policies should help carmakers, too. They can turn connected and driverless tech to their advantage.
U.S. economic data in danger of taking Chinese turn 26 Jan 2017 Donald Trump and his aides often question figures like the jobless rate. Now he is in charge of agencies supplying data, like the 2016 GDP reading due on Friday. Such statistics are hard to fudge but the new regime's penchant for extreme spin puts their credibility at risk.
J&J bid lets Actelion have $30 bln cake and eat it 26 Jan 2017 Johnson & Johnson has offered $280 per share for the Swiss drugmaker - 70 pct more than it was worth last November. That's a full price to bolster the U.S. group's specialist drugs portfolio. Meanwhile, Actelion shareholders get to keep most of the upside from its R&D pipeline.
RBS takes baby step on road to U.S. redemption 26 Jan 2017 The UK bank's latest $3.8 billion charge almost doubles provisions relating to alleged mis-sellling of U.S. mortgage securities. The final cost could be far higher, since RBS is probably a year away from a settlement. Still, the extra bit of balance sheet clarity is welcome.
Syngenta forces hedgies to read Chinese tea leaves 26 Jan 2017 Investors have swung from despair to optimism over the agribusiness giant's $43 bln sale. The implied probability of ChemChina's bid for Syngenta succeeding has leapt from 10 pct to over 60 pct in a few short weeks. Beijing's involvement means extra complexity for arbitrageurs.
Harvard transfers to new school of investing 25 Jan 2017 After years of lagging returns on its $36 bln pot, the Ivy League endowment is slashing staff to rely more on outside managers. New boss N.P. Narvekar is also getting a tighter grip on the portfolio's underlying risks. Harvard is finally admitting it can learn from others.
Trump’s Mexican standoff a lose-lose proposition 25 Jan 2017 The American president unveiled border-wall plans as Mexican officials arrived in Washington to discuss reworking NAFTA. Trump has blasted the pact as a terrible deal. Mexico says it could ditch it entirely. A better relationship is possible, but so too is an economic disaster.
Gary Cohn banks perfect hedge against Trump role 25 Jan 2017 Cashing out of Goldman with the stock near a high and helping the Dow top 20,000 is worth at least $100 mln to the bank's ex-No. 2. Not only is he an early beneficiary of the new regime, he's protected if the policies he promotes as the president's top economic adviser fail.
Cisco pays fantastical price to capture unicorn 25 Jan 2017 The networking giant's core switch and router businesses face tough times. Buying software firm AppDynamics for $3.7 bln offers some respite from hardware woes. At an estimated 12 times revenue, Cisco is paying over the odds to add a bit of excitement to its story.
Breakdown: Border tariff vs. border-adjustment tax 25 Jan 2017 Donald Trump wants to hit firms that outsource with a simple levy on imports. GOPers in Congress have pitched a more complex idea built into a corporate-tax overhaul, which might more reliably offset the effects of lower tax rates. The plans create different winners and losers.
Trump can teach May about the art of the deal 25 Jan 2017 A trade pact between the UK and the United States could be helpful to both. The faster it comes, the less comprehensive it would be. Yet what an accord between the two leaders might lack in scope would be made up for by the creation of a clear loser: Europe.
Tax reform could strip the “L” from LBO 24 Jan 2017 Many companies love the idea, espoused by President Donald Trump and Republicans, of slashing corporate tax rates. But one quid pro quo, ending the deductibility of interest payments, would spike one of private equity's most potent weapons – especially if interest rates go up.
Verizon and AT&T will get best connection from DC 24 Jan 2017 President Trump named a net-neutrality critic to run the FCC, the communications industry watchdog. That means internet providers may soon be able to charge the likes of Netflix to stream content faster. It'd be a timely fillip to earnings as their core phone business declines.
Even a pariah can poke holes in drug-lobby spin 24 Jan 2017 The industry wants the public to focus on good deeds rather than price hikes. "Less hoodie, more lab coats," it says. Discredited hoodie-wearing ex-CEO Martin Shkreli quickly noted publicly that most drugmakers bear a stain or two. He's right: Big Pharma hasn't helped itself.
Avis steers wrong way to avoid investor hazard 24 Jan 2017 The $3.2 bln rental-car outfit adopted a poison pill after its biggest shareholder refused to renew a standstill agreement. Avis worries big buybacks will give hedge fund SRS creeping control without paying a premium. A simpler, fairer solution would be to pay dividends instead.
Blackstone prices its housing fixer-upper to move 23 Jan 2017 The biggest portfolio of U.S. single-family rental homes should tempt investors. The buyout giant is pitching the $1.5 bln IPO of Invitation Homes in line with rivals despite superior fundamentals. The cautious approach is sensible given the headwinds facing the housing business.
Judge, not Trump, kills U.S. health insurer love-in 23 Jan 2017 Aetna's $34 bln deal for rival Humana was crushed on antitrust grounds in court. That bodes poorly for Anthem's star-crossed $46 bln Cigna bid. It's a mercy killing for the firms' shareholders, who watched UnitedHealth, which sat out consolidation, gobble up market share.