SolarCity governance torched by bid mini-committee 28 Jun 2016 The clean-energy company could find only two directors independent enough to assess Tesla’s $2.8 bln takeover offer. And one of them is a venture capitalist whose firm has backed Elon Musk’s companies. This lack of proper board engineering shortchanges SolarCity shareholders.
Lyft mulls trip out of capital destruction 28 Jun 2016 The $5.5 bln ride-hailing app has hired Frank Quattrone’s Qatalyst – an adviser with a knack for selling tech firms at hefty premiums. With rivals Uber and Didi raising and burning billions in an attempt to gain control of markets, M&A discretion may prove wiser than valor.
Bank stress exams may test investor patience 28 Jun 2016 Results are due this week from the Fed on how 33 financial institutions performed in a simulated bad economic downturn. Countercyclical factors included this year could mean even banks that ace the tests will be required to keep more profit rather than pay out bigger dividends.
After Dieselgate, VW faces new big bad 28 Jun 2016 A $15 bln settlement with U.S. regulators all but buries the German carmaker’s emissions fraud. Now for the next crisis: falling sales. Since Britain plunged Europe into uncertainty, markets have priced in a 13 pct drop in 2017 earnings. That calls for zealous cost-cutting.
Guest view: U.S. inaction on Puerto Rico risks chaos 27 Jun 2016 The island territory can no longer make debt payments, its economy is in free fall, foreclosures are surging and citizens are fleeing, says Moody’s Analytics Chief Economist Mark Zandi. To avoid a humanitarian crisis, the Senate needs to pass the PROMESA act without delay.
“Frack Master” suit is a sign of bezzle shrinkage 27 Jun 2016 The U.S. SEC says Chris Faulkner inflated his shale-oil company’s prospects, then blew $80 mln of investors’ money on dodgy expenses. Hard times tend to reveal bad boom-era behavior. The oil patch’s lax governance makes it an obvious place for regulators to hunt for culprits.
Energy Transfer finds better to be lucky than bad 24 Jun 2016 The U.S. pipeline operator can wriggle out of its disastrous $20 bln takeover of rival Williams. A Delaware judge says a botched tax interpretation by lawyers was a genuine mistake, not part of a scheme to prevent the deal from closing. There may yet be a price to pay, however.
Review: “Gray Rhino” rambles into financial lexicon 24 Jun 2016 A new book uses the nose-horned beasts as a metaphor for obvious threats ignored by corporate and political leaders. Myriad examples enlisted by author Michele Wucker are engaging, but the solutions come off oversimplified. The gray rhino may not keep pace with the black swan.
Qunar’s cut-price buyout might just fly 24 Jun 2016 The travel agent is the latest U.S.-listed Chinese group to get a buyout proposal from back home. A 15 pct premium to a depressed stock price is hardly generous. But if major shareholder Ctrip can be persuaded to hop aboard, this deal could work.
Brexit fails to deter Henkel’s lust for detergent 24 Jun 2016 Amid the worst market meltdown in ages, the German consumer goods giant is forking out $3.6 bln for U.S. home-care rival Sun Products. The price is rich and the timing bold. But at least today Henkel looks smart to lower its European exposure and transform its position in America.
America is squandering a big immigrant investment 23 Jun 2016 Nearly $10 bln gets spent each year educating undocumented children legally in public schools. Two valedictorians and a Supreme Court ruling shine a light on the human capital being wasted. With employers braying for skilled workers, fixing this policy could deliver big returns.
Twilio IPO gallop suggests unicorns can run free 23 Jun 2016 The U.S. software firm debuted even as Brexit, interest rates and other global concerns have stalled most new listings. A 75 pct pop in the shares gave the fast-growing but unprofitable enterprise with lousy governance a $2.2 bln value. Silicon Valley’s hold on investors endures.
Stars may finally align against buyout-baron taxes 23 Jun 2016 A group of self-proclaimed “patriotic millionaires” wants to close a loophole that allows private-equity partners to pay lower taxes on investment profit. Clinton and Trump both back the idea, too. Though efforts in Congress have failed for years, fresh momentum is building.
Musk’s clean-energy deal runs on fossil governance 22 Jun 2016 The entrepreneur may see possibilities from uniting Tesla and SolarCity that others are missing. They seem, though, to share little beyond big ambitions, cash outflows and stakes owned by Elon Musk. Easier to spot are similarities to a dreadful mining and oil merger from 2012.
White House wannabes slip through safety nets 22 Jun 2016 America’s healthcare fund for the elderly will run out two years sooner than expected while Social Security resources are depleting fast, too, new research finds. Retirement savings already fall well short. These subjects are amazingly missing from the presidential campaign.
Facebook’s indie owners send upside-down message 22 Jun 2016 Shareholders not named Mark Zuckerberg gave more likes than frowny faces to just three members of the board. Puzzlingly that included Gawker-hunter Peter Thiel and not key executives like COO Sheryl Sandberg. It’s a head-scratcher probably explained by investors ticking boxes.
Tesla’s bid for SolarCity is mad science 21 Jun 2016 Elon Musk’s electric-car maker has offered to buy the solar-panel installer he also backs for up to $2.8 bln. The idea of a renewable-energy roll-up is at best way early and at worst wild. It looks like a way to boost SolarCity’s languishing stock at the expense of Tesla’s.
Yellen’s fidelity to low rates may be all relative 21 Jun 2016 Reluctance to move beyond a 0.25-0.5 pct range smacks of excess caution. Yet the Fed seems persuaded by a “new normal” with low growth, high employment and little inflation. Right or wrong, the gap between U.S. policy and Japan and the EU also could be part of the equation.
Congress, not Fed, has more to do on job creation 21 Jun 2016 U.S. hiring has slowed, yet there are millions of openings going unfilled. Janet Yellen says there is an imbalance between less-educated people looking for work and more skilled positions available. Addressing training and education needs is lawmakers’ business.
Kion’s forklift deal assumes serious heavy lifting 21 Jun 2016 Europe’s largest forklift maker Kion is paying $3.3 billion for U.S. logistics tech company Dematic. That’s 20 times last year’s operating profit. To earn its cost of capital, the buyer might have to wait until 2020 and make rosy assumptions on revenues, margins and synergies.