Deutsche, Barclays hit in D.C. watchdog crossfire 18 May 2016 Treasury’s new proposal to curb tax-driven cross-border M&A targets debt U.S. units issue to overseas parents. That, though, is what the Fed is making big foreign banks do to prevent bailouts. The two agencies are trying to fix the mess. But it puts Washington in a bad light.
Wall Street puts old Washington ways on ice 18 May 2016 Big banks are infamous for lobbying against swathes of financial reform. Of late, though, they’ve cut back. Now they’re actively pushing congressional GOP bigwig Jeb Hensarling to ditch a bill to repeal Dodd-Frank. Fears of a public backlash are staying their hand – for now.
Nokia phone demise a warning for all tech giants 18 May 2016 Microsoft finally ditched the basic handset business in a deal that will see the devices reborn under the control of former Nokia bosses and Foxconn. The $350 mln sale price for the former crown jewel of a $300 bln enterprise is a testament to how quickly tech empires can vanish.
Apple ally Didi highlights China’s tech muddle 18 May 2016 Last year China wanted firms listed abroad to return. Now some buyouts are struggling, while the $25 bln Didi is mulling a U.S. listing. Tech is China’s hottest sector. But unless it gets easier to float at home, the industry’s biggest success stories will keep looking overseas.
JPMorgan owners miss a trick snubbing breakup idea 17 May 2016 Just 2.5 pct of the bank’s investors voted for studying a possible split. There’s less reason to dismember the lender run by Jamie Dimon than Citi, whose shareholders dismissed a similar proposal. But it would be a useful exercise – and might even bolster the case for big banks.
Wall Street given license for yet more low returns 17 May 2016 Investment banks hoping a recovery will boost dismal earnings just got a slap from BCG. The consulting firm reckons they’ll lose more business to regulation and new competitors. The solutions it offers will take time and money, excusing subpar earnings for a few more years.
Dell, Dex sum up dozy bondholders in a nutshell 17 May 2016 The PC maker may face long-term decline yet is selling 30-year debt as part of a $20 bln package to help pay for EMC. The Yellow Pages publisher is hitting its fifth bankruptcy in seven years. They’re apt examples of how short-term yield boosts entice bond buyers to ignore risk.
Illinois governor all but summons bond vigilantes 17 May 2016 In an interview with Breakingviews, Republican Bruce Rauner challenged a pervasive belief in markets that governments can always just raise taxes to plug deficits. The issue resonates beyond his state’s $140 bln fiscal mess. Debt investors have neglected to focus political minds.
Pandora investor hits right note with sale push 17 May 2016 Activist Keith Meister’s firm urges the online music service to find buyers after becoming its largest shareholder. A costly purchase, CEO change and lack of song rights suggest the company’s fading. Rivals Spotify and Sirius XM are possible partners. The board should be all ears.
Cox: Pfizer death-row move serves investors, too 16 May 2016 The drugmaker best known for trying to dodge taxes and cure erectile dysfunction will restrict use of its compounds in executions. A bit like Google’s doing with payday lenders or CVS did with tobacco, it’s a moral stance made easier by ultimately reducing risk for shareholders.
No harm, no foul gets timely Supreme Court tweak 16 May 2016 The top U.S. tribunal nixed suits that can’t prove injury but said the damage can be intangible – loss of privacy, for example. The ruling may allow a case against Spokeo to continue while setting useful limits on class actions. That’s a win for lawsuit foes and proponents alike.
Apple falls far from Buffett’s investing tree 16 May 2016 Berkshire Hathaway disclosed it bought a $1.1 bln stake in the iPhone maker just ahead of its first revenue decline in 13 years. Apple’s valuation, cash stockpile and brand are attractive. A limping IBM investment, however, should be reinforcing Buffett’s tech aversion.
Pfizer’s $5.2 bln Anacor bid dodges bigger issue 16 May 2016 The drug giant may have bagged a good deal for the maker of eczema and toenail fungus remedies – assuming Anacor gets all needed approvals and sales soar. Bolt-on acquisitions can be helpful, but the important question for $200 bln Pfizer remains: will boss Ian Read break it up?
Terex turns controversial M&A fight into group hug 16 May 2016 The crane maker scrapped its merger with Finland’s Konecranes after new U.S. tax rules killed the deal’s logic. Konecranes is now just buying the ports business, the unit that raised security fears about a rival bid from China’s Zoomlion. It’s now free to buy the rest of Terex.
Gannett’s higher bid lays waste to Tribune defense 16 May 2016 The owner of USA Today has upped to $490 mln its offer for the L.A. Times publisher. It’s a 99 pct premium and a better multiple than virtually all but the most outlandish recent newspaper deals have commanded. Stalling Tribune Chair Michael Ferro has little choice but to engage.
Wall Street makeover would miss the point 13 May 2016 Financiers, politicians and pollsters reckon the industry needs a glitzy PR campaign to combat the impression it’s dishonest. But such an operation could leave bankers with egg on their face. Breakingviews envisions an image consultant advising CEOs to stick with the basics.
Facebook better off liking title of top media firm 13 May 2016 The $340 bln social network denies skewing news to the left on its site, saying algorithms and rules minimize bias. Like all purveyors of stories, though, the company is finding points of view can’t be helped. It’s time CEO Mark Zuckerberg embraced his role as a media boss.
Quicken Loans may yet reroute U.S. lending justice 13 May 2016 Prosecutors say it knowingly broke rules on government-backed mortgages. The lender wants its day in court, calling the feds’ actions a “misuse of power.” The likes of Wells Fargo have settled rather than fight. Forcing the government to make a case at trial could change that.
Blockchain teamwork could help banks fight hackers 13 May 2016 An $81 mln central bank heist and a new attack on a commercial lender underscore the rise of cyber-related risks. The European Central Bank wants banks to log serious incidents. But industry collaboration - as seen with distributed ledgers - would do more to shore up defences.
Apple’s $1 billion plucks a strange fruit in China 13 May 2016 The tech giant says investing in car-hailing app Didi – whose Chinese name is “little orange” – will help it in the People’s Republic. Apple can afford to join a costly battle with rival Uber. But it’s less obvious how that will revive iPhone sales or clear regulatory hurdles.