Jamie Dimon stands up to bank breakup bullies 7 Apr 2016 The JPMorgan CEO’s latest annual missive tackles everything from Brazil to Brexit. An overriding message that bigger is better in finance mostly resonates, however. A reasoned case like Dimon’s is key as the likes of Bernie Sanders and Neel Kashkari advance the carve-up cause.
ZTE is a long way from regaining investors’ trust 7 Apr 2016 U.S. export curbs slashed 16 pct from the Chinese tech group’s net profit last year. Heads have already rolled, and the threat to ZTE no longer appears existential. But the scale of any future penalties, or changes to ZTE’s business, is hard to predict.
Facebook live video set to beat rivals at own game 6 Apr 2016 Twitter and Snapchat were ahead of the social-media giant in bringing viewers real-time broadcasts. But with 1 bln daily users and new features, Mark Zuckerberg’s service will be hard to hold back. TV networks – and their $70 bln in annual ad revenue – could be vulnerable, too.
Tech slump could give rise to hostile M&A 6 Apr 2016 Falling valuations tempt buyers. Sellers, however, are often reluctant to accept lower prices. That makes the climate conducive for suitors to go directly to shareholders. Workday, Splunk and other cloud-software companies and chipmakers may want to be ready for unsolicited bids.
Halliburton boss loses trust if Baker deal busted 6 Apr 2016 The U.S. Justice Department is suing to block the oil-services giant’s planned takeover of rival Baker Hughes. That could put shareholders on the hook for a break fee worth over 10 pct of Halliburton’s market cap. CEO David Lesar’s pay and chairman’s role would deserve a rethink.
Abandoned Pfizer deal leaves all sides tainted 6 Apr 2016 The U.S. Treasury looks bad for changing the rules to kill the $160 bln merger with Allergan. Lawmakers’ inaction encouraged such tax-driven transactions. But Pfizer and CEO Ian Read bear the most responsibility for wasting time and resources pushing an overpriced, risky deal.
Uncle Sam puts $740 bln pension industry in a spin 6 Apr 2016 New rules to force brokers to put clients first look like good news for retirement savers. BlackRock, BofA and others with low-cost products should benefit, too. But others like Fidelity are likely to bear the brunt of the $17 bln in lost fees – and pass that onto clients.
Cops arrive just in time to break up the M&A party 6 Apr 2016 There’s no better sign that the current boom of corporate promiscuity has reached end days than the ferocious intervention by U.S. authorities citing antitrust, tax or national security concerns. The demise of Pfizer-Allergan should clearly signal the cycle is coming to a close.
ZTE purge is first step to sanctions solution 6 Apr 2016 The Chinese tech group has replaced its CEO and two other executives implicated in allegedly busting U.S. trade curbs. That should help to lift penalties that would cripple ZTE’s business. Other punishments may follow, but the existential threat facing the company is fading.
Allergan has chance at fresh start without Pfizer 5 Apr 2016 The $160 bln deal is on the rocks after Treasury killed the tax rationale, erasing 15 pct of Allergan’s market value. A timely sale of its generic-drug business to Teva for $41 bln will cushion the blow and contain comparisons to Valeant. The financial flexibility is much needed.
New Fed test metric both removes and adds risk 5 Apr 2016 Return on stressed assets shows which holdings get handicapped most in the annual exam of bank balance sheets. Selling them should reduce risk, increase capital returns and even help claims that cost of capital is falling. But it also leaves lenders with ever more similar assets.
David Tepper exposes tax-avoidance paradox 5 Apr 2016 The billionaire boss of hedge-fund firm Appaloosa is relocating to Florida. Though he’ll pay less tax, it’s rarely the motivation for such migration. Physically moving to save money seems easy enough, but doing so on paper with overseas M&A and offshore accounts is even easier.
Inflation insurance is new U.S. fad 5 Apr 2016 Investors have a new-found appetite to buy American bonds offering protection against price rises. U.S. inflation is finally ticking up and could overshoot the Fed’s 2 pct target. With Europe showing no such signs, though, the fashion won’t cross the Atlantic any time soon.
Israel may give Silicon Valley run for its money 5 Apr 2016 Tech and cyber-security know-how, startup spirit, VC funds and even climate make the Middle East’s startup hub a bit like the Bay Area. Jerusalem is keeping Tel Aviv on its toes. Israel has other advantages, too – a global outlook and perhaps greater hunger than in the Valley.
Twitter may score big with football digital rights 5 Apr 2016 Jack Dorsey’s social-media firm won permission to stream 10 NFL games for a reported $10 mln. That’s the price of a one-minute Super Bowl ad, making the deal a cheap way to up the $12 bln service’s user base. Twitter may finally gain some ground against rivals like Facebook.
CalPERS learns social responsibility can be a drag 5 Apr 2016 The $290 bln California pension fund may reinvest in tobacco stocks after a report found that exiting the sector cost it $3 bln over 15 years. There’s more to the idea than higher returns, though. Engaging financially with controversial firms can be a better way to effect change.
Uncle Sam’s anti-inversion hunt may bag big trophy 5 Apr 2016 The United States is under fire for not doing more to prevent tax-reducing M&A deals. The $160 bln Pfizer-Allergan merger is a prime example. New rules seem to put it squarely in regulators’ sights. With the target’s shares down sharply, the Big Pharma tie-up looks under threat.
Blackstone bets Indian IT can weather US election 5 Apr 2016 The buyout firm’s $1.1 billion bid for Indian outsourcer Mphasis looks brave when U.S. presidential candidates are touting restrictions for skilled foreign workers. The low valuation and a long-term contract with seller Hewlett Packard Enterprise at least offers some protection.
Disney’s fairytale CEO plan gets twist in ending 5 Apr 2016 Bob Iger’s right-hand man Tom Staggs is stepping down, a year after he was anointed as heir apparent. That leaves no obvious succession plan at Disney after Iger twice extended his reign. An outsider would be surprising. At least the company has two years to find a replacement.
ValueAct takes hit to its most valuable asset 4 Apr 2016 Jeff Ubben’s hedge fund has been accused by U.S. prosecutors of being an activist where it said it was a passive investor. ValueAct’s reputation for agitating quietly is already suffering from the Valeant meltdown. A fight against the government invites more unwanted attention.