Fossil fuels deserve dispassionate analysis 1 Jul 2015 Coal, oil and natural gas are dirty and contribute to global warming. They also make the global economy hum. Substitutes remain more expensive. That matters most in poor countries where GDP growth does the most good. A wise climate policy would count up both sides of the ledger.
Apple marching to the drum of its own Beats 30 Jun 2015 The company’s new subscription music streaming and online radio services could upend markets dominated by Pandora, Spotify and SiriusXM. Their combined annual revenue of $6.4 bln would be equaled by just 6 pct growth in iPhone sales. The hardware angle sets Apple’s effort apart.
Breakups, activists presage more industrial M&A 30 Jun 2015 Emerson said it plans to hive off its struggling network power business, a possible prelude to more spinoffs at the $37 bln conglomerate. And Nelson Peltz took a stake in $12 bln rival Pentair, saying he wants management to do deals. It’s more fuel for the mergers fire.
Rob Cox: Uber gets a pass on its Wall Street habit 30 Jun 2015 Big banks break rules and pay fines. Traditionally it’s just a cost of doing business. Uber, meanwhile, pays fines when drivers violate regulations that stand in the way of its business model. Nowadays banks attract outrage, but Uber is often forgiven in the name of disruption.
Winners’ bets get bolder in the biotech casino 30 Jun 2015 Celgene is paying a 100 pct premium for a 10 pct slice of two-and-a-half year-old Juno Therapeutics. That sounds bonkers, even for a fast-moving technology like immune cell modification. The sector is on a streak, but the risk of crapping out in drug development remains high.
KKR pioneers dubious sort of private equity deal 29 Jun 2015 The firm that helped blaze the trail on LBOs four decades ago has become one of the first to settle with the SEC over expenses charged to investors in its funds. KKR will have company, however. Individual sums may be small but, like the fees themselves, they’ll start to add up.
Supreme Court alters rulemaking costs and benefits 29 Jun 2015 U.S. justices quashed air-pollution limits whose expense seemed to far exceed their worth. Though a narrow decision, it’s a growing problem in financial regulation, too. With judicial knives out for questionable rules, agencies drafting them may have to adjust their own thinking.
Puerto Rico mixes bitter sovereign-muni cocktail 29 Jun 2015 The U.S. territory says it can’t repay $72 bln of debt. A national borrower could try to devalue its way out of the mess. But Puerto Rico, like Greece, doesn’t have that option. A Detroit-style bankruptcy would require changes in U.S. law. It’s the worst of both worlds.
SpaceX flameout hardly heralds failure 29 Jun 2015 Space flight is like the venture capital industry in reverse: Most launches succeed, but a prominent few explode spectacularly. The formidable barriers to entry, rivals’ similar failures and SpaceX’s relatively low costs mean Elon Musk’s company remains on the right trajectory.
Supreme Court slices Wall Street some wedding cake 26 Jun 2015 The landmark ruling approving gay marriage gives even banks reason to celebrate. Benefits for same-sex spouses will be far cheaper and easier to grant, enabling stronger competition with more progressive Silicon Valley for workers. It’s a joyous union of equality and utility.
Brazil needs Dilma 2.0 to shine on U.S. visit 26 Jun 2015 President Rousseff’s statist policies helped put Brazil’s economy in the tank. Her task now is to convince U.S. investors the more market-friendly persona she has adopted since re-election is real and resilient. Robust backing for her finance minister would reassure Wall Street.
WeWork stretches sharing-economy valuations 26 Jun 2015 The groovy provider of office space - and beer - to millennial workers is now worth $10 bln after its latest funding round, doubling in just six months. WeWork is growing fast, but based on established rivals’ metrics earnings would need to jump 15-fold to justify that price tag.
U.S. justices leave door ajar to risky home loans 25 Jun 2015 The Supreme Court confirmed that even neutral housing policies can be illegal if they have a prejudicial effect. That keeps banks and other mortgage providers vulnerable to claims of unintentional bias. More bad lending practices, not less discrimination, could be the result.
Williams may get too twisted avoiding complexity 25 Jun 2015 The U.S. natural gas pipeline operator wants to absorb its MLP offshoot in the hope of growing faster. A $53 bln takeover by Energy Transfer would put it in a more sprawling partnership web. Absent a Plan C, Williams could have a hard time showing greater value in simplicity.
Supreme Court tells Obamacare opponents to move on 25 Jun 2015 The top U.S. court upheld subsidies for health coverage bought on federal markets. The president’s landmark reform is popular and, now, entrenched enough to survive. Even if Republicans win the White House in 2016, they need to stop wasting time on the issue and start governing.
IAC investors may get a Match from partial divorce 25 Jun 2015 Boss Barry Diller is spinning off the company’s online dating unit, but will retain control. Match, which contains fast-growing Tinder, is profitable with tech-like margins but showing some signs of age. Diller’s splits, though, have a history of creating value for shareholders.
Coty takes farcical route to right CEO 25 Jun 2015 Bart Becht is staying as the perfume maker’s interim boss, a week before outsider Elio Sceti was due to take over. The former Reckitt chief and dealmaker is just who Coty needs if its bid for P&G’s beauty business succeeds. But it hardly counts as a well-planned succession.
Boeing’s new captain can’t rely on autopilot 24 Jun 2015 During Jim McNerney’s decade at the controls, the shares failed to fly as high as the broader aerospace and defense index. New CEO Dennis Muilenburg faces competitive and union headwinds, but also extra turbulence in Washington. Boeing’s next leg requires a steady pair of hands.
New drivers could rev Formula One’s billions 24 Jun 2015 Private equity backer CVC is ready to speed off after a decade of turbocharged returns, while 84-year-old patriarch Bernie Ecclestone may not be doing enough to tune high-tech motor racing’s commercial chassis. Qatari and U.S. owners might just restore full power.
Palantir’s mystery inflates its $20 bln valuation 24 Jun 2015 The private data analytics firm beloved by government intelligence is raising $500 mln. Going public may not be an option for Palantir given its clients and culture. That deepens the enigma that further feeds its potential value - a James Bond privacy premium of sorts.