Rob Cox: Sony email shareholders would like to see 17 Dec 2014 The hacking scandal at the Japanese conglomerate’s Hollywood studio isn’t just embarrassing. It’s a business problem for a company already struggling to turn itself around. Herewith, a fictional selection of internal messages Sony’s board ought to be fielding.
Europe could edge past U.S. in race to courthouse 17 Dec 2014 New rules and bank scandals boost financial fraud and class-action filings in Britain. Patent combatants flock to German judges. And spats over failed investments clog EU courts. The upshot: a lawsuit boom that may topple America as the world’s business litigation capital.
M&A "clear day" defenses can cloud investor rights 17 Dec 2014 Anti-takeover protections adopted before threats arise are more apt to weather legal scrutiny. It’s one reason Allergan was able to resist Valeant’s $52 bln bid. When triggered reactively, they’re considered unfair surprises. Either way, shareholders often get unneeded cover.
Baidu’s Uber stake is more hype than substance 17 Dec 2014 The Chinese web giant is already behind rivals Alibaba and Tencent in mobile taxi-apps. Strategically the tie-up looks like a coup. But without financial terms, investors are left in the dark. Uber’s controversial track record and Baidu’s shrinking margins add to the uncertainty.
This is as good as global recovery gets 16 Dec 2014 Since 2009, each new calendar year has brought declarations of the end of the crisis and predictions of an economic upswing. This time the mood is gloomy, and with reason. Weak growth turns out to be the new normal, not part of the transition.
Shooting suit may bring capitalism to arms makers 16 Dec 2014 A U.S. law shields firearms firms from product liability, making litigation over a Connecticut school tragedy a stretch. But the exemption arguably gives the likes of Bushmaster an unfair edge. The case will succeed if it prods Congress to treat gun companies like any others.
Jefferies closes annus horribilis on wicked downer 16 Dec 2014 The Wall Street firm racked up a $93 mln fiscal Q4 loss. Boss Richard Handler says a senior banker’s messy public divorce had no material effect. Poor trading, a bum acquisition and one big bad debt took their toll. It’s a damaging concoction that should be limited to Jefferies.
Uber’s law flouting could bring joyride to a halt 15 Dec 2014 The taxi app company is covering drivers’ fines for illegal pick-ups. That may be just another business expense to a firm that earned a $40 bln valuation by moving quickly and breaking the rules. But the legal, lobbying and PR costs of reckless behavior are accelerating fast.
BT makes biggest possible call on UK mobile 15 Dec 2014 The telco is nearing a 12.5 bln stg purchase of EE from Orange and Deutsche Telekom. That’s a surprisingly high 7.9 times EBITDA. Still, cost savings will help. And if BT wants to be big in mobile, buying the biggest UK network with the best mobile broadband offering makes sense.
Solar upstarts and utilities head for uneasy truce 15 Dec 2014 The soaring popularity of solar panels in the U.S. cuts carbon emissions but upsets utilities trying to make a return on grid investments. The industry’s attempts to slap fees on solar users sparked uproar in 2014. A new cost-sharing approach may take the heat out of the debate.
BC Partners strains at the leash for PetSmart LBO 15 Dec 2014 The private equity firm has come out on top in an $8.7 bln auction of the biggest U.S. pet-store chain. It’s 2014’s largest buyout. But paying 9.1 times trailing EBITDA looks loose. And while plenty of banks are offering financing, the debt levels could make regulators bristle.
European telecoms will dial up more deals 15 Dec 2014 Investors have brightened as M&A has swept the sector. Thanks to BT, Britain is up next. More mergers could follow in France, Italy and Belgium. What’s not to like? Well, windfalls from big cross-border deals looks distant and valuations already price in most of the good news.
U.S. budget spat puts bankers, lawmakers to shame 12 Dec 2014 Wrangling over a change to Dodd-Frank has delayed a deal to keep the government open. The amendment may only weaken financial reform slightly. But it smells bad that Wall Street wrote and lobbied for it. Allowing it to slow a $1 trln bill is another sign of Congress’s dysfunction.
Goldman updates IPOs for the Candy Crush era 12 Dec 2014 CEOs of firms heading for public markets are hooked on the bank’s app, which enables them to track results of roadshow book-building in real time. With Apple and IBM coding mobile software for big companies, the smartphone economy is swiftly moving from living room to boardroom.
Review: "Forgotten Depression" worth remembering 12 Dec 2014 James Grant’s new book on the U.S. government’s response to the 1921 crash is a timely reminder that our forebears knew of other, apparently more efficacious, remedies to cure financial hangovers than the hair of the dog.
LendingClub’s IPO brands it the Tesla of finance 11 Dec 2014 The loan platform’s shares soared after pricing above the range. Like Elon Musk’s electric carmaker, it’s now a disruptor with a good toehold in its sector and a sky-high valuation. As with Tesla, though, LendingClub’s stock market success rests on sentiment, not financials.
Binding Staples to Office Depot only easy on paper 11 Dec 2014 Activist Starboard may push for a $13 bln merger of the last two big U.S. office supply chains. Cost cuts enable Staples to pay a big premium and still generate good returns. Regulators might object, though, and too much debt is a risk with competition from Amazon and Wal-Mart.
More Porsche than Prada: Why Ferrari’s worth $7bln 11 Dec 2014 Fiat will float the iconic sports car brand in 2015 and wants investors to see it as a luxury goods company rather than a carmaker. That’s a stretch. Building Ferraris takes more capital and R&D than handbags and shoes. Margins - and multiples - are lower for a reason.
Fiat tries to make convertible a mandatory buy 11 Dec 2014 Mandatory convertible bonds – debt securities that become equity – aren’t to everyone’s taste. Fiat has priced its $2.5 bln issue to sell. Investors get a high coupon and access to the carmaker’s Ferrari IPO. That compensates for the bond’s low rating and deferrable interest.
Facebook’s next goal: crack the Socialist network 11 Dec 2014 Founder Mark Zuckerberg’s attempt to charm China’s censorship tsar has earned justified dislikes. It’s no longer unthinkable though that the social network could be allowed back into the People’s Republic. The challenge is to wrest new friends from huge local rivals.