Trump adds new impetus to old short-termism debate 17 Aug 2018 The U.S. president wants the SEC to examine letting public companies report earnings every six months, rather than quarterly. Plenty of others, like BlackRock’s Larry Fink, had already slammed the practice. Trump’s tweeted directive should prompt some useful independent analysis.
Review: Philip Green’s road to boom and bust 17 Aug 2018 The British retail tycoon thrived in an era of rampant consumerism, leveraged buyouts and tax avoidance. “Damaged Goods” reveals how this propelled him to the highest echelons of British society. His subsequent downfall is a cautionary tale for today’s troubled retailers.
Unions the first of many fights for Air France CEO 17 Aug 2018 As the airline’s first foreign boss, Ben Smith will face labour strife that ousted his predecessor and has cost 335 million euros. But the former Air Canada executive must also tackle the weak governance, competition and soaring costs that threaten the carrier’s survival.
Rio’s Canadian opportunism amplifies cash quandary 17 Aug 2018 The $80 bln miner wants to list its 59 pct stake in Iron Ore Company of Canada, Reuters says. The timing suggests an eye on amenable markets for the operation's premium product, as China goes green. Success will benefit Rio’s cash pile, but only makes the growth debate louder.
China’s startups can reinvent fewer wheels 17 Aug 2018 Beijing-based Redcore admits its "100-percent" homegrown browser has a Google base. Its programmers are the latest to dress up open-source software as Chinese, seeking state support. A clumsy localisation strategy does little for security, and distracts from real innovation.
Cautious miners leave room for new swashbucklers 17 Aug 2018 Heavyweights like BHP have retreated from promising projects in tough spots. Even daring Glencore is fretting about Congo. The result is a long list of untapped resources and few buyers outside China. An intrepid fresh player could step in - if it can access private capital.
Revamped U.S. deal reviews are skid risk for Tesla 16 Aug 2018 Saudi help in a buyout could spur national-security scrutiny under new powers. Tesla’s tech might be deemed critical, while D.C. also worries about China's ambitions. Rules and pilot programs are works in progress, but it's another uncertainty for CEO Elon Musk’s convoluted plans.
Walmart sharpens as Amazon efficiency edge dulls 16 Aug 2018 The $270 bln retailer increased quarterly sales 4 pct. That pales next to its Seattle rival’s latest 39 pct rise. But Walmart’s workers are as productive as ever while Amazon is employing many more, and getting less in return, as it expands stores, warehouses and distribution.
Italy bridge fallout will shape infrastructure fix 16 Aug 2018 Atlantia shares have fallen 30 pct on fears the government may cancel its contracts after a fatal bridge collapse. The tragedy reinforces the case for more investment. The government’s treatment of the toll-road operator will determine whether investors are willing to play along.
Britain’s Disney M&A ruling is a bit Mickey Mouse 16 Aug 2018 The Takeover Panel, generally a sound custodian of UK bid rules, is keeping the Magic Kingdom’s minimum buyout price for Sky at 14 pounds per share. Nudging it higher, in line with Disney’s Fox bid, would have set a better precedent for similar deals in the future.
JD’s shopping problem worsens bad financial habits 16 Aug 2018 Quarterly earnings at China's $46 bln web retailer halved year-on-year, as it pays up for new users. The market is maturing and competition with Alibaba is fierce. JD's off-piste bets, and its use of non-conventional accounting practices, are adding to the noise.
Carlsberg’s drinking game victory looks temporary 16 Aug 2018 The Danish brewer’s second-quarter sales grew a better-than-expected 7.6 pct. The World Cup turned its big Russian business from a drag into a boon. While Carlsberg now trades at a premium to Heineken and AB InBev, less exposure to emerging markets means the bump is temporary.
China will fake until it makes better muni bonds 16 Aug 2018 The finance ministry told regional governments to hurry issuance of about 1 trln yuan of bonds to drive growth. It’s also stipulating they yield more than the sovereign rate. Despite progress building sustainable funding channels, Beijing mixes its messages to local officials.
Airbnb’s China business could learn from Uber 16 Aug 2018 The flat-sharing giant faces stiff competition and regulatory risk in the People’s Republic, but that doesn’t mean it should cut and run like Uber did. Partnering with a domestic incumbent could help both sides cash in on China’s travel boom.
How could a Tesla buyout pay off for investors? 15 Aug 2018 They might want to double their money in five years after taking the $60 bln electric-car maker private. Run the numbers with Breakingviews' new calculator to see what Elon Musk's company would have to achieve to make that happen.
Global dominance is key to Tesla buyout payoff 15 Aug 2018 Investors taking a company private often aim to double their money in five years. For that, Elon Musk would have to drive a sevenfold rise in vehicle sales, Breakingviews calculates, making Tesla as big as BMW and in command of almost half estimated all-electric car production.
Race is on to be the Netflix of weed 15 Aug 2018 Constellation Brands’ $4 bln investment in cannabis producer Canopy Growth could kick off a feeding frenzy, akin to that over media content. Beer isn’t the only industry with turf to defend or skills applicable to marijuana. Valuations could get even higher than the customers.
China crackdown exposes Tencent’s gaming addiction 15 Aug 2018 Disappointing second-quarter revenue adds to fears of a slowdown at the Chinese web giant, which has shed $170 bln in market value in 2018. Now Beijing is restricting new video games. Despite heavy investment in new businesses, Tencent’s bottom line still depends on gamers.
Shareholders need sharper teeth in UK pay battle 15 Aug 2018 The average CEO pay in the UK’s largest listed companies increased by 11 percent last year, and is now 167 times that of the median worker. That’s in spite of a move by investors to hold boards to account. More frequent votes on pay, and tougher performance targets would help.
Indonesian fight to help rupiah carries risks 15 Aug 2018 The central bank has raised rates to limit the damage to its currency from a Turkey-triggered drop in emerging markets. Meanwhile, the government is slapping tariffs on some imports. Monetary fixes are rarely enough but Jakarta’s solutions may jeopardise welcome economic reforms.