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.
Vodafone ambitions reflect tougher telco times 17 May 2016 The $85 bln mobile group has finished a $30 bln networks splurge. It also thinks EBITDA will grow between 3 and 6 pct this year. The wide range reflects the fact that its main markets are highly competitive. Given the EU’s tougher line on mergers, this won’t get any easier.
Burberry could use refresher in old-school retail 17 May 2016 A sector-wide slowdown has exposed the inefficiencies in the UK label’s operations. High costs and low sales density show room for tailoring. Burberry chief Christopher Bailey needs help, but of a less than luxurious kind - specifically, some traditional retail expertise.
UniCredit governance issues go beyond CEO’s office 17 May 2016 The Italian bank’s shareholders are discussing replacing Federico Ghizzoni, according to reports. But the CEO can’t take all the blame for UniCredit’s listless state. The bank’s swollen board, with institutional investors inadequately represented, needs change too.
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.
Italy’s old guard gets new religion with RCS bid 16 May 2016 Mediobanca and Pirelli are pitching in on a 773 mln euro bid for the Corriere della Sera publisher with Investindustrial, beating a rival bid. Putting RCS in the hands of powerbrokers sounds like a backward step. But the cash offer avoids some bad old salotto buono habits.
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.
Tesco boss spies a possible bargain 13 May 2016 Dave Lewis is opting to take 75 pct of his bonus in shares. That aligns his 4.6 mln pound pay package better with shareholders, whose stock slumped last year. Since Tesco sales are now turning round, his timing may be shrewd. The group stocks a lot of things, but not hair shirts.
Whiff of hedge-fund fear overpowers animal spirits 12 May 2016 Alpha-seekers assembled in Las Vegas for the annual industry SALT shindig sound mostly gloomy. That won’t change the minds of investors already inclined to push for lower fees after a run of poor returns. Omega’s Leon Cooperman did, however, offer some 46-year-old solace.
Dish short fund has investor appeal – at a price 12 May 2016 Kerrisdale Capital has raised $100 mln to bet that the value of Charlie Ergen’s $22 bln satellite-TV concern will plummet. The thesis is plausible and investors crave ideas that could pay off big. But one-stock funds are also “heads we win, tails you lose” setups for managers.
Aegon mixes short-term pain, long-term plain 12 May 2016 The Dutch insurer saw its capital position fall after changes to its hedging strategy led to a 50 pct year-on-year fall in earnings. New solvency rules mean capital ratios will move about more. That’s not great when markets are volatile too.
China’s planners won’t let go of the stock market 12 May 2016 Regulators are reportedly clamping down on fundraising in hot sectors, and may restrict overseas companies relisting at home. The desire to avoid a repeat of last year’s bubble is understandable. But China’s equity market won’t evolve as long as bureaucrats try to manage prices.
EU sets high antitrust bar for future telco deals 11 May 2016 Despite blocking the purchase of the UK’s O2, Margrethe Vestager claims she doesn’t have a one-size-fits-all approach. The UK market does have idiosyncrasies, and the antitrust tsar raised legitimate concerns. But Brussels is hardening its stance on the risks from consolidation.
Raiffeisen’s untangling gets off to a bad start 11 May 2016 The Austrian bank may merge its foreign-focused listed subsidiary with its unlisted domestic business. But considering this has been necessary for some time, the bank has given precious little detail. The uncertainty isn’t great for a group with a thin capital ratio.
Feeble margins could stall Alstom’s speed-up 11 May 2016 The French train maker boasts a strong balance sheet, record order intake and big mid-term growth ambitions. Yet a lacklustre operating margin of 5.3 pct leaves little room to cope with intensifying global competition. Sorting this quickly should be Alstom’s key focus.
Moncler’s off-piste record deserves more credit 11 May 2016 The Italian maker of 1,000-euro puffer jackets saw revenue grow 17 percent in Q1. Despite its sales densities and profit margins being among the highest in the luxury sector, its shares trade at a discount. Exposure to one product explains why, but it’s probably due more slack.
China listing doubts leave Qihoo investors on edge 11 May 2016 The U.S.-listed web group’s shareholders have accepted a $9 bln buyout offer. Yet a regulatory crackdown may scupper plans to float in China. Even after a rebound the shares trade at an 8 pct discount. That’s scant compensation for the risk that the buyout group may walk away.
Disney could use a double dose of cable magic 11 May 2016 The $170 bln media firm missed second-quarter profit expectations, as revenue growth stalled at networks ESPN and A&E. The twin disappointments highlight the need to figure out shifting TV-viewing habits. Add the search for a successor, and CEO Bob Iger’s job looks even tougher.
Uber’s deal with U.S. drivers looks cheap 10 May 2016 Treated as employees rather than contractors, the ride-hailing service might have had to pay them as much as $730 mln more, according to court papers. That makes a $100 mln two-state settlement look like peanuts – another reason why the judge on the case might reject it.