Lockheed-Boeing rocket JV feels competitive heat 25 May 2016 Elon Musk’s SpaceX just broke the monopoly on military satellite launches enjoyed by the defense contractors’ alliance. Congress may help the pricey venture by allowing it to buy more sanctions-tainted Russian rocket engines. That’d be a strike against efficiency and innovation.
New M&S boss fashions disappointing revamp 25 May 2016 Turnaround plans unveiled by new chief Steve Rowe have one big wrinkle. His makeover for the UK retailer involves short-term pain but may not solve its main problems - fierce competition for customers and a muddled offering. Bolder thinking is needed in such a tough sector.
Snapchat’s $20 bln worth could have staying power 24 May 2016 That’s the figure implied by new funding. Evan Spiegel’s firm has raised cash regularly and avoided some of the bells and whistles that distort the numbers. Unlike its messages and the stratospheric price tags on some other startups, Snapchat’s value may not evaporate.
Toyota, VW jump on cartech desperation bandwagon 24 May 2016 The Japanese automaker’s deal with Uber and its German rival’s with Gett come after GM invested in Lyft and Fiat Chrysler hooked up with Google. Each can learn from the other, but the technologists see opportunity while the manufacturers have more to fear about their fate.
Wells Fargo gives rivals more bad news than good 24 May 2016 Wall Streeters may be relieved to learn the California-based titan isn’t growing in securities, at least not yet. More worrisome is a decision by boss John Stumpf to cut overall return targets. Unlike Wells Fargo, most lenders already are struggling to beat their cost of capital.
1MDB scandal stings Singapore’s banking pillar 24 May 2016 The city has shut down BSI as Swiss authorities open a criminal probe into the private bank relating to the Malaysian state fund. The battle against illicit money flows is global. But Singapore is only now properly facing up to the risks of its push into wealth management.
BofA legal escape rubs salt in crisis wounds 24 May 2016 A U.S. appeals court tossed out a $1.3 bln verdict over dodgy loans sold to Fannie and Freddie. Like recent reversals of traders’ convictions, the case suggests greed and a little lying on Wall Street may not be unlawful. Those looking for accountability will be disappointed.
Takata’s funding drive will be a hard sell 23 May 2016 The Japanese auto-parts maker wants financial help to ride out its air-bag recall crisis. A few turnaround investors and industry peers will probably look. But huge unanswered questions about liabilities, prospects, and relations with big carmakers make clinching a deal tricky.
Redstones keep CBS and Viacom investors guessing 23 May 2016 The ailing mogul abruptly ousted Viacom boss Philippe Dauman and another longtime ally from a trust that someday will control the $40 bln media empire. That gives more power to Sumner’s daughter. It also sets the stage for an epic battle that minority shareholders can only watch.
Goldman could easily assuage shareholders on pay 20 May 2016 Only 66 pct backed how the Wall Street firm compensates its bosses. A $5 bln fine over dodgy mortgages didn’t help. But Goldman is also one of the few banks not to use long-term incentives in determining salary and bonus. Doing so would be a cheap way to win investor support.
New Petrobras boss is step toward needed change 20 May 2016 Brazil’s interim president has picked former Bunge Brasil boss Pedro Parente to run the scandal-hit $40 bln state oil producer. While no stranger to government, Petrobras’ fourth boss in five years has promised to end political appointments. That would be a boost for governance.
Deutsche’s latest mess looks like a Protium moment 20 May 2016 The German bank is probing a deal that enabled ex-trading boss Colin Fan and others to profit, with leverage provided by their own employer. The investigation is ongoing. But it looks to have similar flaws to Barclays’ Protium deal - with staff interests above shareholders’.
Richemont accepts new tempo for luxury watches 20 May 2016 The Cartier owner faces a drawn-out downturn in demand. April sales fell 15 percent, even compared to a terrible 2015. The Swiss group can cut costs, but the bigger problem is that luxury watch demand is less resilient than it once seemed.
Insider trading rap offers tip for U.S. boardrooms 19 May 2016 The prosecution of an ex-Dean Foods chairman and a gambling buddy is one of few to reach a company’s top echelons. It helps show that bosses aren’t above the law, and it suggests recently reversed convictions won’t eviscerate enforcement. Corporate America should be all ears.
Pushy investors test herd mentality in Washington 19 May 2016 The likes of Bill Ackman and Dan Loeb have been piling into the same stocks and now are joining forces to fight a perception they’re short-term focused. Congress could use the education, but is as excited about a call to do with Wall Street as boards are to hear from activists.
Chipmakers ailing from a double dose of trouble 19 May 2016 Sales at the likes of Qualcomm are falling for a second year in a row. Tight buyers in an unsettled global economy are partly to blame, but the semiconductor industry also lacks whiz-bang products. After a similar downturn during the financial crisis, the prognosis may be grim.
Thomas Cook is shock absorber for tourist turmoil 19 May 2016 Despite increased like-for-like revenue, the UK holiday group’s shares dropped by almost a fifth as it reported half-year results. A missing Egypt-bound airplane underlines how difficult the tourism business has become.
Goldman’s Tesla upgrade is a case of bad timing 19 May 2016 The Wall Street firm’s analysts moved the carmaker to “buy” just before its bankers took a role in a $1.7 bln stock sale. It smells bad - and watchdogs will surely take a look - but there are plenty of mitigating factors. This may just be Chinese walls working as intended.
Burberry’s cloth-cutting looks too tame 18 May 2016 The British brand plans to rip out 100 million pounds of costs after a 10 percent drop in full-year pre-tax profit. But despite speculation, there was no move to lighten the load on lead designer and Chief Executive Christopher Bailey. That may be a missed opportunity.
Apple ally Didi highlights China’s tech muddle 18 May 2016 Last year China wanted firms listed abroad to return. Now some buyouts are struggling, while the $25 bln Didi is mulling a U.S. listing. Tech is China’s hottest sector. But unless it gets easier to float at home, the industry’s biggest success stories will keep looking overseas.