MAUs chase puffs up Snapchat’s value 7 Jan 2015 The disappearing-message service has 100 mln monthly active users, is growing fast and just raised $486 mln. It’s now worth more than $10 bln, thanks to the idea that large social networks are inherently precious and should reap cash from ads and apps. Those are big assumptions.
Sainsbury defies the gloom in UK retail 7 Jan 2015 The British grocer had a relatively happy Christmas. Like-for-like sales fell 1.7 pct in its third quarter – a surprisingly strong performance in a brutal market. Much depends on the recovery plans of bigger rival Tesco. But Sainsbury’s shares look oversold.
Dismantling a Chinese developer could get ugly 7 Jan 2015 Stricken housebuilder Kaisa denies it has decided to wind itself up after defaulting on a loan. Even so, a debt restructuring looks inevitable. That will pit bondholders against banks and homebuyers who paid up front, and expose the flimsy structures foreign investors rely on.
MSCI and ValueAct both need help on activism 6 Jan 2015 The data company’s rejection of 8.3 pct investor Jeff Ubben’s request for a board seat looks cack-handed. MSCI could use a shareholder-focused director. Yet Ubben’s ValueAct, with success at Microsoft under its belt, also seems tactically challenged now that the fight is public.
UK bank firewalls need pragmatism not dogmatism 6 Jan 2015 Lloyds is questioning why it needs a separate board to oversee non-retail activities. If ring-fencing could cure all ills, carve-outs would merit short shrift. But the UK can act tough in better ways – especially by demanding adherence to global bail-in rules.
IBM turnaround requires atypical activist fix 31 Dec 2014 Big Blue’s strategy of cost cuts and debt-fueled buybacks is no longer working – but the tech giant keeps trying. A tarnished balance sheet, lean staffing and a history of disposals rule out typical activist wheezes. Prodding the company to invest in its business could pay off.
Shake Shack IPO disappoints in taste test 30 Dec 2014 Celebrity restaurateur Danny Meyer’s global chain of burger joints is serving up some of the uncommon fixings found in new tech stocks. Two classes of shares and creative financial metrics are unappetizing. At least the bottom line offers a sweet refreshment to wash it all down.
Tesco will have to fight for its independence 30 Dec 2014 At $40 bln, the UK’s No. 1 grocer would be an M&A mouthful. A leveraged buyout looks tricky but strategic buyers have a rare opportunity. Tesco’s long-suffering current shareholders might jump at a chance to cash out. Much depends on the person chosen as the new chair.
JPMorgan soul-baring cuts room for error 24 Dec 2014 Jamie Dimon’s bank has followed Goldman Sachs’ 2011 lead by publishing a report detailing how it has responded to crises. Amid the PR-speak are some worrying admissions and much-needed improvements. Future failures and shareholder concerns will be harder to explain away.
Clean sweep needed to restore trust in Petrobras 24 Dec 2014 The state-controlled oil giant is mired in a corruption scandal and has seen its stock plunge over the past year. Nothing short of firing current management and appointing more independent directors will allow Petrobras, and really Brazil, to restore credibility with global markets.
Mary Barra gets a second first year at GM’s wheel 24 Dec 2014 The carmaker’s ignition-switch fiasco crashed her debut as CEO. The crisis may, though, have speeded up much-needed changes. Barra needs to show these will stick. She also has to prove the Motown firm is prepared for what may be some of the biggest changes the industry has faced.
Sberbank battles to keep global ambitions alive 23 Dec 2014 Russia’s biggest bank has built strong returns and international credentials. While turmoil at home hits hard, it can just about stick to its investment story for now. But if the economy really tanks, Sberbank may struggle to avoid capital remedies that make it look more Russian.
BP’s Rosneft stake exposed for what it is 22 Dec 2014 Turmoil in Russia will hurt BP’s accounts via its 20 percent stake in Rosneft, at least on paper. But in cash terms, the impact looks manageable. This is a financial holding which provides BP with limited dividend income. Any strategic value looks very long term at best.
Activists may take the Pepsi, and Coke, challenge 19 Dec 2014 Thanks to stagnant sales the world’s top soda makers – with $300 bln of combined market cap – already attracted agitators in 2014. Now Pepsi is risking a proxy fight over billionaire Nelson Peltz’s break-up plan. Coke, too, may face a radical shake-up if it can’t reignite growth.
Roche double blow increases dealmaking pressure 19 Dec 2014 The pharma group has suffered two big drug failures. The setback over Alzheimer’s is no shock—the disease has been a money loser for big pharma. A second knock in Roche’s core cancer franchise hurts more. The failures will increase pressure on Roche to deploy excess cash.
Deutsche strategy rejig may presage CEO succession 19 Dec 2014 The German bank is set to review its direction in 2015. Its bet on capital markets remains unproven. Likely regulatory settlements in the coming months could raise further doubts. Recent executive moves suggest Deutsche is keeping options open for strategy and leadership change.
Rampaging animal spirits birth biotech unicorn 18 Dec 2014 The public offering of Juno Therapeutics presents an apt finale to the best year for biotech IPOs. It’s only a year old and revenue free, but its cancer fighting technology is hot. Juno’s $2 bln valuation shows capitalism’s ability to catalyze investors’ hopes and resources.
Royal Mail points to lesser role for bookrunners 18 Dec 2014 Last year’s much criticised privatisation of the UK postal company did not go so badly after all, a report has found. But it still offers lessons for improving the process of IPO price discovery. Technology can help, as would bookrunners relaxing their grip on information flow.
James Gorman can leave Brian Moynihan in slow lane 18 Dec 2014 The Morgan Stanley and BofA CEOs each marks five years in charge in 2015. Neither has had an easy time of it. Gorman, though, ought to be able to lead his firm back above a 10 pct ROE – an important, if humdrum, ambition. Moynihan’s lending behemoth remains a ways off that.
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.