Goldman’s Mr. 25 Standard Deviation hard to follow 19 Sep 2012 Despite his wacky crisis characterization, David Viniar played a big role saving Goldman from the mortgage rout and is the rare banker to succeed in the CFO role. Losing him hurts even if replacement Harvey Schwartz is no slouch. Viniar’s guidance from the board will be welcome.
The letter Carlyle’s Bill Conway didn’t write 18 Sep 2012 Missives from the U.S. buyout firm’s co-founder are eagerly anticipated each year, especially after the early 2007 edition foresaw a credit crisis. Conway hasn’t produced one for 2012 - with Carlyle seemingly bullish on new investments - so Breakingviews has drafted it for him.
Ford understandably clings to its rock star CEO 13 Sep 2012 The carmaker seems reluctant to let go of Alan Mulally after he saved it from going bust. Naming him co-chairman would make for quirky governance and suggests the board doesn’t yet have full confidence in his successor. But keeping Mulally’s magic touch trumps these downsides.
Richest Brazilian is cheap now, probably later too 13 Sep 2012 Eike Batista scrapped a plan to delist his port firm LLX after a BofA appraisal said he should pay minority owners more than twice what he offered. The assessment used some of the billionaire’s own assumptions. But only a true believer should wait for the shares to rise that far.
Facebook’s stock slump could be self-reinforcing 12 Sep 2012 Founder Mark Zuckerberg now admits the social network’s IPO fiasco has hurt morale. No kidding. He hired nearly 60 pct of his 4,000 staff since the stock last traded as low as $18 a share on SecondMarket. That’s a lot of folks potentially poorer who thought they’d be rich by now.
Banker pay reform rests on ROE transparency 10 Sep 2012 Universal banks are still paying big bonuses, yet returns are commonly held to be inadequate. The logical reform is to judge whether return on equity exceeds the cost of equity, and only pay up if so. That would first need another seismic shift: transparency about both the R and the E.
Murdoch’s reformation stops with governance 5 Sep 2012 The media mogul has sensibly deployed capital as part of a big turnaround at News Corp since the phone-hacking scandal rocked his empire. But two new board nominees look like the old Murdoch at work. Investors shouldn’t so soon forget the havoc an unchecked emperor can wreak.
Facebook crystallizes blundered IPO with buyback 5 Sep 2012 Mark Zuckerberg’s social network will essentially cut its outstanding share count by 101 mln by promising to use cash, rather than stock, to settle a tax obligation. Buying back stock four months after an IPO at half price looks cynical. In this case it’s just incompetence.
Counterpoint: Gender quotas are a bad idea 5 Sep 2012 The EU’s justice commissioner means well, but her plan to make the non-executive side of boards 40 percent female is deeply flawed. The goal is doubtful, the technique is counterproductive and the precedent is dreadful. As often when it comes to sex, reason goes out the window.
Quotas for women directors are the way forward 5 Sep 2012 The EU is mulling a 40 pct mandatory quota for female directors. Success will depend on getting the regulation right. Tough sanctions are needed to force compliance, but the rules should articulate a longer-term plan. Hopefully mere threats will be enough to modify behaviour.
Apple may bury hatchet with Google – just not yet 31 Aug 2012 It’s no shock their chiefs are talking. The iPhone maker’s sweeping U.S. patent win over Samsung and its Google-run devices is a blow to the search giant too. But the rivals’ clashing business models make peace difficult. Apple may first try to push its legal edge a bit further.
Barclays’ new CEO will need to work doubly hard 30 Aug 2012 Retail chief Antony Jenkins is a welcome antidote to the UK bank’s gung-ho ex-boss Bob Diamond. But he still has to steer its powerful investment bank onto a more sustainable path. And it would have been easier for an outsider to make a break with Barclays’ past misdemeanours.
Outfoxed Bill Ackman tries to guard mall henhouse 27 Aug 2012 The hedge fund boss is upset at how Brookfield, a fellow owner of $19 bln GGP, raised its stake in the U.S. shopping center operator. But the tactics could have come out of Ackman’s own playbook. Even so, he’s on target in suggesting what GGP should do next.
News Corp’s UK tabloid exposes model weakness 24 Aug 2012 Britain’s best-selling newspaper has printed shots of Prince Harry in the buff. It also concedes that most readers will have seen the pictures on the internet, highlighting the main commercial problem facing the soon-to-be demerged News Corp newspapers. The Web.
Anglo finds satisfactory end to Chilean quarrel 23 Aug 2012 The London-listed miner has buried the hatchet with Codelco, selling Chile’s copper producer 25 pct of a disputed mine for $1.9 bln. Anglo American’s other problems will be harder to solve, but here CEO Cynthia Carroll can reasonably claim she’s protected shareholder value.
Carl Icahn gets a dose of his own tart medicine 22 Aug 2012 The uppity investor yanked his failed bid to buy the rest of CVR Energy. That leaves Icahn controlling a public company he can’t take private and wanted to sell - but couldn’t find a buyer. Now he has to deal with a group in some ways a bit like him: a stubborn minority.
UK shows white collar crime not so easily forgotten 20 Aug 2012 After 22 years, Asil Nadir has been found guilty of theft in the collapse of Polly Peck, a one-time London stock market darling he led. Those frustrated by the paucity of financial crisis convictions must be heartened to see the long arm of the law retaining muscle decades later.
Cisco’s attendance at fat camp pays off 16 Aug 2012 CEO John Chambers was forced to admit last year that the network giant’s quest for growth did little more than squander capital and leave it a bloated mess. Cisco has since shed excess weight and has just hiked its dividend. Now it needs to get fighting fit.
BBC’s Mark Thompson is odd choice as NY Times CEO 15 Aug 2012 The outgoing head of the UK’s largely state-funded broadcaster has run an outfit where revenue is mostly guaranteed - a far cry from the free-market challenges faced by the Times. But a taste for a fight with Rupert Murdoch may explain Thompson’s appeal to the Times’s owners.
Slippery witness gives Rajaratnam appeal traction 14 Aug 2012 Roomy Khan first ratted out the Galleon fraudster. But her lies are Exhibit A in another insider trading case. That boosts Raj’s claim that the U.S. government shouldn’t have wiretapped him based on her word. His appeal may give judges a chance to hold prosecutors accountable.