Ackman’s gamble on Hong Kong unlikely to pay 16 Sep 2011 The activist fund manager is betting Hong Kong will re-peg its currency higher against the dollar. That may make sense given divergent economies, but could hurt the city’s competitiveness and do little to combat inflation. Bets like Ackman’s only encourage authorities to dig in.
Morgan Stanley misses a trick on Mack succession 15 Sep 2011 The chairman’s departure isn’t a terrible thing. But adding his duties to CEO James Gorman’s already full slate is unfortunate when investors haven’t fully embraced his strategy. It also frees other banks to unify the roles and legitimizes the status quo at Goldman. Too bad.
Frac Tech’s sellers need a racy valuation in IPO 15 Sep 2011 The U.S. fracking specialist’s debut was delayed in May by a buyout. Now it’s coming back to market. The new owners will want an equity valuation above the $3.5 bln they paid. That may be rich for a firm that, while growing swiftly, remains vulnerable to a supply glut.
Solyndra debacle reveals poor means to policy end 14 Sep 2011 The U.S. solar firm’s bankruptcy shows how poor risk assessment and crony capitalism undercut government loan guarantee programs. Germany’s mandated 20-year fixed-rate contracts for clean energy work better. They shrink the state’s role picking winners and maximize market forces.
Hostile bidder tries for poison-pill knockout 14 Sep 2011 The takeover defense was left on the ropes when a Delaware judge reluctantly allowed Airgas to fend off an unwanted suitor. Omnicare, smelling blood, is going back to the court to challenge PharMerica’s recalcitrance. But patience may work better than aggression in this fight.
When Frank Quattrone comes calling, buyer beware 14 Sep 2011 The latest coup for the former CSFB ace is persuading Google to bid against itself for Motorola Mobility. Since launching his boutique a few years ago, Quattrone has extracted nearly twice the premium for clients as rival tech bankers. Silicon Valley now has fair warning.
Petrobras should choose its own business partners 14 Sep 2011 Offering 40 pct of a new Brazilian refinery to Venezuela’s state oil group seemed politically smart in March 2008. But PDVSA’s cash is not forthcoming, so Petrobras is on the hook. It has the money, so there’s no big loss - just a warning against deals inspired by Brasilia.
JPMorgan hit may scare more bankers than investors 13 Sep 2011 Shareholders already figured Wall Street profit would take a dive, explaining why they shrugged off a warning from JPMorgan that investment banking revenue would dip by a third or more in Q3. But it lends more weight to industry-wide fears that job cuts will probably keep coming.
GE payback of Buffett reflects climb from crisis 13 Sep 2011 Like clockwork, the industrial giant notified the Sage of Omaha on Tuesday of its intention to buy back the $3 bln of preferred stock he bought at the height of the 2008 panic. Amid widespread market pessimism, it’s a reminder of how much stronger GE and the system have become.
Early start on mobile ads brings hope for Pandora 13 Sep 2011 The Internet radio service is growing by leaps, but giants such as Clear Channel have now entered the fray with similar offerings. That isn’t good for a company still losing money. But being out in front of the trend toward mobile advertising is still an opportunity for Pandora.
Regulatory overload one cause of U.S. malaise 13 Sep 2011 JPMorgan’s CEO thinks new financial red tape is slowing the recovery, and Obama just blocked an emissions rule on a similar rationale. A flood of regulation coincided with a plunge in productivity from 1973. The recent U.S. rulemaking surge may be part of today’s economic woe.
Grim Guatemala is demographic, security nightmare 13 Sep 2011 The two leading candidates in the Central American country’s election offer reasonable economic policies and small government. But with population growth nearly double Mexico’s, combined with poor literacy and a security problem, making the economy work properly will be tough.
Buffett’s new wannabe doesn’t have money problems 13 Sep 2011 He coughed up more than $5 mln just to have lunch with the Berkshire boss twice. That could be as important as his impressive track record as an investor. The Sokol affair proves that good instincts for making money aren’t the only thing Berkshire needs to succeed.
BofA boss can take comfort from Pandit’s bad patch 12 Sep 2011 Brian Moynihan gets knocked for everything from his fixes for the ailing bank to a lack of charisma - as his rival atop Citi did a couple of years ago. Pandit pulled through. That, and middling shareholder support for his latest plans, should give Moynihan a modicum of hope.
Rivals may learn from McGraw-Hill’s education spin 12 Sep 2011 The carve-up is long overdue as Standard & Poor’s never fit well with textbooks and teaching materials. Spinning off education could make it easier to sell. It should also turn up the heat at the likes of Pearson and Washington Post to consider similar breakups.
Broadcom chip deal has tech rarity: logical price 12 Sep 2011 The network chip maker is paying a huge 57 pct premium for NetLogic. But the $3.7 bln deal’s rationale is sound, and the price is reasonable considering NetLogic’s prospects. With tech valuations subdued, other companies with cash hoards may find it’s a good time to go shopping.
Forget the IPO, Facebook could reverse into Yahoo 12 Sep 2011 Offering Facebook shares to Yahoo owners sounds downright barmy. But Yahoo’s core is just a bunch of apps with a decent display ad business that belong in a social network. Facebook has the traffic, vision and possibly management in Sheryl Sandberg to exploit the assets.
Dimon can’t have it both ways 12 Sep 2011 The JPMorgan boss has made good arguments against bad regulation. But suggesting the U.S. should opt out of “anti-American” Basel III rules undermines his case. If huge private sector banks are to avoid future government rescues, they will need to hold more capital.
New U.S. patent law whiffs on system’s top flaws 12 Sep 2011 The measure may discourage dodgy filings and square American rules with those abroad. But it hurts small inventors and fails to curb vague and overlapping patents. It’s a blown chance for real reform and probably means more infringement fights for the likes of Google and Apple.
One piece of Obama’s jobs bill looks stimulating 12 Sep 2011 Paying for the president’s $447 bln plan could risk crowding out other activity, causing job losses rather than gains. But the proposed cut in employer payroll taxes would cheapen labor and may create jobs. That’s a piece of the puzzle Congress should support and even extend.