United States of America

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.

Buyout bosses lose another layer of their mystique

5 Sep 2012

New York is probing a complex technique used by private equity to pay less tax on fee income. Even if legal, it’s more engineering. And it’s mainly aimed at enriching fund firms and their people, not investors. It makes claims of investing and management mojo less convincing.

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.

BP’s path to Macondo settlement just got harder

5 Sep 2012

U.S. lawyers say they’ve got emails showing gross negligence in the 2010 oil spill disaster. There’s still scope to settle before a trial, but the aggressive tack complicates BP’s effort to get a favourable deal. The market reaction - wiping $5 bln off BP’s value - looks right.

U.S. debt relief for Egypt is mostly politics

5 Sep 2012

Obama’s decision to write off $1 bln owed to the U.S. by Egypt will help to keep the country on the safe side of American politics in the region more than it will help the country’s troubled economy. A bigger boost would be to redirect military aid to more productive investment.

Pandora could be a Facebook friend with benefits

4 Sep 2012

The $2 bln internet radio service revealed steady strides in mobile advertising, which accounted for over half its revenue last quarter. Facebook, meanwhile, delivered fewer ads to users socializing by phone. That makes Pandora look an enticing, if pricey, companion to target.

Open courts healthy for Delaware and dealmakers

4 Sep 2012

A U.S. judge said the state’s jurists can’t arbitrate disputes in secret. That may disappoint shy companies, but it ensures the Fortune 500’s preferred legal forum remains accountable. The M&A world can also depend on continued access to helpful - and sometimes witty - rulings.

Sun Myung Moon was a sort of business success

4 Sep 2012

True, his Unification Church’s commercial operations made large losses and ran up huge debts. But even with weak operating management, the church’s knack for religious services was outstanding. Moon’s followers provided more than enough donations to repeatedly bail out disasters.

Three-edged blade sharpens case for carve-ups

4 Sep 2012

In a 48-hour span, shares in U.S. government contractor SAIC got a lift from a decision to split the company; DuPont unloaded a slow-growing unit for a good price; and a new study found value creation from divestitures. The fresh evidence should grab the attention of more boards.

Valeant deal shows how big M&A can add value

4 Sep 2012

Large acquisitions usually merit skepticism. Valeant’s $2.6 bln deal for Medicis looks an exception. The Canadian-U.S. drug maker is paying a $700 mln-plus premium for its rival, but cost cuts could be worth more than twice that. And the fit is good. No wonder both stocks surged.

Investors need steel to endure next market phase

4 Sep 2012

Global equities had a good summer. Many indexes are ahead 10 percent since early June. Optimism has also showed in shifting bond yields. The world still has serious problems, and near-term reversals are possible. But asset allocators should hold their nerve.

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.

U.S. political prattle gives markets just a morsel

31 Aug 2012

The Republican powwow boiled down to a pep rally for Mitt Romney, not an occasion to unveil platform specifics. Expect similar vagueness from the Democrats next week. Investors needn’t fret, though. Rhetoric will reign until debates force candidates to flesh out detailed plans.

Put Dylan’s tangled bond in the credit watchtower

31 Aug 2012

Goldman Sachs is said to be working on a tiered bond secured on Bob Dylan royalties. Investors’ blood may run for the freewheelin’ early tracks. Modern times material may be attractive too. But the street rocking 1980s stuff could leave junior creditors blowing in the wind.

New rules help Citi get off easy in CDO payout

30 Aug 2012

The bank’s $590 mln settlement with shareholders seems big, but it’s modest next to sums extracted in past scandals. One reason is courts have recently made it tougher for investors to sue. That may shield some financial rogues, but it helps ensure only true victims get paid.

Does a Wall Street M&A addict ever retire?

30 Aug 2012

Eric Gleacher, a veteran of the landmark RJR and Revlon buyouts, may sell his eponymous advisory firm - again. The former Lehman and Morgan Stanley mergers boss has sold and bought it before. At 72, an exit could be his swansong. Or maybe Gleacher just lives for doing deals.

Captain Austerity lurks in shadows of GOP fiesta

30 Aug 2012

Nobody is uttering the A-word from the podium of the Republican convention in Tampa. But between the lines of speeches and in private conversations there’s little doubt that European-style belt-tightening will be required for Romney to fulfil his promise of fixing America’s finances.

GOP should be careful what it wishes for with Fed

29 Aug 2012

“Bye bye Bernanke” is one rallying cry at this week’s Republican convention. It’s a good sound-bite, but it comes over as an attack on the U.S. central bank’s cherished independence. A more constructive tactic would be to outline how the GOP thinks the Fed should be constrained.

Ex-FBI boss may land on GOP most-wanted list

29 Aug 2012

Louis Freeh, who has led high-profile probes at MF Global and Penn State, is merging his law firm with a bigger shop. It makes business sense and the timing looks opportune. Though it may be coincidence, Freeh would enhance the law-and-order chops of a Romney administration.

Uniting fractured GOP on finances could be winner

28 Aug 2012

In a tight election, a divided Republican party won’t beat President Obama. His opponent, Mitt Romney, must bring together old-school conservatives, Austrian economists, Bible beaters and tea partiers by focusing on common ground: repairing Uncle Sam’s balance sheet.