Closed-door justice will leave dealmakers in dark 19 Oct 2011 A spat between Skyworks and takeover target Advanced Analogic will play out in private instead of open court under Delaware’s new arbitration system. That may save the parties time and money. But it cheats the M&A world - and investors - of valuable legal guidance.
Morgan Stanley makes best of turbulent time 19 Oct 2011 The bank’s $100 mln Q3 profit after accounting funnies might not look like much. But it beats Goldman. Also, Morgan Stanley’s traders outperformed rivals, the brokerage held its own and more details on European risks should calm nerves. CEO Gorman’s plan may be starting to gel.
Inflation may join jobs in 2012 presidential race 19 Oct 2011 On its own, a 3.9 pct annual rise in U.S. CPI won’t raise big inflation fears. But M2 data suggests price rises will accelerate further. If so, by next summer CPI increases could potentially hit red-zone levels. That would inject inflation, and Fed policy, into the electoral mix.
Abbott prescribes a dose of financial engineering 19 Oct 2011 The runaway success of blockbuster drug Humira has been a mixed blessing. It larded the healthcare group’s attractive nutrition and generic drug businesses with a pedestrian Big Pharma multiple. Splitting off its research drug arm should rectify the valuation mismatch.
Occupy Wall Street is poor vessel for discontent 19 Oct 2011 The protesters may be channelling justified public anger against high finance, but they are too intellectually incoherent to start any sort of revolution. Edward Hadas suggests the mourning over Apple’s Steve Jobs is a better cultural indicator than the Wall Street movement.
Apple’s rare letdown looks more form than function 18 Oct 2011 The firm known for perfectly marrying technology with design usually manages the same élan with its finances. Under Steve Jobs, Apple blew by forecasts. The latest results, without him, missed. But there’s still plenty of value substance beyond issues of Wall Street style.
Free trade unlikely to help end U.S. jobs crisis 18 Oct 2011 The Obama administration is on a free trade roll; it’s pushing for new deals with Vietnam and Malaysia. But for rich America, freer trade with poor countries creates few new jobs. It may also exacerbate something its citizens are growing to hate: inequality.
Goldman’s loss far less worrying than it appears 18 Oct 2011 Diving into the red is rare for the Wall Street firm and confirms Goldman is losing some luster. But despite these challenges, its investment banking and trading ops held up relatively well. The pain was in private equity. Yet even that reassures the firm takes its lumps quickly.
Bank of America suffers worst of both worlds 18 Oct 2011 Forget the reported $6.2 bln profit. Both the commercial bank and the Wall Street operations fared worse than rivals in the third quarter. Even a very low tax rate couldn’t help. Strip out the accounting funnies and the CCB sale gain and BofA lost money again.
Through adversity, Goldman still plays all angles 17 Oct 2011 The $38 bln Kinder Morgan deal epitomizes what the bank does best. It owns a stake in the pipeline operator, underwrote its IPO and worked with its takeover target, El Paso. Such finesse is what sets Goldman apart. It’s just not clear it’s a gift that will keep on giving.
Wells Fargo’s premium suffers justifiable hit 17 Oct 2011 Its record $4.1 bln Q3 earnings barely missed estimates. But revenue slipped, too. Returns just beat the cost of capital and a struggling American economy won’t help the U.S.-centric bank. That makes it harder to rationalize Wells trading much above rivals, or its own book value.
Hulu owners destined to be regretful refuseniks 17 Oct 2011 Disney, News Corp and Providence pulled the plug on the video streaming service’s auction after bids were too cheap and conditional. But the media giants have struggled with their own digital transitions. Hulu is likely to become a distracting headache they’ll wish they’d exited.
Citi gets the jitters in emerging markets 17 Oct 2011 Fears of another recession already have hammered the bank’s shares. Now, Citi is slowing lending in developing countries, one of its fastest-growing businesses. With reserve releases slowing and Citi’s ROE just 3 pct after one-offs, it’s another obstacle to a banking recovery.
Kinder pays top dollar to enter energy big league 17 Oct 2011 If regulators give the nod, a new $94 bln pipeline titan will be born, becoming among the biggest U.S. energy firms. Kinder is paying more than is justified by the synergies for El Paso. But Kinder’s chief has done investors proud in the past and is not to be underestimated.
Goldman Sachs’s exceptionalism takes another knock 14 Oct 2011 Shares of the Wall Street firm briefly traded at a bigger discount to book value than JPMorgan. That rarely happens and is a worrisome sign that investors fear the firm’s franchise, not just trading but serving clients, has been irrevocably damaged. Goldman is now just ordinary.
Latest MAC attack hints at bigger M&A trouble spot 14 Oct 2011 After crying “material adverse change,” buyout firm Cerberus is close to landing Innkeepers for less than first agreed. The broad MAC in this bankruptcy deal may not reflect market reality. But sellers still have work to do ensuring buyers know the price of trying to walk.
Republican frontrunner’s glory should be fleeting 14 Oct 2011 The buzz around Herman Cain’s tax plan helped move him to the top of some polls. But on closer inspection, his 9-9-9 scheme is highly regressive and unattractive to nearly all. Cain’s questionable political and business credentials also imply this heyday will be short-lived.
Google investors "like" mobile and social results 14 Oct 2011 The Internet giant’s dazzling earnings report, showing adjusted sales up 37 pct, brought an after-hours share price jump. In mobile search, Google is making inroads the numbers don’t yet show, and its social network is gathering steam. But grappling with Facebook will be tough.
Opportunity knocks for U.S. gas exporters 13 Oct 2011 With natural gas four times dearer in Asia than America, U.S. producers will be tempted to export. But the price difference must endure to justify the infrastructure investments needed. Still, rising global demand and booming U.S. drilling mean the numbers might now stack up.
Imagine if Merrill had been smart like Goldman 13 Oct 2011 That’s the basic conceit behind the latest film to emerge in the financial crisis genre, “Margin Call.” Kevin Spacey stars as the head of a desk overloaded with MBS about to blow that his boss forces him to unload to unwitting buyers. It’s simplistic, but eerily familiar.