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.
No quick fix for banks’ U.S. mortgage liability 12 Sep 2011 That’s the grim reality for investors. The entire home-lending chain - origination, servicing and securitization - is under legal fire, with a regulator aiming the latest shot at 17 banks. Settlements will help, but as this primer illustrates, a full ceasefire may be years away.
Google’s Zagat purchase looks cheap and cheerful 9 Sep 2011 The restaurant reviewer’s brand is well regarded, but its model of selling user-generated content had little future in a post-Yelp world. Google can integrate Zagat reviews with its maps, social network, and other services and sell related ads. This deal should score highly.
Dr. Obama prescribes another big dose of stimulus 9 Sep 2011 The president’s $447 bln jobs plan should please the Fed’s Bernanke and IMF’s Lagarde. Both have suggested putting stimulus ahead of austerity. Republicans may be less thrilled. But the tax cuts may pass Congress. Expect Wall Street to start boosting 2012 U.S. growth forecasts.
Gold spares lagging Paulson after August ructions 8 Sep 2011 The hedgie’s best-known fund is down 23 pct this year, but holders of gold-denominated shares are still just ahead. At Ray Dalio’s giant Bridgewater, investors are up 25 pct even without that help. If nothing else, the contrast underlines the challenge of navigating wild markets.
Jingdong IPO tests U.S. appetite for China stocks 8 Sep 2011 The Amazon lookalike, unknown outside China, hopes to raise up to $5 billion in a U.S. listing. Jingdong’s scale and growth speed are exciting. But rising doubts about Chinese Internet darlings will test demand. It is a bold bet in a tough market.
China’s hidden debt undermines its sermons 8 Sep 2011 The government’s stated debt is just 15 percent of GDP. But a gaping pension hole and heavy borrowing by state-backed entities could leave Beijing on the hook for debts closer to 130 percent of GDP. That makes China’s preaching over profligate American ways ring a bit hollow.
Ohio oil promises new bonanza for Texas bankers 7 Sep 2011 The first takeover deal in the Utica shale may be modest, but it’s only a start. Some $38 bln of shale-related deals this year account for 80 pct of U.S. exploration M&A. If Ohio’s rock formation yields even half its touted oil trove, energy financiers should be sitting pretty.
Legal surrender hurts SEC more than shareholders 7 Sep 2011 The U.S. regulator won’t appeal a ruling that blocked more investor power to challenge corporate boards. That’s understandable given the legal risks and alternative proxy options. But it preserves a precedent that makes it far more arduous for the agency to implement new rules.
Facebook puts Web 2.0 rivals in appropriate light 7 Sep 2011 Tech companies like Demand Media and Pandora have shown how investors can take a shine to profitless growth. But Groupon’s troubles partly show how fickle such approval can be. Facebook’s fast-growing bottom line is a stark reminder of exactly what’s missing from Silicon Valley.
Goldman Sachs should consider its own breakup 7 Sep 2011 The Wall Street firm helps companies like Kraft boost their shares by splintering into pieces. So it’s logical that some inside Goldman have run the numbers on their employer. Should Goldman’s stock price linger below book value for long, a breakup could be hard to resist.
Romney’s only new economic idea is a bad one 7 Sep 2011 The GOP presidential hopeful unveiled a 160-page blueprint to cut taxes and costs. But it’s largely a rehash of his 2008 ideas, and it’s hard to find the fingerprints of his elite economic team. Indeed, they probably frowned on the big new concept: an anti-China trade policy.
Uncle Sam can’t play China’s solar subsidy game 7 Sep 2011 The bankruptcy of Solyndra undermines a U.S. loan guarantee scheme that backed $535 mln of the firm’s debt. Going head-to-head against China on solar panel production is pure folly. A wiser use of tax dollars would be to try and leapfrog the Middle Kingdom on research.
Toothless U.S. say-on-pay still biting CEO perks 7 Sep 2011 The SEC’s mandated votes may be non-binding, but they’re no bust. Though shareholders approved almost all executive pay packages in the recent proxy season, many firms preemptively cut golden parachutes to ensure victory. Investors are speaking softly but carrying a big stick.
Rubenstein won’t easily snatch Schwarzman’s crown 7 Sep 2011 The Carlyle and Blackstone private equity powerhouses both manage about $150 bln of assets. But Carlyle has less steady fee income. If investors looking at Carlyle’s new IPO filing value the firm the same way as Blackstone, it would be worth only about $7.5 bln, or half as much.
New Yahoo CEO challenge: to dismantle the beast 7 Sep 2011 Fixing the $16 bln Internet firm is proving tough thanks to its many dysfunctions. Firing Carol Bartz looks a step forward, even if the hapless board did so in characteristically shambolic fashion. A breakup is probably needed, but may be hard with the founders calling the shots.
AT&T bet on T-Mobile puts CEO, board in crosshairs 6 Sep 2011 The U.S. telco has wagered $6 bln that it can beat regulatory opposition and buy T-Mobile USA. The net benefit of the $39 bln purchase could be in the same ballpark. But few experts thought the odds were better than 50-50. The AT&T boss and directors may have made a poor call.