Breakingviews

Buyout barons like the sound of a blank check

September 2, 2015

David Bonderman’s TPG and Alec Gores’ eponymous firm are the latest to jump on the shell-company bandwagon. A cutthroat M&A scene and the success enjoyed by the likes of Martin Franklin have amplified the siren call. Not all acquisition nous is necessarily the same, however.

Why oil investors are so behind the curve

September 2, 2015

Investors used to assume that the cost of pulling oil out of the ground was relatively static – or changed slowly. Reality is slipperier. Rethinking the way the “cost curve” works may help explain recent gyrations in oil and other commodity markets.

LVMH’s bite out of Apple is digital coming-of-age

September 2, 2015

The French luxury group has poached a top Apple music executive to head its online operations. It’s a significant move in a sector that has been wary of the net. It also cranks up the heat on the sector’s e-commerce leader Burberry and recently merged Yoox/Net-a-Porter.

India beats timely retreat from fiscal tyranny

September 2, 2015

The finance minister has retracted a flawed plan to tax foreign fund managers’ past earnings. Jittery global markets may have hastened the truce. Settling similar disputes with Vodafone and Cairn would show the government is belatedly keeping its promise to end “tax terrorism”.

Hedge fund wobbles hand ammunition to fee fighters

September 1, 2015

Big names from Greenlight to Pershing to Third Point have taken a pounding from recent market turmoil. It’s just a month’s bad performance. But if high-priced managers can’t provide a hedge to regular investments, it lends extra weight to Calpers and others who are ditching them.

Migration crisis echoes age-old test of finance

September 1, 2015

The flow of desperate people to Europe has a financial-world parallel. For companies, high returns attract new entrants who threaten incumbents’ comfortable state. The options for EU leaders are similar too: shut out competition, or find new, better ways to create profit.

Focus Media relisting defies China’s market rout

September 1, 2015

The advertising group is trying to list again in Shenzhen after a previous attempt in June fell through. But despite the stock market slump, Focus Media’s $7.2 bln valuation is unchanged. Other U.S.-listed companies eyeing a return to the mainland may need to be more realistic.

Silicon Valley rule of thumb points right way

By Guest Contributor
August 31, 2015

In a land that fetishizes revenue growth over profitability, there’s a new sanity check for software firms to see if the two rates add up to at least 40 pct. A Breakingviews analysis suggests it can be a useful guideline. Investors should just be wary of extrapolating too much.

Hugo Dixon: Greek election may reopen can of worms

By Hugo Dixon
August 31, 2015

Given that no party is likely to emerge from next month’s vote with a majority, it may be hard to form a strong government that can implement the country’s new bailout deal. There’s even a risk that there will be yet more elections. That could tip Greece back into crisis.

Slowing growth exposes Chinese banks’ debt debris

August 31, 2015

Dodgy credits on the balance sheets of China’s four biggest lenders rose 28 pct in the first half of the year – much faster than the banks replenished provisions. Though overall bad debt levels remain low, continued deterioration threatens to reverse years of profit growth.