Breakingviews

Coty’s freshened offer hard for Avon to resist

By Agnes T. Crane

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Coty is making its advances harder for Avon Products to resist. The European fragrance maker has given the down-in-the-dumps U.S. makeup firm until Monday to engage in discussions. But Coty has raised its offer to $10.7 billion, added Warren Buffett’s cash and blessing, and hinted at the possibility of a still higher price – while Avon is, if anything, looking weaker.

Boardroom botches call for checklist fix

By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

If checklists can save lives, surely they can help shareholders. The scandals at Yahoo, Green Mountain Coffee, Chesapeake Energy and other U.S. companies suggest boards of directors could do with some simple reminders to prevent them from making stupid mistakes. Breakingviews has drawn up a starter set.

Boardroom gamblers roasted by their own hubris

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Someone should have told Robert Stiller and William Davis to wake up and smell the coffee. The top two board members of cup-of-Joe maker Green Mountain were removed from their posts on Tuesday by their fellow directors after having to sell stock in the company during a quiet period to meet margin calls. The fate of Stiller, the company’s founder and chairman, and Davis, its lead independent director, should serve as a lesson to all.

Facebook reality tops out near bottom of IPO range

By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Facebook founder Mark Zuckerberg appears a bit sheepish about touting the company’s initial public offering. He probably doesn’t need to be. The hype around the social network makes it likely the price will go above the indicated $28-to-$35 a share range, which values the company at up to $96 billion. But an update of Breakingviews’ discounted cashflow calculator for Facebook shows that sanity is still at the low end of the valuation scale.

When shareholder democracy trumps the real thing

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. This column appears in the May 14 issue of Newsweek.

It’s worrying to think that shareholder democracy is needed to rectify shortcomings of the real thing. Yet this week two of the nation’s biggest corporations will give their investors precisely that opportunity. Motions on the ballots at the annual meetings of Bank of America and 3M will effectively act as referendums on the U.S. Supreme Court’s flawed decision in the Citizens United case to effectively hand companies the same freedoms of speech accorded to people. Happily, supporting proposals to restrict the use of corporate money in politics isn’t just good for democracy, it is good business.

Buffett Rule divides Berkshire Hathaway faithful

By Agnes T. Crane 

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Warren Buffett has built a career on finding value. And insurance-focused Berkshire Hathaway excels at calculated risks. But the ideological divide over a politically charged tax plan with Buffett’s name on it that marred Saturday’s annual shareholder love-fest this year suggests a temporary lapse when it comes to those two virtues. The Buffett Rule may be an unexpected liability for Berkshire.

Dependence on Facebook spreads beyond its users

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Dependence on Facebook spreads far and deep. It’s not just social networking junkies that have grown reliant on Mark Zuckerberg’s website creation, which on Thursday filed a new version of the prospectus for its impending initial public offering. Businesses such as online gamer Zynga have been created on its back. Bankers are pegging their careers on floating the firm. And the state of California needs the IPO to help close its yawning budget gap.

Apple’s valuation isn’t at risk any time soon

By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

At about $550 billion, Apple’s market capitalization is mind-boggling. But for a company growing as quickly as it is, the iPhone maker trades at an absurdly low 12 times forecast earnings for the year to September. A new Breakingviews calculator shows why even cautious shareholders shouldn’t worry: even if growth and margins decline improbably fast, Apple should still be worth far more in 2016.

China’s stock reforms should benefit brokers most

By Wei Gu

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

China’s stock market is reforming fast, but investors hoping for higher stock prices may be disappointed. New chief securities regulator Guo Shuqing took office just half a year ago, but has already brought in a slew of new rules. The latest is to lower trading fees. The aim may be to pep up valuations across the market, but the biggest beneficiaries are likely to be China’s brokerage firms.

Nerds may get revenge on Woodstock of Capitalism

By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

This year’s Woodstock of Capitalism could turn into the revenge of the nerds. For the first time in the history of the closely watched annual gathering of Berkshire Hathaway shareholders, financial analysts have been invited to pepper Warren Buffett with questions in front of the 35,000 or so who will gather for the event. It’s the latest sign that times may be a-changin’ for the company.