Breakingviews

Monster shouldn’t be Coke’s tipple of choice

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

Coca-Cola is more than a century old, but it wants to be hip. Even so, the company says it’s not about to buy energy-drink maker Monster Beverages, as a Wall Street Journal report suggested. That sounds mature – in a good way – even if Coke did leave the door open to build on its existing distribution relationship with Monster.

Sirius XM could yet reclaim the soul it sold

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

Sirius XM sold its soul and could pay a hefty price to retrieve it. When the U.S. satellite radio service stared down bankruptcy in 2009, it beat a rescue path to John Malone’s door at Liberty Media. For a financial lifeline, Sirius pledged a 40 percent stake and power over most big decisions to the wily cable magnate. But now he has come to collect.

Weak exports bring double whammy for Chinese banks

By Wei Gu

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

After posting record earnings in 2011, Chinese banks are facing a squeeze this year. Weak external demand hurts lending and weakens its asset quality. Deposits are harder to find, due to the decline in the automatic inflow from the shrinking trade surplus. Hit by poor external demand, losses are rising on loans to smaller businesses.

Samsung moves on from Japan to nibble at Apple

By Wayne Arnold

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

The Japanese may have pioneered the model of a vertically integrated electronics manufacturer, but Samsung looks to have perfected it. The Korean company started by pulling apart Japanese TV sets, then reverse-engineered the manufacturers’ business model. By avoiding their missteps, it’s driving them out of TVs and carving up the smartphone market with Apple. Now, as more business is coming from emerging markets, Apple needs to watch out for Samsung’s still-growing appetite.

Shareholder rage at bank pay reaches tipping point

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

Bank investors’ anger at bank pay is boiling over. Less than two weeks after a third of Citigroup shareholders threw the company’s remuneration report back in its face, shareholders at Barclays and Credit Suisse have done exactly the same. Reforms that now flow from what is a genuine “shareholder spring” could be far reaching.

Lazard investors getting two for the price of one

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

Lazard shareholders are getting two businesses for the price of one. The first-quarter results unveiled on Friday confirm what has become increasingly evident: asset management is its quiet powerhouse. Yet investors either give Lazard virtually no credit for it – or else negatively assess its high-profile advisory and M&A business. A Breakingviews sum-of-the-parts analysis suggests Lazard may be worth double its current $3.5 billion market value.

Chesapeake tangle goes far beyond CEO

By Christopher Swann and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.Questions about Chesapeake Energy go beyond its chief executive’s dubious dealings. Aubrey McClendon’s personal stakes in oil and gas projects and the extent of related disclosure have put the $12 billion U.S. energy giant on the back foot and tied its board in knots. But investors should also be wary of the company’s monstrous complexity. It has convoluted off-balance sheet liabilities thanks to convoluted partnerships; hedging gains have dwarfed profit since 2006; and cash flow is consistently negative.

Chesapeake, the nation’s second-largest gas producer, has become its own worst enemy. Revelations that McClendon, the company’s flamboyant co-founder, failed to disclose $1.1 billion of personal borrowing to co-invest in wells with the company have raised the specter of serious conflicts of interest and shaken investors. The company originally said its board was “fully” aware of the CEO’s financing transactions, but on Thursday said the directors were only “generally” aware and moved to end the co-investment program – which U.S. regulators are now scrutinizing.

It’s too soon to be doubting Apple

By Robert Cyran

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

It’s too soon to be doubting Apple. Fears over a slowing U.S. smartphone market and chip problems sent investors scurrying in April, when the company’s shares tumbled by over 10 percent. But the iPad maker smashed expectations yet again, almost doubling profit in the latest quarter. The trends powering Apple – China, rising margins and the halo effect – still have legs.

Spotify’s $4 billion pitch sounds high

By Quentin Webb

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

Spotify’s pitch to prospective shareholders looks ambitious. The online music-streaming firm boasts rapid growth and a popular friend in Facebook. But it lacks the economics of the best dot-com hits.

Space mining plan more than just sci-fi fantasy

By Kevin Allison

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

Shady corporation sends robot army into space to mine precious metals from asteroids. That’s the basic setup of Blade Runner, the sci-fi epic that hit cinemas 30 years ago this June. It’s also the business plan for Planetary Resources, a U.S. startup that has outlined its strategy to take the mining industry into near-Earth orbit. The economics look challenging, to say the least. But the idea is not completely bonkers.