Oct 4, 2012 04:11 UTC

Indonesia may be unfairly tarred by Bumi’s brush

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By Wayne Arnold

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

Bumi Resources is not a metaphor for Indonesia. The heavily indebted coal miner, currently at the centre of a financial probe and corporate governance spat, has said it may have to sell assets or shares. With coal prices weak, the drama at Bumi Resources spells more trouble for creditors and shareholders, including those of its London-listed parent. Indonesia must hope it is not unfairly tarred by the association.

COMMENT

“On a side note, I would be curious as to what exactly has incented the writer to express this opinion, as it is unusual to see someone rise up to defend an emerging market economy.”

Could it be because the article is correct and the man that is ultimately responsible for the Bumi PLC fiasco is also pushing to be on the presidential ballot in 2014?

Posted by Rob-in-Jakarta | Report as abusive
Jul 26, 2012 18:29 UTC

M&A Davids wallop Wall Street Goliaths

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

Size used to matter in M&A. That’s no longer the case. Dealmaking Davids are walloping the Goliaths. 

Jun 13, 2012 18:27 UTC

Man Utd’s IPO transfer keeps owners in control

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

Manchester United’s IPO transfer will keep the Glazer family firmly in control. For months, the owners of the English soccer club had sought a $1 billion initial public offering in Singapore. Now the plan has switched to a U.S. listing, reports IFR. New York doesn’t seem like the natural venue for a soccer share sale. But it’s plausible the deal will still fly, and the lop-sided governance in plan A remains.

Jun 12, 2012 19:58 UTC

Jamie Dimon should come out swinging in Senate

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

Which Jamie Dimon will appear before the Senate Banking Committee in Washington on Wednesday? The self-effacing JPMorgan boss offering apologies for his bank losing at least $2 billion on bum trades? Or the combative JPMorgan leader who just a year ago publicly challenged the chairman of the Federal Reserve over regulation? It would be best if the latter shows up.

COMMENT

Mr. Cox, your premise that JP Morgan only has to answer to its shareholders assumes 1) shareholders have any power over Morgan’s leadership, 2) JP Morgan isn’t relying on tax payer institutions to back up its risky trades (FDIC, FED, etc.), 3) that derivative trading losses are just a bank taking risk. All 3 premises are completely false.

As we know, JP MOrgan’s acquisition of Bear Stearns relied 100% on the back of the US Treasury; shareholders in today’s corporation have NO say, unless you own a block of 10% or more; and derivative trading is not banking, it is gambling. However, at least most good gamblers understand and know their odds. Jamie’s lieutenants obviously don’t.

What is remarkable is how JP MOrgan’s board has been absolutely mum on Dimon’s leadership lapse. And the board is there to protect the shareholders’ interest. Not here.

And Dimon’s premise that the regs against prop trading will kill bank profitability now ring very hallow, and US Bankcrop has shown us all how traditional banking can work and payoff shareholders very well.

Posted by Acetracy | Report as abusive
Jun 11, 2012 20:11 UTC

JPMorgan should consider whale of a bonus

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

JPMorgan should consider a whale of a bonus. Not a Shamu-size payout, but rather one referencing the London trader with the marine mammal moniker who is at the center of at least $2 billion of trading losses from the bank’s chief investment office.

Jun 11, 2012 20:07 UTC

Groupon now needs to dig more than build

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By Rob Cox
This column appears in the June 11 issue of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Groupon founder Andrew Mason has built a castle. His internet coupon empire will harvest some $2.4 billion in sales this year thanks to rapid growth in its wittily-worded email offers for discount pole-dancing lessons and two-for-one chicken parmesans. Mason’s next trick needs to be digging a moat around his business. That’s arguably tougher, and means being more like online restaurant booking outfit OpenTable – or buying it.

Jun 11, 2012 02:05 UTC

UK bosses play dangerous game: pay me or fire me

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By Christopher Hughes 

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

The O-word is causing friction between UK bosses and shareholders. Martin Sorrell says he was wounded by a shareholder who said the chief executive of advertising group WPP he had been behaving “as an owner”. Ivan Glasenberg, Sorrell’s counterpart at commodity trader Glencore, has come to his aid, saying it is hard to get a CEO to be entrepreneurial if they didn’t own a lot of stock.

COMMENT

I have worked both in industry and in brokerage, so understand both sides of the argument.

Wearing my industry hat, I would say that shareholders are just that, holders of shares. They are not owners and are not in it for the long term, but instead are there merely for as long as it takes to get a return. A reality.

Should this short-term oriented group – the majority of which have never and will never run a business – therefore control the remuneration of a CEO that has been there since the start and will probably be there until his end?

In a real sense, the only right a shareholder has is to buy or sell his shares, to vote with his feet.

Let us also not forget that the issue in question, the CEO’s remuneration, is unlikely to have a significant effect per se on the share price, which is the NPV of all future cash flows. This is therefore not really an issue of shareholder value.

However, shareholders do have an influence and, as you say, a decision was taken to go public and so to expose oneself to that environment.

Management may think that it is unfair that investors have a say over such things. In the end, however, it is management’s responsibility to communicate effectively with the investment community, and in a way that shows that the company takes shareholders seriously – not because the poor chaps might feel that they are being held for ransom, but because that is how the system works, for good or bad. Also, therefore, a reality.

(Oh dear, I have probably alienated both sides now!)

Posted by Amoroso | Report as abusive
Jun 8, 2012 20:02 UTC

Chesapeake gets pistol-whipping from shareholders

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By Robert Cyran and Christopher Swann

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Chesapeake Energy has gotten a pistol-whipping from shareholders. The besieged U.S. gas giant’s owners voted overwhelmingly against directors who were up for re-election and the board’s executive pay plan, while favoring a slew of investor proposals to improve Chesapeake’s governance. It’s hard to see how boss Aubrey McClendon can keep running this circus.

Jun 8, 2012 13:00 UTC
Guest Contributor

Lululemon’s downward dog gnaws at yoga bubble

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By Megan Miller  

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

Did Lululemon’s downward dog just take a bite out of the yoga bubble? The $9 billion producer of pricey sweatpants and other athletic apparel rattled investors’ chakras by warning of slowing sales and profit growth. Yoga may still be one of the fastest-growing exercise practices in the world, but Lululemon’s stretched valuation is predicated more on fashion than the proliferation of yogi practitioners.

Jun 7, 2012 21:20 UTC

Nasdaq pours gasoline on Facebook fire

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

Nasdaq boss Bob Greifeld needed to find a salve for brokers singed by his exchange’s botch-job on Facebook’s market debut. The technological meltdown on the day of the initial public offering last month may have cost clients as much as $200 million. Instead, Greifeld fanned the flames.