Nov 30, 2012 19:24 UTC

Groupon discounts dual-class share structures


By Robert Cyran

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

Groupon’s melodrama is discounting dual-class share structures. Chief Executive Andrew Mason and Chairman Eric Lefkofsky appear locked in a dysfunctional battle over how to run the flailing company. The board is keeping Mason at the helm, but the fighting probably isn’t over. Super-voting shares like the ones both men own are meant to give founders flexibility. But Groupon is a reminder of just how dangerous the arrangement can be.

Nov 30, 2012 07:52 UTC

HK exchange plays it safe with equity finance


By Peter Thal Larsen

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

Hong Kong’s stock exchange is playing it safe. The bourse’s $1 billion share placing will allow it to repay more than half the debt it took on to buy the London Metals Exchange earlier this year. Ultra-low yields might make bonds look tempting. But a recent share rebound, and HKEx’s hefty dividend payout, justifies its cautious approach.

Nov 29, 2012 19:07 UTC

Corporate America fears taxes more than recession


President Barack Obama is seeking input from Corporate America on the so-called fiscal cliff. But whatever company honchos may be saying about the risk of recession in 2013 if tax hikes and spending cuts kick in on Jan. 1, it looks as if they actually fear higher taxes more than a downturn.

Exhibit A is the recent flurry of special dividends, including a $3 billion whopper announced on Wednesday by warehouse retailer Costco. Data group Markit says 112 firms so far this quarter have already pulled the trigger on special dividends. They include casino operator Las Vegas Sands, which will send more than $1 billion to Mitt Romney’s pal Sheldon Adelson, his wife and the trusts the billionaire controls. Markit expects 20 more firms to do something similar before the year is through.

Nov 29, 2012 14:37 UTC

Spain’s bank rescue is part bail-in, part bail-out


By George Hay and Neil Unmack

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

Spain’s bank haircuts are part bail-in, and part bail-out. The indebted government has lopped 10 billion euros off its euro zone-funded bank rescue bill by cutting the value of its worst lenders’ hybrid debt. Yet if it hadn’t been for political considerations, the burden-sharing might have been greater.

Nov 29, 2012 05:47 UTC

Low valuations don’t make China stocks a bargain

By Wayne Arnold

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

Conventional gauges of value make China’s stocks tempting, particularly amid signs growth may be picking back up. But even if the economic rebound lasts, stocks haven’t been great proxies for corporate growth. Even China bulls should be ursine on the country’s equities.

Nov 28, 2012 10:15 UTC

Olam should show, not tell in Muddy Waters fight

By Andy Mukherjee

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

Muddy Waters and Olam are trading punches. The U.S. short-selling firm has released a 133-page report that mixes forensic accounting with some shoe-leather sleuthing in Africa to claim that the Singaporean commodities firm is heading for an Enron-style collapse. Now Olam has hit back with a detailed rebuttal. But for a trading business, perception matters more than facts.


No offense, but you must be joking… How can you seriously suggest OLAM should sell off part of their inventories just to prove that they are a liquid asset. It is bad enough that OLAM management has to spend their valuable time writing a 45 detailed response to the MW report and go through the effort of having to sue MW for their baseless attacks. OLAM has done more than enough to show that they are a legitimate operation. Let them go back to do their business and create employment and shareholder value as they have done successfully for a long time already (unlike MW).

The burden of proof is on MWs side. Unlike OLAMs track record, CB so far got only one thing right in his career (Sino Forest) and plenty of failures (such as Focus Media, as well as his storage company). As far as I am concerned he is an arrogant 36 year old wanna be finance star, who is targeting companies with complex balance sheets to make a quick buck on the short side, as he knows there will always be some doubt left, after he attacks them.

There is nothing wrong with shorting stocks of companies you dont like. Many hedge funds do that successfully. There is everything wrong with building a large short position in a stock and then using you reputation to make aggressive public statements
about the company such as “the company will fail and shareholders will be left with nothing”.

I thought we had finally learned a lesson that employment creating, profit creating companies are more valuable to society than Gordon Gekko style short sellers. I find it absolutely appalling that a Reuters reporter is taking the MW side on this issue.

Posted by Rakuten1 | Report as abusive
Nov 26, 2012 16:01 UTC

Barclays’ investment bank is too good to lose


By Dominic Elliott

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

Is Barclays’ investment bank too good to lose? Antony Jenkins is wrestling with this question ahead of the UK lender’s strategic D-day next February. Politicians, as well as some regulators and shareholders, wouldn’t mind seeing the hard-charging investment bankers associated with the Bob Diamond debacle cast adrift. But while Jenkins will need to perform open-heart surgery on the unit, it still has value as part of the group.

Nov 23, 2012 10:59 UTC

New risk factor for China stocks: divorce


By Wei Gu

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

Broken marriages are an unwelcome new risk factor for China investors. Shares in Longfor Properties dropped 4 percent on Nov. 20 on news that its founding couple had divorced and split their controlling stake, sparking fears of a covenant breach. Family feuds are growing more common, and investors are taking a share of the strife.

Nov 22, 2012 10:36 UTC

A Hewlett-Packard primer on how not to do a deal


By Richard Beales and Robert Cyran

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

If it weren’t so tragic for a once-revered technology pioneer, the story of Hewlett-Packard’s purchase of Autonomy would be a comedy of errors. If nothing else, it’s a case study of what to avoid when tempted to contemplate a big takeover.


Fiorina and Apothker are folding and refolding their golden parachutes, so they really could care less about what happens to HP.

Quattrone has several golden parachutes and piles of dust-laden money. The opinions of the authors about Quattrone are the most cogent. Yet, nothing of substance will occur until the next corporate debacle unfolds with more golden parachute departures. This jaded business is an on-going United States saga.

Meanwhile, 50% of all college graduates have no jobs, and they are buried in debt from the student loan racket, and almost 50% of the United States citizens will still have no adequate health-care. The care that Obama is offering will cost the average citizen more than he or she can afford, and medicare without an expensive insurance supplement is useless.

Try to find a physician who will accept medicare without a supplemental package. Next to impossible.

Pay more attention to the average citizens in the United States. The corrupt Corporate Oligarchy will take care of themselves, as they have always done.

In other words:get real.

Posted by decker | Report as abusive
Nov 22, 2012 10:31 UTC

German press crunch time could imperil democracy


By Olaf Storbeck

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

This autumn is proving to be particularly grim for the German press. DAPD, the country’s second-largest news agency went into administration in early October. The Frankfurter Rundschau, the oldest national paper in Germany, followed suit last week. On Thursday, Gruner + Jahr (G+J), Europe’s largest printing and publishing house, will probably pull the plug on Financial Times Deutschland (FTD).