May 9, 2012 16:06 UTC

Boardroom gamblers roasted by their own hubris

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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.

May 8, 2012 16:13 UTC

Facebook reality tops out near bottom of IPO range

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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.

May 7, 2012 19:33 UTC

When shareholder democracy trumps the real thing

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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.

May 6, 2012 17:22 UTC

Buffett Rule divides Berkshire Hathaway faithful

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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.

COMMENT

Agnes,

I don’t think this is very balanced reporting. I’m not happy with the level of complexity involving this matter and the over-simplification with which it is being discussed. Look at the answer from the Greg Hershberger – this is typical conservative rhetoric (of which I am conservative – but come on, he isn’t even thinking) and misses the point that 65% of the rich are paying 30% or more. So it isn’t a matter of whether the people producing should pay more tax, it is more about whether the person that invests his money in an actual company should pay more than the person that just invests his money in the stock. If the person buying the company pays himself more as the company makes more, he will get taxed on payroll taxes (33% at the highest rate). It is nothing but the lobbying activy of the traders, hedge fund managers, and the investment comunity that has created this gap, and Warren is suggesting that it be closed. He didn’t ask to reform the entire tax code and he didn’t suggest that this would solve our financial crisis. What it would do is get rid of some of the concern that the rich are getting richer by changing the rules – not because they are working harder, or smarter (cheating excluded). It doesn’t matter how much logic we use, some people have no interest in playing by the rules. You also didn’t mention that the second applause was louder than the first, and people seem to forget that Warren’s father was a republican congressman. RW

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May 3, 2012 21:06 UTC

Dependence on Facebook spreads beyond its users

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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.

May 3, 2012 15:16 UTC

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

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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.

May 3, 2012 10:57 UTC

China’s stock reforms should benefit brokers most

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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.

May 2, 2012 21:08 UTC

Nerds may get revenge on Woodstock of Capitalism

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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.

May 2, 2012 16:52 UTC

Let News Corp keep BSkyB

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By Chris Hughes

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

News Corporation should be allowed to keep its 39 percent stake in UK pay-TV group BSkyB. British MPs may be right when they say founder Rupert Murdoch isn’t “fit” to run News Corp and turned a blind eye to wrongdoing in its UK operations. But a regulatory review of BSkyB’s fitness to broadcast isn’t the place to remedy these failings.

May 2, 2012 10:49 UTC

Oil majors can only admire Colombia’s titan

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By Raul Gallegos

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

Global oil majors can only sit back and admire Colombia’s titan. State-controlled Ecopetrol just reported a 37 percent jump in first-quarter earnings and a 50 percent EBITDA margin that exists in the dreams of the likes of ExxonMobil. Replacing reserves will be tricky for Ecopetrol going forward, but the company, now worth a whopping $135 billion, still looks like the best oil play in Latin America.