Nov 3, 2014 21:59 UTC

Music rally can shake off discordant Taylor Swift

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By Jeffrey Goldfarb

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

Back in 1989, the year Taylor Swift was born and the title of her latest hit album, Garth Brooks sold over 10 million copies of his eponymous record. It is a bygone era for the music industry. Until Swift released the collection that includes “Shake It Off” last week, no artist had sold even 1 million this year. That sort of popularity gives her the market power to make decisions like the one she did on Monday to pull her catalog from digital streaming service Spotify.

Nov 3, 2014 18:03 UTC

LabCorp deal tests positive for value destruction

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By Robert Cyran

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

Laboratory Corp of America’s $6.1 billion deal for Covance tests positive for value destruction. The strategic logic behind adding the clinical trial outsourcer to the firm that checks patients’ blood and other fluids is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 million off LabCorp as cost cuts fell far short of the 32 percent premium paid.

Nov 3, 2014 06:50 UTC

Macau’s casinos worryingly reliant on high-rollers

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By Ethan Bilby

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

A drop in Macau’s high rollers may push the Chinese territory’s gambling revenue to its first annual decline on record. Forecasts for next year seem over-optimistic. For many casinos in the coastal enclave, high-spending VIP gamblers are the biggest vulnerability. If they stop playing, the likes of Galaxy Entertainment and Wynn Macau would be particularly hard hit.

Oct 29, 2014 15:08 UTC

Deutsche Bank’s fixed income wager yet to pay off

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By George Hay

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

Deutsche Bank’s strategy is still on probation. The German group decided earlier this year not to follow Barclays, its largest European rival, in cutting back its investment bank. The bet will only pay off if the recent slowdown in bond trading is merely cyclical, not part of a structural decline. The evidence from the third quarter results is inconclusive.

Oct 28, 2014 18:47 UTC

Sky-high valuations no match for earnings reality

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By Robert Cyran

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

Sky-high valuations are no match for the sober black-and-white of quarterly earnings. Investors knocked more than 10 percent, or well over $3 billion, off Twitter’s worth in early trade on Tuesday despite a third-quarter report on Monday that showed sales doubling from a year earlier. Blame the company’s overdone valuation. Twitter trades at more than 100 times its own “non-GAAP estimated earnings” measure. Other U.S. companies on high multiples have suffered a similar reality check.

Oct 27, 2014 17:50 UTC

Chiquita inversion slips on cash appeal

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By Jeffrey Goldfarb

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

Chiquita shareholders got yellow and chose green. They voted down a stock deal to acquire Irish produce distributor Fyffes, a decision that led the U.S. banana company on Monday to agree to sell to Brazilian buyers for about $680 million in cash instead. Ailing arbitrageurs, a revolt against tax-driven mergers and global economic ructions all led to the path of least uncertainty.

Oct 27, 2014 07:09 UTC

Missed stock connection hurts China’s reform drive

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By Peter Thal Larsen

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

China’s financial reform drive has suffered another setback. A flagship scheme to link the Hong Kong and Shanghai stock exchanges has been delayed after regulators failed to approve it ahead of an expected launch on Oct. 27. The setback puts another question mark over why foreign investors would want to access China’s markets in the first place.

Oct 24, 2014 19:57 UTC

Duracell jolt highlights the value of focus at P&G

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By Kevin Allison

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

Procter & Gamble’s Duracell jolt highlights the value of focus at the sprawling $225 billion consumer products giant. Investors were energized by the detergent-to-diapers behemoth’s plan to offload its batteries arm. Spinning off copper tops won’t create much value on its own. But it’s a solid plank in boss A.G. Lafley’s campaign to shed underperforming brands and simplify an unwieldy business.

Oct 24, 2014 13:03 UTC

Amazon’s ambition outruns its cash flow

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By Robert Cyran

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

Amazon’s ambition is outrunning its cash flow. The online retailer’s 20 percent sales growth in its third quarter was slower than expected, and its $437 million loss was an ugly record. But it’s the firm’s voracious need for investment that is the bigger problem. Chief Executive Jeff Bezos’ vision may be limitless, but his company’s ability to finance it is not.

Oct 22, 2014 15:55 UTC

Amgen boss makes a prime breakup target

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By Robert Cyran

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

Amgen’s boss makes a prime breakup target for Dan Loeb. Former Morgan Stanley banker Robert Bradway has run the $109 billion biotech being eyed by the activist investor for the past two years. The idea of splitting such companies into a cash cow and a growth arm comes up often, but rarely happens. Amgen may be the exception.