Nov 6, 2014 16:45 UTC

Cable M&A wave washes over the Caribbean

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By Quentin Webb

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

The cable M&A wave has hit the Caribbean. London-listed Cable & Wireless Communications will buy private cable group Columbus International for $3 billion including debt. With this deal, CWC aims to become the region’s top “quad-play” operator, selling mobile, landline, television and broadband together. The deal is pricey, unexpected, oddly structured and brave. But as in several European deals, the potential to cut costs and grow faster might offset these concerns.

Nov 5, 2014 19:13 UTC

Carlyle buys a shovel-maker for deal gold rush

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By Quentin Webb

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

In a gold rush, it pays to sell the shovels. Carlyle, the U.S.-based private equity firm, is teaming up with British publisher Euromoney to test the adage for the modern era. With stock sales, debt issuance and M&A booming, they’re acquiring Dealogic, a seller of financial data, for $700 million.

Nov 4, 2014 16:03 UTC

Alibaba delivers chunky growth, but at a cost

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By John Foley

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

After pulling off the largest share offering in history, Alibaba has raised expectations through the roof. The Chinese e-commerce group came close to meeting them on Tuesday with quarterly results – its first as a public company – revealing a 54 percent annual growth in revenue. That may justify the 50 percent runup in its shares since September. But profitability has slipped, and the company’s explanation doesn’t offer much comfort.

COMMENT

Alibaba is the Chinese version of Amazon, and both are based on hope for a change to big profitability that hasn’t happened yet. Both are in essence investment Ponzi schemes. The CEOs at the top rake in a load of loot while the suckers at the bottom who hold out for the big hope and change get the goose egg. Neither are legitimate retail outlets, because you can’t really make up for selling below cost with volume, but you can get suckers to invest in this scheme that is ruining legitimate retail and putting people out of work. Hope and change anyone? Plop down your money…suckers.

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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.