James Gorman can leave Brian Moynihan in slow lane

December 18, 2014

The Morgan Stanley and BofA CEOs each marks five years in charge in 2015. Neither has had an easy time of it. Gorman, though, ought to be able to lead his firm back above a 10 pct ROE – an important, if humdrum, ambition. Moynihan’s lending behemoth remains a ways off that.

M&A “clear day” defenses can cloud investor rights

December 17, 2014

Anti-takeover protections adopted before threats arise are more apt to weather legal scrutiny. It’s one reason Allergan was able to resist Valeant’s $52 bln bid. When triggered reactively, they’re considered unfair surprises. Either way, shareholders often get unneeded cover.

Sony email shareholders would like to see

December 17, 2014

The hacking scandal at the Japanese conglomerate’s Hollywood studio isn’t just embarrassing. It’s a business problem for a company already struggling to turn itself around. Herewith, a fictional selection of internal messages Sony’s board ought to be fielding.

Jefferies closes annus horribilis on wicked downer

December 16, 2014

The Wall Street firm racked up a $93 mln fiscal Q4 loss. Boss Richard Handler says a senior banker’s messy public divorce had no material effect. Poor trading, a bum acquisition and one big bad debt took their toll. It’s a damaging concoction that should be limited to Jefferies.

European telecoms will dial up more deals

December 16, 2014

Investors have brightened as M&A has swept the sector. Thanks to BT, Britain is up next. More mergers could follow in France, Italy and Belgium. What’s not to like? Well, windfalls from big cross-border deals looks distant and valuations already price in most of the good news.

Uber’s law flouting could bring joyride to a halt

December 15, 2014

The taxi app company is covering drivers’ fines for illegal pick-ups. That may be just another business expense to a firm that earned a $40 bln valuation by moving quickly and breaking the rules. But the legal, lobbying and PR costs of reckless behavior are accelerating fast.

Goldman updates IPOs for the Candy Crush era

December 12, 2014

CEOs of firms heading for public markets are hooked on the bank’s app, which enables them to track results of roadshow book-building in real time. With Apple and IBM coding mobile software for big companies, the smartphone economy is swiftly moving from living room to boardroom.

More Porsche than Prada: Why Ferrari’s worth $7bln

December 11, 2014

Fiat will float the iconic sports car brand in 2015 and wants investors to see it as a luxury goods company rather than a carmaker. That’s a stretch. Building Ferraris takes more capital and R&D than handbags and shoes. Margins - and multiples - are lower for a reason.

Overreaching enforcers redraw insider trading line

December 11, 2014

A U.S. court tossed convictions of two hedge fund managers, sharply narrowing the law on improper dealings. Prosecutors should expect more embarrassing reversals. The silver lining is that the ruling gives Wall Street clarity on what’s forbidden and should curb government excesses.

Billy Salomon dies as his trading era returns

December 10, 2014

In 15 years as boss of his father’s eponymous firm, Salomon, who passed at age 100, made it a bonds powerhouse. Wall Street twisted the model into prop desks that helped seed the financial crisis. U.S. banks are now barred from such trades. What’s left is more Salomon’s style.