Is “stranded costs” a euphemism for fat?

By Rob Cox
September 23, 2014

The answer to that question may determine the winner in the latest activist battle to captivate Wall Street: Nelson Peltz’s siege of DuPont. The billionaire’s controversial arithmetic suggests the chemicals giant has grown bloated over its 212 years. He’s on to something.

Tesco chairman approaches his sell-by date

September 22, 2014

The UK retailer’s warning that guidance was overstated by 250 mln stg reflects a serious controls failing. Chair Richard Broadbent recently delivered a new CEO, but has been slow to fix the board. His own lack of retail experience is starting to look like a drawback.

Alibaba IPO highlights SoftBank’s value dilemma

September 22, 2014

Following the Chinese e-commerce group’s listing, the Japanese conglomerate’s 32 pct stake is worth $75 bln. It eclipses the value of SoftBank’s core businesses. The near-5 pct drop in SoftBank’s shares after the IPO is a reminder the investment is both blessing and burden.

Larry Ellison cedes driver seat with hand on wheel

September 19, 2014

The Oracle founder is stepping down as CEO, but his 25 pct stake in the software giant – and dual role as chairman and chief technology officer – ensure he’s far from relinquishing control. Splitting his old job between two executives could, however, lead to a bumpy transition.

VC bigwigs reveal Valley’s contradictions

September 19, 2014

Peter Thiel’s new book sets out possible features of the next world-changing startup that will earn its founders a monopoly – another Google, say. Ben Horowitz’s focuses on running a tech company amid fierce competition. One is about vision, the other – for most people – reality.

Bayer’s plastic float sows seeds for one more sale

September 18, 2014

Investors added $5 bln to the German blue-chip’s market cap after it unveiled plans to float its capital-intensive MaterialScience unit. Once again, markets are rewarding sharper focus. A logical follow-up would be to quit agrochemicals, leaving a pure healthcare business.

Why buybacks should be banned

September 16, 2014

Some share repurchases get Warren Buffett’s seal of approval. But the great investor is on the wrong track. Buybacks are really dividends by another name. The price doesn’t matter. Besides, the practice is unfair to some shareholders and to governments. The world would be better without them.

Alibaba’s small IPO hike leaves room for believers

September 16, 2014

Boosting the maximum share price by 3 pct won’t affect appetite for the Chinese e-commerce giant’s $21 bln-plus offering. Investors appear more focused on Alibaba’s growth prospects than on governance risks. That points to a warm reception when it starts trading later this week.

Best defence against short-sellers is to buy stock

September 12, 2014

Several Chinese companies are under attack from anonymous research firms. Executives have tried to dispel doubts about their financial statements while railing against unnamed critics. But the most effective riposte to those betting on a lower stock price is to buy more shares.

Apple cooks up recipe to empty pockets and wallets

September 10, 2014

The tech giant combined a fingerprint sensor and an overlooked app into an iPhone payment system that looks secure and easy to use. A new watch lacks obvious appeal but has potential to replace car keys and other pocket detritus. Higher profits should be the cherry on top.