Feb 17, 2015 19:34 UTC

Fresh flames rise from Sealy’s ever-burning bed

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By Stephanie Rogan

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

The burning bed is flaring up again. Uppity hedge fund H Partners, alleging a dormant stock price at Tempur Sealy and private equity directors asleep on the job, wants the boss sacked and a seat on the board. A torturous financial history suggests it’s probably time to light a fire under the company and the industry again.

Feb 16, 2015 10:58 UTC

Michele Ferrero leaves $25 bln-plus Nutella empire

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By Quentin Webb

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

Michele Ferrero leaves a $25 billion-plus empire. The confectioner, who has died at 89, had a gift for creating and marketing treats, building Italy’s biggest fortune from nutty spread, Kinder Eggs and Tic Tacs. Stock markets and deals were both anathema. Rivals will hope his heirs tire of independence.

Feb 13, 2015 19:42 UTC

Costco customers look like winners in Amex scrum

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By Rob Cox and Stephanie Rogan

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

True to form, Costco customers may come out ahead in a valuable commercial arrangement. That’s at least one way to read the market tea leaves from this week’s divorce between the U.S. warehouse retailer and American Express, its longtime exclusive payments partner. The news swiped some $8 billion from the card issuer’s value. Only part of that has accrued to rivals MasterCard and Visa. The shortfall reflects the benefits to millions of discount shoppers.

COMMENT

AMEX is the Mercedes of credit cards with a high bar for getting one. That made for some level of exclusivity at Costco, and exclusivity always enhances a brand. Now to let the rift raft in thru run of the mill Visa or Master Cards will diminish the brand. Ditto for their left coast decision on dumping Coke for Pepsi.

Save me money on pork chops or wine, but do not destroy your brand image in the process. I won’t have the same positive image of Costco.

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Feb 12, 2015 20:13 UTC

Expedia indicates first-class M&A tickets remain

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By Kevin Allison

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

Expedia’s plan to buy Orbitz Worldwide indicates that some first-class M&A tickets remain available. The online travel agent’s shares jumped 16 percent after it said it would pay $1.6 billion, including debt, to absorb its smaller rival. Despite evidence of fewer easy pickings, Expedia shows why the deal boom still has some runway.

Feb 12, 2015 17:03 UTC

A fat and happy GM is a dangerous company

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By Rob Cox

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

About halfway through his account of the U.S. government’s rescue of the automotive industry, “Overhaul,” Steven Rattner describes a Eureka moment. As President Barack Obama’s former car czar tells it, a young financial whiz on his staff, Harry Wilson, bounded into his office in the bowels of the White House waving a sheaf of papers, saying: “We’ve been thinking about this the wrong way.”

COMMENT

There is too much emphasis on company performance when handing out bonuses to employees. I worked on a team at GM where the manager would leave for a week numerous times per year and never tell anyone (at least no one who worked for him). He never cared much about what happened on his team as long as he could make himself sound important when he spoke to his bosses and peers. It was disgusting that no matter what issue you sought his help with, he could only offer childish advice and a lot of nodding and agreeing.

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Feb 12, 2015 15:16 UTC

Yahoo’s Alibaba spinoff attracts big discount

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By Robert Cyran

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

Yahoo can’t even earn a reward for doing what shareholders wanted. The company’s plan for a tax-free spinoff of its stake in Alibaba looks logical. But a Breakingviews calculator suggests investors are attaching a 34 percent discount to the U.S. tech firm’s Alibaba shares – assuming, that is, Yahoo’s core business is worth something.

Feb 11, 2015 20:56 UTC

Drugmakers unlikely candidates for next big short

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By Robert Cyran

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

Drugmakers make unlikely candidates for the next big short. Kyle Bass, a hedge fund manager who bet successfully on a U.S. housing crash, is targeting pharmaceutical companies worth a combined $450 billion in market capitalization. A new method of challenging patents gives him a tool. But it’s not clear how his firm, Hayman Capital, has a leg up on existing, aggressive and experienced generic firms.

Feb 9, 2015 17:22 UTC

Today’s Wall Street can’t produce a John Whitehead

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By Antony Currie and Rob Cox

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The storied career John Whitehead led over the past 70 years or so is virtually impossible to imagine on today’s Wall Street. The former Goldman Sachs boss, who died on Saturday at 92, was not just instrumental in developing the global investment banking model that largely still exists today. He also took on prominent positions in public service after he left.

COMMENT

Chairman Whitehead, was a great inspiration in my life, both personally and professionally. He was a World War II Hero, and he never stopped giving of his service to his Country and to his fellow citizens. He was instrumental in helping President Reagan tear down that Wall and integrating the Eastern Bloc back into the free world. He will be missed. May the Chairman of the Establishment Rest in Peace.

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Feb 6, 2015 20:54 UTC

DuPont drives wedge between shareholders and Peltz

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By Kevin Allison

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

DuPont has driven a wedge between shareholders and Nelson Peltz. Adding two turnaround veterans to the $70 billion chemical giant’s board may make stockholders think twice about voting in a rival slate from the billionaire activist’s Trian Fund Management. DuPont says Peltz nixed an offer to add one of his picks because he wanted the spot. He may just have been outplayed.

Feb 5, 2015 21:40 UTC

Rob Cox: When CEOs are worth more as former CEOs

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By Rob Cox

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

When it comes to creating value for shareholders, one move a chief executive officer can make is to quit. Shareholders applauded two high-profile CEO departures at big public companies this week: Ally Financial and Petrobras, Brazil’s state-controlled energy giant. Ousters at McDonald’s recently and Microsoft in 2013 earned similarly positive reactions. Though each case is unique, the common thread seems to be relief after a leader becomes entrenched and inflexible.