Breakingviews

Murdoch miscalculation points to Time Warner value

August 6, 2014

The media mogul abruptly yanked an $80 bln offer after failing to anticipate his quarry’s resolve and price demands of investors. Fox shares rallied while Time Warner’s retreated toward their pre-bid level. That leaves refusenik boss Jeff Bewkes with something more to prove.

Gannett split puts digital on wrong side of divide

August 5, 2014

The media company is spinning off newspapers, including USA Today, to unburden its TV arm. Cars.com, which Gannett is buying at a $2.5 bln valuation, would have buffered the weaker half in a similar way to Rupert Murdoch’s News Corp carve-up. Instead, print must stand on its own.

BES bail-in leaves CDS traders struck out

August 5, 2014

Banco Espirito Santo’s bail-in meant a killing for any traders that bought the bank’s senior debt and shorted its subordinated bonds. But not all arbs will be celebrating. A technicality means those who shorted credit default swaps on BES’s junior debt have lost out.

Vladimir Putin is the new bad weather

August 4, 2014

The bogeyman of Ukrainian unrest is replacing snow as a reason to expect worse earnings. Just ask VW, Adidas or McDonald’s. The World Cup goes the other way, helping Adidas (again), Twitter and maybe Disney. The message could be muddled when Russia and soccer converge in 2018.

Microsoft’s China dream sorely strains credibility

August 5, 2014

After 22 years, it’s hard to believe how little the U.S. tech giant has achieved in China. The country looks to account for just 2 percent of Microsoft’s revenue. Cloud services and Xbox sales may multiply that. But an antitrust probe raises the cost of business - possibly too high.

French T-Mo bid looks like peak TMT Entrepreneur

August 1, 2014

A debt boom has allowed TMT dealmakers like John Malone, Masayoshi Son and Patrick Drahi to finance their ever-bigger dreams. Now French billionaire Xavier Niel has made an unexpected $15 bln bid for 57 pct of Deutsche Telekom’s T-Mobile US unit. He risks over-reaching.

U.S.-backed China tech shows investment curb folly

August 1, 2014

Foreign funds sank $5 bln into venture capital the first half of 2014 – three times what local funds raised. That the country’s next Alibaba will probably be funded by Silicon Valley investors may jar with national pride and official rules. But China’s economy is the undeniable beneficiary.

Yahoo’s Mayer nears post-Alibaba reckoning

July 31, 2014

A stake in the Chinese e-commerce group makes up over half the U.S. internet firm’s value, a Breakingviews calculator shows. When investors can buy Alibaba shares directly - potentially next month - Yahoo chief Marissa Mayer will find herself under a narrower, brighter spotlight.

Shock loss at BES makes bail-in a real risk

July 31, 2014

The Portuguese bank made a 3.6 bln euro first-half loss and warned of possible illegal activity. The central bank suspended key staff. BES needs capital fast. But with Angolan issues unresolved, sourcing it from private investors rather than creditors just got much harder.

Line’s $13 bln valuation shows chat app exuberance

July 31, 2014

The Japanese chat app reported a 26 pct jump in revenue from the previous quarter, pushing up valuation expectations ahead of its planned IPO. Yet Line’s valuation hangs on an assumption that new overseas users will spend like those back home. That seems like wishful thinking.