Breakingviews

SpaceX satellite dream is throwback to 1990s

January 21, 2015

Google is investing in Elon Musk’s company, which is planning a broadband network of 4,000 satellites. The pioneering Teledesic tried something similar two decades ago but failed. Falling costs and rising demand have changed the equation. But SpaceX could still be too early.

Old M&A dogs try old tricks with new activist fund

January 21, 2015

Former JPMorgan CFO Doug Braunstein and lawyer Jim Woolery have collected $250 mln and a CEO network to kick-start a fund to buy small stakes in companies and persuade them to do value-enhancing deals. The question is whether there’s room for permanently well-mannered activism.

Morgan Stanley rains on its own parade

January 20, 2015

The Wall Street firm was progressing nicely in the first nine months of 2014. A dismal fourth quarter, though, exposed cracks that boss James Gorman still needs to fix. Hitting a 10 pct ROE this year may be possible, but could require the Fed’s helping hand on capital return.

Climate feels right for certain deals in Davos

January 20, 2015

The Swiss mountain air is crisp but the M&A market is hot. Fresh off a $3.5 trln year, bankers and CEOs have plenty to discuss at the World Economic Forum annual meeting. It’s less clear the atmosphere is conducive for the important political accords for which Davos is renowned.

Volatility is the new weather for Citi and BofA

January 15, 2015

Both joined JPMorgan in blaming market ups and downs for hurting earnings. That’s rich after years of claiming conditions were too docile. Nor can it mask the deeper problem at the two banks. Even if traders do better and one-offs are stripped out, returns remain inadequate.

Rob Cox: It took the Grim Reaper to restructure GM

January 14, 2015

The carmaker’s swift bankruptcy sparked less soul-searching than the process of determining who died from faulty ignitions. Bringing Ken Feinberg in will go down as CEO Mary Barra’s smartest decision. She should go a step further and memorialize the dead in the lobby of GM’s HQ.

Tech steering carmakers down valuation dead end

January 12, 2015

As the Detroit auto show kicks off, manufacturers from Toyota to Ford to VW are getting little, if any, credit for profit growth. Recalls, currencies and geopolitics are all to blame. Longer term, they’ll feel the squeeze from connected vehicles. Low multiples may be here to stay.

Cheap oil lubricates Li Ka-shing’s corporate rejig

January 12, 2015

Asia’s richest man is shifting a 6 pct stake in Canada’s Husky Energy to his holding company as part of a broader shake-up. The move is vital to keeping Li’s grip on the telco-to-property empire. Though shareholders may object, the falling oil price has worked in their favour.

Shire gambles AbbVie break fee on risky $5 bln deal

January 12, 2015

The Dublin-based drugmaker is buying NPS to expand in lucrative rare drugs. The 51 pct premium is covered almost entirely by compensation from the collapse of Shire’s sale to U.S. peer AbbVie. That doesn’t much mitigate the risk of doing a deal ahead of a key regulatory ruling.

Proxy fight as much about Peltz’s Trian as DuPont

January 9, 2015

The billionaire activist is seeking four board seats at the chemicals group, his first public contest since Heinz nine years ago. Flexing muscle sends a message to other stubborn targets, like Pepsi. It also gives younger staff at Trian Partners experience in the trenches.