Breakingviews

Cox: Iron Man Musk wages war on too many fronts

By Rob Cox
July 19, 2016

Like the film superhero modeled after him, Tesla's boss is taking on the world. Fighting regulators, Warren Buffett, industries and the laws of physics means Musk can't afford to alienate investors. Dropping a proposal to buy SolarCity could strengthen his next master plan.

Volatile Netflix could turn shorts’ binges to bust

July 19, 2016

The $42 bln streaming service's shares plunged 15 pct in late trading after Monday's weak earnings. That kind of move tempts those who bet on stocks falling. But Netflix's share price, which has multiplied 80-fold since its 2002 IPO, has spiked up nearly twice as often as down.

Monsanto may be overestimating independence

July 19, 2016

The U.S. crop giant rejected Bayer's latest $64 bln takeover offer, calling it "financially inadequate." To achieve the $125 a share on offer on its own over three years would be tough, however, even with aggressive assumptions. Monsanto boss Hugh Grant is protesting too much.

The City will survive Britain’s big rift

July 19, 2016

The UK's Brexit vote threatens London's financial hub-ness, but it would be wrong to think in simple binary terms. Even at worst, the costs to a global bank of staying on in the UK are likely to be counterbalanced by the costs of leaving. And really, it's clients who will decide.

SoftBank’s Son tests limits of investor patience

July 19, 2016

SoftBank shares tanked after its no-synergy, $32 bln bet on UK chip designer ARM. Having just lost his heir apparent, founder Son talks about the company as if it is private and says the highly leveraged entity is "net debt zero". It takes the shine off his striking track record.

ARM bids best left to the irrational or desperate

July 18, 2016

Japan's SoftBank's $32 bln offer for the UK chip designer is a monster bet on the "internet of things". It would only make financial sense if the bidder quintupled ARM's operating profit. That sets a high bar for rivals like Intel, who in any case could face anti-trust hurdles.

from Viewsroom:

Viewsroom: Brexit; Pokemon Go; Minimum wage

July 15, 2016

New UK Prime Minister Theresa May is assembling a cabinet that may deliver Brexit-lite. Meanwhile, the surprising success of Pokemon Go bodes well for much broader use of augmented reality. And Jamie Dimon has both selfish and smart reasons for boosting bank teller pay.

Turkey will pay high price for political stability

July 18, 2016

President Tayyip Erdogan is reasserting control after seeing off a military coup. He offers stability of sorts, which explains why Turkish assets pared knee-jerk losses. But his crackdown also engenders uncertainty, which investors loathe. Luring foreign money will be harder.

SoftBank’s $32 bln ARM bet gives investors a shock

July 18, 2016

The Japanese tech group has reportedly agreed to buy the UK chip designer. It's a pricey punt on connected devices, and an unwelcome surprise for those who thought SoftBank was focused on reducing debt. Shareholders remain at the mercy of Chairman Masayoshi Son's "crazy ideas".

Yahoo’s failure clarifies future for U.S. spinoffs

July 15, 2016

The Treasury modified regulations on when splits can qualify for tax-free treatment. The move comes after the IRS declined to bless Yahoo's carve-out of its Alibaba stake. Similar deals have been on hold since. This reasonable government approach provides much-needed clarity.