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Feb 21, 2012
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Deloitte caught in Diamond Foods’ glare

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

Deloitte can’t seem to avoid the spotlight. Just a few months ago, it became the first of the Big Four accounting firms to be publicly shamed by their U.S. regulator for past failings. And now another client, Diamond Foods, has admitted to botching two years of financial reports. Deloitte could be headed back into the spotlight.

Feb 9, 2012
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Diamond Foods crashes after running before walking

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By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Diamond Foods has been reduced to an injured crawl after it tried to run before walking. The salty snacks purveyor came clean after the market closed on Wednesday about $80 million of bad accounting and replaced its chief executive and chief financial officer. The shares tanked another 40 percent, to under $22, in after-hours trading, and its hope of buying Pringles looks all but dead. It’s a cautionary tale of how hard it is to go from private and small to public and big. But that’s not the only lesson.

Four months ago, Breakingviews pointed to some oddities in Diamond’s financials, including dubious-sounding “momentum payments” to walnut growers. The company brushed off the inquiries. So did most investors: Diamond shares were trading at over $90 apiece at the time.

Feb 3, 2012
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Super Bowl may settle buy-side/sell-side rivalry

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

Sunday’s Super Bowl XLVI clash will reflect another great rivalry – between Wall Street’s sell-side banks and the buy-side investors of Boston’s mutual fund industry. The New England Patriots will be seeking retribution for a loss to the New York Giants in the same season finale just four years ago. The bragging rights this year could help the two groups of financiers decide, Gordon Gekko style, whose form of greed prevails.

Jan 17, 2012
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TPG can be forgiven its mile-high club fetish

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

David Bonderman hasn’t forgotten his first fling. The former lawyer parlayed his 1982 experience as trustee for Braniff Airlines into a deal to buy Continental Airlines out of its second Chapter 11 filing a little over a decade later. That successful bet enabled the Texas takeover artist to co-create buyout biggie TPG. Since then, he has continued to chase airlines the world over, including now bankrupt American. A recent failure hasn’t dampened Bonderman’s ardor.

Jan 12, 2012
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Carlyle’s big payday does private equity no favors

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By Jeffrey Goldfarb

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

Carlyle Group isn’t doing its industry any favors. As part of the private equity firm’s initial public offering process, this week it revealed the lucre reaped by its three founders last year. David Rubenstein, William Conway and Daniel D’Aniello took home a combined $400 million in cash payouts. That’s on top of their nearly $4 million salaries and the profits on $200 million of distributions on personal investments in the firm’s funds. Carlyle’s timing is impeccable.

Jan 10, 2012
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Private equity skewered by Romney-bound arrows

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By Jeffrey Goldfarb

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

Private equity is caught in the crossfire. Rivals for the Republican nomination for the U.S. presidency are leading a full-blown assault on front-runner Mitt Romney’s track record at Bain Capital. The attacks won’t stop Romney, but the collateral damage could hurt the buyout industry.

Dec 28, 2011
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More corporate carve-ups to delight M&A bankers

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

In mergers and acquisitions, 2011 will go down as the year of the spinoff. Activity is on pace to hit $230 billion – six times 2010’s total and approaching a whopping 8 percent of global deal activity, according to Citigroup. With rocky economic conditions unlikely to give chief executives much reason to go shopping, 2012 could bring still more splits.

Dec 23, 2011
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LBO debt gluttons have now gorged on equity too

By Jeffrey Goldfarb

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

Leveraged buyout kings renowned for their debt gluttony have now gorged on equity, too. They’re sitting on nearly $400 billion of cash committed by investors, according to Preqin, or more than $1 trillion of purchasing power. A big slug of it belongs to mega-buyout funds that are already at or approaching their use-by date.

Dec 15, 2011
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P&G didn’t crunch its Pringles partner adequately

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

Procter & Gamble didn’t crunch the details on its Pringles partner adequately. Troubles escalated for Diamond Foods, the agreed buyer of the chips brand, on Thursday as the Securities and Exchange Commission initiated a probe into its accounting on the heels of the snack food company’s own internal inquiry. The scale of the issues being investigated suggests the consumer giant missed some warning signs.

Everything looked crisp back in April when the $2.4 billion transaction was announced. Diamond shares soared as it appeared to fulfill ambitions to grow from a walnut co-operative to a global player in salty treats. For P&G, a craftily-structured deal allowed it to finally exit the food business.

Dec 7, 2011
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Don’t boo U.S. football’s zero-coupon perpetuals

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

The Green Bay Packers are on some kind of streak. The venerable U.S. football team has followed up last year’s Super Bowl victory with 12 consecutive wins to start this season. It is now parlaying the local exuberance into an unconventional investment achievement.