Richard's Feed
May 20, 2013

Loyalty even to Steven Cohen has its limits

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

By Richard Beales

NEW YORK, May 20 (Reuters Breakingviews) – SAC Capital
Advisors may have exhausted its reserves of investor loyalty.
The U.S. government’s intensifying legal onslaught at the $15
billion hedge fund firm probably will force the remaining
outside investors, responsible for about $6 billion of the
assets, to run. Even Cohen’s legendary 25 pct annual returns at
some point aren’t worth the risk.

May 16, 2013
via Breakingviews

Bernanke deserves art museum spot next to Pollock

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By Richard Beales

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

Ben Bernanke probably deserves a spot somewhere in New York’s Museum of Modern Art. A record $495 million sale at Christie’s on Wednesday evening set new highs for Jackson Pollock, Roy Lichtenstein, Jean-Michel Basquiat and other contemporary artists. More collectors than ever have $20 million to spend on a single work. The buoyancy of the market paints a picture of an art world indebted to the Federal Reserve chairman and his alternative asset-friendly monetary policy.

May 1, 2013

Apple, Fed and IRS conspire to set debt records

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

By Richard Beales

NEW YORK (Reuters Breakingviews) – Apple(AAPL.O: Quote, Profile, Research) is breaking new ground again – but this time in finance. The iPhone and iPad maker launched a giant bond issue on Tuesday and may borrow well over $15 billion, the most in one shot by any non-bank ever. The bonds could also carry record low pricing. Eager investors should be alert to the perfect storm behind the deal.

Apr 19, 2013
via Breakingviews

Is Microsoft the quiet villain of global finance?

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By Richard Beales

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

Microsoft may be the quiet villain of global finance. Excel errors overstated pre-crisis structured finance ratings, dented JPMorgan’s risk management just as banks were on the mend, and tripped up influential fiscal policy ideas. The rest of the Office suite of “productivity” applications – the bulk of a division responsible for $24 billion in revenue in the last fiscal year – seems equally apt to court trouble.

Apr 9, 2013
via Breakingviews

J.C. Penney exposes inefficiency valuing CEOs

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By Richard Beales

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

The debacle at J.C. Penney exposes a glaring inefficiency in how the market values corporate chieftains. When the struggling U.S. retailer hired Apple whiz Ron Johnson in 2012, the company’s equity value spiked by more than $1 billion. On Monday evening, news of his departure added $350 million. The return of ex-Chief Executive Mike Ullman – the man Johnson replaced – swiftly erased some $700 million. Such big swings make no sense.

Apr 1, 2013
via Breakingviews

Apple’s Chinese apology worth the loss of face

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

Apple Chief Executive Tim Cook is starting to make a habit of apologies. The latest, in China, is worth the loss of face. Social media traffic suggests today’s worldly Chinese iPhone, iPad and Mac computer buyers won’t be swayed by what seems to be state-orchestrated media criticism. But the tech giant’s admission of arrogance is a cheap salve to a mass of future buyers of the company’s products.

Apr 1, 2013

Breakingviews-Dell blow-by-blow makes rival bidders’ jobs harder

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

By Robert Cyran and Richard Beales

NEW YORK, April 1 (Reuters Breakingviews) – A bidding war
for Dell (DELL.O: Quote, Profile, Research) just became even less likely. The computer
company on Friday laid out, in a novel-length filing, its
reasoning for agreeing to a $24.4 billion buyout by founder
Michael Dell and private equity firm Silver Lake Partners. It’s
only the company’s version, but Dell seemingly did what it could
to secure the best offer available.

Mar 15, 2013
via Breakingviews

Maybe SAC should forget about other people’s money

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

Maybe SAC Capital should forget about managing other people’s money. Steve Cohen’s $15 billion hedge fund firm is paying a whopping $616 million to settle Securities and Exchange Commission insider trading charges. It would be an ignominious time to follow legends like Stanley Druckenmiller, but Cohen is already losing over a quarter of some $6 billion of outside investor funds this year. It could be time to focus mainly on looking after his own cash.

Mar 13, 2013
via Breakingviews

Private equity at 4-and-20? Think twice

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

Private equity with a 4-and-20 fee structure doesn’t sound too inviting. It’s what a new vehicle will charge people with only $50,000 to invest to gain entry to Carlyle Group’s private equity funds, and it’s far more than what institutions pay. While the firm’s long-term internal rates of return on private equity, after fees, are nearly 20 percent, today’s reality holds less appeal. The arrangement could be risky for Carlyle, too.

Mar 7, 2013
via Breakingviews

Where did Apple’s missing market value go?

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

Mr Market has slashed Apple’s market value by $260 billion in six months. Meanwhile, the combined worth of a wide group of smartphone and tablet rivals has added less than half that. If investors think Apple is fading, the competing Android complex could be worth far more – to someone.

    • About Richard

      "Richard Beales joined Breakingviews.com in 2007 from the Financial Times, where he was US markets editor and a Lex columnist. Prior to the FT, he spent more than 10 years as an investment banker, based largely in Hong Kong. He was a director in Citigroup’s mergers team, and before that head of Schroders’ regional project finance group. He has also lived briefly in Sydney, Australia, and began his working life in London at Mars & Co, a management consultancy, in 1989. Richard holds a masters in business journalism from New York University and a degree in biochemistry from St John’s ..."
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