Avon CEO hire risks making corner office crowded
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Sheri McCoy, Avon Products’ new chief executive, should make a turnaround of the cosmetics firm a real alternative to a sale. After all, she has been running a big chunk of Johnson & Johnson, and Fortune ranked her the 10th most powerful woman in business last year. But Avon’s insistence on retaining Andrea Jung as executive chairman makes McCoy’s task look harder.
What’s Facebook really worth?
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Facebook’s 31 underwriting banks are mobilizing for the company’s initial public offering. In such a hyped IPO, any kind of valuation is possible. But a comparison with the history of the social network’s closest thing to a rival, Google, suggests that even $75 billion – at the low end of the talk to date – would be a stretch. A new Breakingviews calculator shows why, and allows bulls and bears alike to tweak the inputs.
Apple needs good, not just better, supply chain
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Apple has taken its share of criticism lately over working conditions at the Chinese factories of suppliers like Foxconn Technology. Despite the bad press, workers preparing the iPad 3 – which Apple is widely expected to unveil on Wednesday – are treated less badly than many in the electronics business. The sector in turn provides a noticeably better environment than, say, toy or clothing makers do, in the eyes of labor groups. But with Apple’s iconic brand, roughly $500 billion market capitalization and $100 billion of cash, doing things relatively well isn’t enough.
Top hedgies show Wall Street how it’s done
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
For bankers, the cash is greener on the other side of Wall Street. The top 40 hedge fund managers took home $13.2 billion between them for 2011, Forbes estimates. Yet even industry godfathers like Ray Dalio of Bridgewater Associates manage to attract far less opprobrium than bank bosses, whose paychecks are considerably smaller.
Too much success is priced into Facebook’s IPO
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Investors will have to like Facebook a lot to justify a potential $100 billion valuation. Essentially, growth and margins would both need to track Google’s trajectory to justify a price tag so high.
Einhorn case strikes mild blow against cronyism
By Richard Beales and Neil Unmack
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The allegations against David Einhorn don’t make for a garden-variety insider trading case. The UK’s Financial Services Authority has fined the well-known U.S. hedge fund manager and his firm Greenlight Capital 7.2 million pounds between them for the manner in which they dealt in shares of Punch Taverns. Though the case is fuzzy, if nothing else it exposes cozy practices in financial circles.
Counterpoint: Donating a bonus doesn’t reduce it
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Royal Bank of Scotland boss Stephen Hester should take a bonus but give it to charity, according to Breakingviews columnist George Hay. He reckons this would address the toxic politics of collecting a big payment from the government-controlled UK bank. That’s humbug. Philanthropy is to be encouraged, but it’s not a valid defense for a bonus.
Hollywood and Silicon Valley test wikigovernment
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s the talk of the blogosphere even if facts can’t be checked because Wikipedia has gone dark. The community-edited encyclopedia founded by Jimmy Wales is blacked out in protest over Hollywood-backed anti-piracy legislation in the U.S. Congress. Its passage now looks unlikely. But the spat is revealing about old media, new media and Washington.
Fed profit shows it’s in the market but not of it
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own
The Federal Reserve’s 12 regional banks are handing the Treasury $77 billion of their 2011 profit, a hair under the previous year’s record. That’s three-quarters of what all the nation’s commercial banks collectively make in a year, according to the Federal Deposit Insurance Corp. It’s a reminder that the U.S. central bank plays big these days – but by different rules.
For Obama’s 2012 hopes, it really is the economy
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Bill Clinton’s campaign advisers are still right: For Barack Obama, it really is the economy, stupid. One respectable forecasting model puts the U.S. president with a hair over half the two-party vote on Nov. 6, 2012. A Breakingviews calculator shows how even slight changes in the economic growth rate before then could tip the result dramatically.
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