Warren Buffett showed again that his name and money is enough to give a struggling company instant credibility in the market. But the legendary investor also demonstrated his canny command of that reputation means that deals such as the $5 billion investment in Bank of America can immediately generate profits.
Consolidation in the Asian exchanges industry hit a roadblock on Tuesday when Australia said it intends to reject Singapore Exchange’s proposed $7.8 billion bid for Australia’s ASX on “national interest” grounds.
Warren Buffett’s reputation as someone who prides himself on his transparency and handpicks managers who can run businesses in a similar manner, took a blow when David Sokol, widely seen as Buffet’s successor at Berkshire Hathaway, resigned after buying shares in chemical company Lubrizol Corp before pushing Buffett to acquire it. Sokol said he did nothing wrong. Analysts said any impact on Berkshire Hathway will be short-term but acknowledged that Buffet’s brand was damaged.
AT&T’s surprise $39 billion deal to buy T-Mobile USA from Deutsche Telekom will create a new leader in the U.S. mobile sector and likely draw scrutiny. The regulatory challenge will be predicting what the dominant form of communication will be 3 to 5 years from now, analyst Evan Stewart said. The deal will take a year to close, in which time customers are expected to see improved network quality, according to AT&T.
Extreme market volatility tends to make investors a jittery bunch. The deadly earthquakes and nuclear crisis in Japan will obviously have an immediate impact there, but the fallout from the catastrophe is expected to spread across the globe where it could delay or even cancel a slew of new share offerings and debt deals.
News and views on the asset management industry from Reuters and elsewhere: