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| | July 20, 2015 | |
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| | Hillary Clinton will unveil a package of measures this week designed to prod companies to emphasize long-term growth and avoid short-term solutions pushed by activist investors, according to the Wall Street Journal. Included will be a revamp of the capital gains tax.
This is the latest in Clinton's not-so-delicate dance to keep her Democratic coalition intact. She remembers the advice of the late Robert Strauss, who warned Democrats can't win if business is united against them. (And she's also attuned to her donors.) So while turning up populist rhetoric to appeal to the Bernie Sanders crowd, she's also making a bid for Larry Fink's business buddies.
It's instructive this news breaks on the same day eBay begins its new life as an independent company, separating from PayPal after pressure from Carl Icahn. (Read Leena Rao's report on the new company's challenge here.) Later this year, we'll also see the split of Hewlett Packard. Both break ups are touted as allowing new management teams to "focus." That's the opposite rationale from the one about "synergies" that is also making 2015 a record year for M&A activity.
There are times when it makes sense to break up a big company, and other times when it makes sense to put two together. But at the moment, we seem to have an excess of both, driven by investors' unquenchable appetite for yield. Whether tax tinkering can change that is unclear. But this debate is worth having.
More news below.
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| | Top News | |
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| | • eBay's new chapter begins Today, a PayPal-less eBay will begin to navigate the world alone as PayPal will start trading on the Nasdaq as an independent company that could be more valuable than its parent after the split occurs. New challenges have risen for the online shopping market, which now no longer has the faster-growing payments business to depend on. "The real question is whether eBay can execute on a McDonalds-like turnaround plan," one analyst said. Fortune • Greek banks reopen Greece's banks are finally reopening for some basic services such as payment orders and check deposits after being closed for three weeks to prevent economic collapse while the nation hashed out a tentative bailout deal. Though financial markets remain closed, the banks reopening are a sign that Greeks are seeing their first signs of stabilization. Bloomberg • Hackers target cheating website A hacking group has threatened a media company that owns Ashley Madison, a website meant for would-be adulterers, to take the site down permanently or risk the hackers to make good on a promise to publish data about users' real names and their credit card numbers. Avid Life Media later confirmed the leak, but also said the company might be close to identifying who took the data. Fortune • Lockheed agrees to buy Sikorsky Over the weekend, media reports from Bloomberg and Reuters claimed Lockheed Martin agreed to buy United Technologies' Sikorsky unit, a deal that would extend Lockheed's status as the world's largest defense contractor and widen its lead over Boeing in the U.S. Reuters reported the price will exceed $8 billion, which would make it the biggest aerospace acquisition since 2012, when United Technologies paid $16 billion for Goodrich. Bloomberg | |
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| | Around the Water Cooler | |
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| | • Drones: The good and the bad Last week, we've seen the far extremes about how good (and bad) drones can be to help and potentially hurt our society. On one end, a drone made the first FAA-blessed delivery of medical supplies. But within 24 hours, hovering drones were to blame for impeding fire fighters' efforts to fight a wildfire in southern California, as they delayed emergency responders that couldn't fly their own fire-fighting aircraft in the area. Fortune • Business travelers embrace sharing The taxi, rental car, and hotel industries are all confronting big challenges as tourists and big-city locals embrace startups like Uber and Airbnb. Business travelers are showing they are more inclined to use those services too, putting greater pressure on established industries. An analysis of expense report receipts found that Uber had overtaken taxis as the preferred way to get around while on business, while a separate report implied Airbnb was also becoming more popular with business travelers. USA Today • The dot-com hysteria around Jet.com Online marketplace Jet.com wants to beat Amazon.com at its own game and is pulling together perhaps the highest valuation ever among e-commerce startups before their official launch. That is leading the Wall Street Journal to raise questions about the broader implications of Jet's capital raising efforts. Jet.com, which opens on Tuesday, is in talks to raise additional capital that would make the online retailer a new unicorn valued at $3 billion from $600 million today. WSJ (subscription required) | |
| | 5 things to know this week | |
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| | Apple, Greek banks, and earnings — 5 things to know this week. This week's story can be found here.
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