NEW YORK (Reuters Breakingviews) - Bank of America is punching above Wells Fargo's weight. The Charlotte-based bank earned $6.7 billion for its common shareholders in the third quarter, or an 11 percent annualized return on equity. In other words, it lagged its West Coast rival's performance, as it typically does – this time by a percentage point. Yet the two now trade at the same multiple of 1.65 times tangible book value, an implicit valuation premium for BofA. Boss Brian Moynihan's turnaround has taken shape over years. Tim Sloan at Wells may close the gap again before long.
NEW YORK (Reuters Breakingviews) - Tesla can find a better chairman than James Murdoch. The outgoing chief executive of Twenty-First Century Fox is the leading candidate to oversee Elon Musk, the Financial Times reported on Wednesday. He’d be a better pick than any of the $44 billion electric-car maker’s other directors. But Musk’s tweet denying the story is a reminder that Tesla and its investors need a strong outsider to keep the boss under control.
NEW YORK (Reuters Breakingviews) - The chair of U.S. bank regulator FDIC in 2008 recalls how competition and disagreements between watchdogs contributed to the crash. A decade later, despite leaving the industry, she still feels an obligation to warn of the dangers of rolling back some post-crisis reforms.
NEW YORK/WASHINGTON (Reuters Breakingviews) - Tesla shareholders may soon find out what their company is really worth. The Securities and Exchange Commission is pushing to have Elon Musk removed as both chief executive and board member at the $53 billion electric-car maker, accusing him in a lawsuit on Thursday of making “false and misleading statements” about a plan to take it private. Tesla would be depleted without Musk, but also more rationally valued.
NEW YORK (Reuters Breakingviews) - Jefferies has a half-a-million-dollar question to answer. That’s the average compensation for employees at the Wall Street firm, based on results for the first nine months of its financial year released on Friday. It’s 25 percent more than Goldman Sachs shells out. Jefferies also hands staff more of its revenue yet has paltry returns. After a restructuring of its $7.7 billion listed parent, the gap is more prominent and unsustainable.
NEW YORK (Reuters Breakingviews) - Buying Merrill Lynch has been a qualified success for Bank of America. The $310 billion mega-lender bought the Thundering Herd essentially over a weekend in the depths of the 2008 crisis for $50 billion. Merrill’s retail brokerage has worked out well. But the M&A and equity franchises, which are about to get a new boss, have faded under the BofA brand.
NEW YORK (Reuters Breakingviews) - Lehman Brothers should not have failed. No, that’s not a criticism of the U.S. government’s refusal to bail out the firm, thus condemning it to file for bankruptcy on Sept. 15 a decade ago. Instead, it’s a recognition of how Chief Executive Dick Fuld and his lieutenants had built a well-run investment bank – until they succumbed to hubris.
NEW YORK (Reuters Breakingviews) - The crash cost the U.S. economy $30 trln, put 9 mln people out of work and as many families out of their homes. And it exposed how unprepared bankers, lawmakers and watchdogs were. Here we preview our podcast miniseries interviewing some of the movers and shakers of the time.
NEW YORK (Reuters Breakingviews) - Chief Executive Elon Musk’s abortive buyout dalliance has hurt his credibility – and may result in legal and regulatory censure. Getting the $53 billion company back on the road requires its cozy directors to do more of the driving. Breakingviews imagines the advice a consultant might give Tesla’s board.
NEW YORK (Reuters Breakingviews) - So Tesla isn't going private after all. Chief Executive Elon Musk has pulled the plug on taking the $55 billion electric-car maker private, the company said late on Friday. The abysmal handling of the half-baked idea caps Musk's long record of overpromising and underdelivering.