NEW YORK (Reuters Breakingviews) - Johnson & Johnson's talc crisis will linger for years. Investors erased $40 billion of its market value on Friday, after Reuters revealed the U.S. healthcare giant knew for decades its baby powder was sometimes tainted by asbestos. The company says the story is an “absurd conspiracy theory” as “every method available to test J&J’s talc for asbestos has been used by J&J, regulators, or independent experts, and all of these methods have all found that our cosmetic talc is asbestos-free.” If history is a guide the market may have over-reacted, but lawsuits and brand damage don’t easily dissipate.
NEW YORK (Reuters Breakingviews) - Uber and Lyft are jockeying for pole position to get through the window for initial public offerings while it’s open. The ride-hailing companies have made confidential filings for deals that could value the former at up to $120 billion and the later at more than $15 billion. Yet the frightful experience of Moderna, which plunged nearly 20 percent in its first day of trading last week after the biggest float ever in the biotech sector, shows demand for cash-burning firms is limited.
NEW YORK (Reuters Breakingviews) - Obamacare’s roots are growing too deep to dislodge. The Democratic Party wrested back control of the House of Representatives on Tuesday, thus effectively ending Republican hopes of overturning former President Barack Obama’s healthcare reforms. Even voters in heavily Republican states are warming to the law.
NEW YORK (Reuters Breakingviews) - Cloud-software firm Qualtrics deserves an equivocal “yes” from shareholders. The company wants a valuation of more than $4 billion in its upcoming initial public offering. It’s a stronger company than recently listed rival SurveyMonkey. But its undemocratic, double-barreled supervoting stock should give investors pause.
NEW YORK (Reuters Breakingviews) - Apple’s pricey strategy carries risk. Making its new iPhones more expensive helped boost the tech giant’s revenue 20 percent in the latest quarter. Now Tim Cook is applying the same formula to the company’s Macs, iPads and accessories. But a growth warning suggests even Apple fans may have sticker shock.
NEW YORK (Reuters Breakingviews) - Alphabet’s ad machine is aiding Tim Cook’s data case. The Google parent raked in more revenue and profit during the third quarter. The stronger the $730 billion firm gets, the more scrutiny it will attract from watchdogs who want to safeguard consumer data. The Apple boss’s willingness to call for tighter privacy restrictions is a telling sign.
NEW YORK (Reuters Breakingviews) - The Mega Millions lottery jackpot, available in 44 U.S. states, the District of Columbia and the U.S. Virgin Islands, has reached a record $1.6 billion. A successful punter or several will become at least as well off as founders of a hefty Silicon Valley technology unicorn. Rubbing shoulders on rich lists might rankle with startup billionaires – but their wealth owes plenty to luck, too.
NEW YORK (Reuters Breakingviews) - Apple founder Steve Jobs once wanted “to go to thermonuclear war” against Google for – he said – copying the software that powers the iPhone. Now his company and Alphabet, which owns the giant search engine, are bound by tight financial ties. Payments from Google may account for over 10 percent of Apple’s profit, a figure that is likely to rise.
NEW YORK (Reuters Breakingviews) - Facebook is late to fighting an existential threat for the second time in its 14-year life. Poor security, low-quality content and excessive advertising are as big a danger to Mark Zuckerberg’s company as the 2012 growth of mobile. Facebook finally appears focused on the threat, but it won’t be as easy to solve via acquisitions and improved apps.
NEW YORK (Reuters Breakingviews) - Instagram is Facebook’s golden goose – and it runs a real risk of being smothered. The departure of the photo-sharing app’s founders after six years as part of Mark Zuckerberg’s social network isn’t worrying on its own. But Instagram could suffer if too closely identified with its parent, and right now its growth is one of the $480 billion Facebook’s best features.