Key Yahoo investor Starboard demands management change

JAN 7, 201612:09 AM

[NEW YORK] A key investor in Yahoo demanded Wednesday that the board of directors undertake a management change and warned it could push for a board shakeup if that did not happen.

Activist hedge fund Starboard Value said investors appear to "have lost all confidence in management and the board" after the company, led by Silicon Valley star Marissa Mayer, has failed to turn around Yahoo's struggling core Internet business.

In a letter to the board, Starboard said Yahoo needs to sell off the core business to other investors, but that so far the company has ignored expressions of interest from buyers.

"We are highly confident that there are interested and credible buyers for Yahoo's core business," it said.

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"Yet, unfortunately, according to several credible media reports, Yahoo has thus far ignored this inbound interest. This is highly concerning to us." Starboard said the current management thus "continues to destroy value" of the company and that the board "must accept that significant changes are desperately needed."

It said if the board is not willing to undertake significant changes in the company's leadership, "then an election contest may very well be needed so that shareholders can replace a majority of the Board with directors who will represent their best interests."

Last month SpringOwl, another sizeable Yahoo investor, demanded the company cut more than 80 per cent of its workforce and replace chief executive Mayer.

The criticisms come after Yahoo reversed course in early December and decided not to sell off its lucrative stake in China's Alibaba and instead spin off its core Internet business.

Investors like Starboard point out that current market valuations of the company put the value of the core business at zero, and that selling it to investors would reap far more for investors than keeping the business.

"Despite over three years of effort and billions spent on acquisitions, the management team that was hired to turn around the core business has failed to produce acceptable results, in turn, causing massive declines in profitability and cash flow," Starboard said.

Yahoo shares were down 0.7 per cent at $31.98 in early trade Wednesday. They have lost about 35 per cent over the past year.

AFP

      

Apple reports over US$1.1b in App Store sales in holiday season

Apple Inc said customers spent over US$1.1 billion on apps and in-app purchases in the two weeks ending Jan 3, setting a record for holiday season sales. 

PHOTO: REUTERS

JAN 6, 201611:05 PM

[SAN FRANCISCO] Apple Inc said customers spent over US$1.1 billion on apps and in-app purchases in the two weeks ending Jan 3, setting a record for holiday season sales.

On New Year's day alone, customers spent more than US$144 million, breaking the previous single-day record set on Christmas Day.

Customers bought apps for iPhone, iPad, Mac, Apple Watch and Apple TV worth over US$20 billion on the App Store in 2015, Philip Schiller, Apple's senior vice president of worldwide marketing, said in a statement on Wednesday.

The App Store has brought in nearly US$40 billion for developers worldwide since 2008, with over one-third generated in 2015, the company said.

REUTERS

Standard Chartered among banks in China forex ban: sources

Standard Chartered is among three lenders that China's central bank last week suspended from conducting some foreign exchange business until the end of March, two sources with direct knowledge told Reuters on Wednesday. 

AFP

JAN 6, 20165:39 PM

[SHANGHAI] Standard Chartered is among three lenders that China's central bank last week suspended from conducting some foreign exchange business until the end of March, two sources with direct knowledge told Reuters on Wednesday.

Reuters reported on Dec 30 that China's central bank had suspended Deutsche Bank and two other lenders from conducting some of their foreign exchange business, China's latest bid to stem capital fleeing the country in the face of a weakening yuan.

The notices sent to banks did not give a reason for the suspension, but the sources for that story said their banks might have been targeted due to the large scale of their cross-border forex businesses.

One of the sources for the involvement of Standard Chartered, which is currently in the middle of a global restructuring, said the bank has asked the People's Bank of China to shorten the suspension.

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A spokesman for Standard Chartered declined to comment. When contacted by Reuters last week, Deutsche Bank declined to comment.

China's central bank did not respond to requests for comment.

Standard Chartered made US$720 million from foreign exchange trading globally in the first half of 2015, according to its half-year financial statement, equivalent to 8.5 per cent of the lender's total operating income.

Chinese authorities are starting to police the nation's foreign exchange market in a way currency traders have rarely seen before, levying penalty payments for aggressive trading and prompting some banks to turn down business.

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ECB flags banks' business model as key risk area; eases focus on capital

Europe's top banking supervisor will prioritise risks associated with banks' business model over capital adequacy this year, it said on Wednesday, signalling its intention to move away from an era where capital levels were at the top of regulators' agenda. 

PHOTO: REUTERS

JAN 6, 20165:59 PM

[FRANKFURT] Europe's top banking supervisor will prioritise risks associated with banks' business model over capital adequacy this year, it said on Wednesday, signalling its intention to move away from an era where capital levels were at the top of regulators' agenda.

The European Central Bank's Single Supervisory Mechanism, which supervises the eurozone's largest banks, outlined its priorities for the year.

"Among the key risks identified, business model and profitability risk is ranked the highest, followed by other key risks, the importance of which varies across SSM countries," it said in a document published on its website.

Among them, it cited credit risk and heightened levels of non-performing loans, reversal of the search for yield and conduct and governance risk.

Banks' ability to meet upcoming regulatory capital requirements featured at the bottom of the list.

REUTERS