Newsletter: California Inc.: The explosive growth of M&A activity this year
Welcome to California Inc., the weekly newsletter of the Los Angeles Times Business section.
Here's a rundown of stories coming up this week and the highlights of last week.
Looking Ahead
Public pensions: The nation's largest public pension fund will take a deep look Monday into its private equity investments, against a backdrop of growing criticism over pouring such money into the risky and controversial sector. The California Public Employees' Retirement System has devoted about $28 billion, or nearly 10% of its total portfolio, to private equity deals. Despite big gains, the sector has had a subpar performance.
Rides upgraded: On Monday, Disneyland will launch new "Star Wars" features in Tomorrowland, an area that fans have long complained is in need of a makeover. The existing Star Tours and Space Mountain rides will be upgraded to add new scenes and features inspired by the upcoming movie "Star Wars: The Force Awakens." Space Mountain will be renamed — temporarily — Hyperspace Mountain.
IPOs on tap: Two big-name tech firms are set to go public this week. Online dating outfit Match Group in Dallas, which owns hookup app Tinder, hopes to raise $433 million, and digital payments firm Square Inc. in San Francisco hopes to raise $324 million. Square's offering is of particular interest: It's the latest test of investors' appetite for tech companies that have yet to turn a profit.
New vehicles: The Los Angeles Auto Show opens to the public on Friday and runs through Nov. 29. Automakers worldwide will take over the Los Angeles Convention Center to show off their newest, fastest and most expensive vehicles. Among the highlights are autos with hydrogen fuel cells and autonomous driving functions. Also on Friday, in Long Beach, the three-day Progressive International Motorcycle Show will open.
Drone registration: A plan to require registration of all drones in the U.S. will take a step forward Friday when a task force of regulators and industry and recreational groups turns in its recommendations for how the process would work. Federal regulators said in October that they want to require owners of recreational drones to register them with the government, just as owners of commercial drones must do.
The Agenda
Today's Business section focuses on the historic pace of mergers and acquisitions this year. The blistering rate could break the record of $4.6 trillion reached in 2007. Last May's eye-popping $37-billion deal involving Irvine chip maker Broadcom Corp., one of the biggest tech mergers at the time, now doesn't register among the top 10 global deals this year.
Story Lines
Here are some stories that ran in The Times' Business section in recent days that we're continuing to follow:
Poverty amid plenty: California's economy seems to be in its strongest shape in years, adding jobs at a faster rate than most other states and lowering the unemployment rate below 6% for the first time in years. Yet poverty abounds. The state's official poverty rate was 16.4%, according to U.S. census data last year, putting California in the top third of states nationwide.
Pro football bid: Walt Disney Co. Chairman and CEO Robert Iger has joined the push to develop a professional football stadium in Carson, creating speculation that Disney — the former owner of the Anaheim Angels baseball team and the Mighty Ducks hockey team — might want to get back in the game. Iger has clout, and that could help tip the scales for a Carson site over a rival bid in Inglewood.
Snapchat: Is the boom over for technology start-ups? Snapchat Inc. is the latest start-up to fall victim to fears that investors have become overzealous in valuing privately held technology companies. Fidelity Investments, which invested in Snapchat’s $538-million funding round that closed in May, has since lowered its estimate of how much its stake is worth by more than 25%.
Clean cars: One of the knocks on electric vehicles has been that although the cars themselves may not pollute the air, the power plants that create the electricity do. Now, a "cradle-to-grave" analysis of pollution associated with all stages of manufacturing and operation has concluded that, all things considered, electric vehicles in the U.S. result in fewer greenhouse gas emissions than do gasoline vehicles.
Bitcoin's back: After drifting off the public radar, digital payment network Bitcoin has been gaining momentum this fall, bolstering the view of some advocates that the virtual currency will go mainstream in the not-too-distant future. The value of a bitcoin surged to more than $400 in early November from its low this year of $177.28 in mid-January, thanks partly to a surge in bitcoin trading in China.
LeBron's L.A. digs: NBA superstar LeBron James of the Cleveland Cavaliers has bought an estate in Brentwood. The 9,440-square-foot house was not marketed for sale in the Multiple Listing Service, but public records show that the property sold several weeks ago for $20,986,500.
What We're Reading
And some recent stories from other publications that caught our eye:
Confused cars: Will our streets one day be filled with driverless cars? The New York Times looks at how engineers are trying to solve the flaws and vulnerabilities of computer-driven vehicles operating in cities. Such vehicles can become confused when trying to navigate "an urban world filled with complex architectural forms, reflective surfaces, unpredictable weather and temporary construction sites."
Retail slump: After years of strong growth, department store chain Macy's is facing a crisis, the Wall Street Journal reports. Sales declined in the latest quarter, and the retailer is heading into the crucial holiday season with piles of unsold goods. Activist investor Starboard Value is pushing for CEO Terry Lundgren to make changes.
Email gone wrong: In a story titled "Is Email Evil?" the Atlantic wonders how we have become so bogged down in our virtual inbox. "While email may work, technically, there's a profound sentiment — in tech circles, especially — that there’s something deeply wrong with the way people email today,” author Adrienne LaFrance writes.
Healthcare hacking: Many medical devices these days are connected to the Internet, and they're way too easy to hack into, Bloomberg Business says. Computer security experts found vulnerabilities in devices such as magnetic resonance imaging scanners, ultrasound equipment, ventilators and electroconvulsive therapy machines.
Gaming the system: A small number of giant global outsourcing companies have figured out how to manipulate a program designed to help American companies hire foreigners with special skills, the New York Times reports. The story shows how the outsourcing firms are submitting a flood of applications for H-1B visas right after the application window opens on April 1. Employers that apply a week later are shut out.
For the latest money news, go to www.latimes.com/business.
