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Bloomberg Businessweek

Bloomberg Businessweek 3/26/2018

Each issue of Businessweek features in-depth perspectives on the financial markets, industries, trends, technology and people guiding the economy. Get the digital magazine subscription today and draw upon Businessweek's timely incisive analysis to help you make better decisions about your career, your business, and your personal investments.

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United States
Bloomberg Finance LP
50 Issues

in this issue

8 min
coal baron. ex-con. senator?

On a cold, rainy night in West Virginia coal country this winter, Don Blankenship glares out at a half-empty conference room at the Big Sandy Superstore Arena in Huntington. For almost an hour, the ex-coal executive and ex-con reads off a teleprompter, doing his best impression of a political candidate. For a big man, Blankenship has a surprisingly soft voice; his message is anything but. He talks of his years of union-busting, the folly of environmental regulation, and the twin evils of illegal immigration and opioid addiction—blaming the first for causing the second. Throughout, he never strays far from the true target of his ire: Democratic Senator Joe Manchin. Blankenship blames Manchin not only for much of what’s wrong with West Virginia, but also for helping put him behind bars. In…

5 min
under fire and losing trust

On March 20, Facebook employees were quiet even for Facebook employees, buried in the news on their phones as they shuffled to a meeting in one of the largest cafeterias at headquarters in Menlo Park, Calif. Mark Zuckerberg, their chief executive officer, had always told them Facebook Inc.’s growth was good for the world. Sheryl Sandberg, their chief operating officer, had preached the importance of openness. Neither appeared in the cafeteria. Instead, the company sent a lawyer. The context: reports in the New York Times and the Observer the previous weekend that Cambridge Analytica, the political consulting firm that advised President Trump’s electoral campaign on digital advertising, had effectively stolen personal information from at least 50 million Americans. The data had come from Facebook, which had allowed an outside developer to…

2 min
battle of the oligarchs

The Feud Oleg Deripaska and Vladimir Potanin, Norilsk’s two biggest shareholders, are battling over what to do with the torrent of cash the company generates. Deripaska wants to pay out at least $2 billion annually in dividends, while Potanin favors increased spending on upgrades and expansion. Deripaska Emerged victorious from the violent battles over privatizing the aluminum industry in the 1990s. Deripaska has made headlines for his ties to Trump’s ex-campaign manager, Paul Manafort, and a sex scandal. Potanin Formed one of capitalist Russia’s first banking empires. He befriended Putin when the future president arrived in Moscow as a midlevel official in the 1990s. The two Vladimirs still play hockey together. Abramovich In 2012, Putin helped broker a truce between Deripaska and Potanin, who consented to sell some of their shares to another Putin ally and top…

4 min
the land of insider trading

A stock plunges just before bad news hits or soars ahead of a bullish headline. On Wall Street, that looks like a sign of insider trading. In Mexico, it’s more like business as usual. That’s because insider trading is rife in the $400 billion Mexican stock market—and almost everyone knows it. As in the U.S., trading on nonpublic information is illegal. But just 28 people in Mexico have been punished for the infraction since 2008, as far back as public records go. None have gone to prison, and the fines imposed add up to about $58,000 per person. (In the U.S., punishments in high-profile cases can be in the tens of millions of dollars.) It takes the regulator—Comisión Nacional Bancaria y de Valores, or CNBVan average of more than five…

4 min
while my guitar drowns in debt

Like the blues giant Robert Johnson, whose mastery of a Gibson guitar was said to have come from a deal with the devil, the 116-year-old company that made the instrument has come to a crossroads. Debt of as much as $560 million is due this summer, and investors are whispering that Chief Executive Officer Henry Juszkiewicz has got to go. Juszkiewicz traded a slice of the company’s soul in an attempt to turn it into more than just the maker of the world’s most beloved guitars. He bought pieces of consumer electronics companies to relaunch Gibson Guitar Corp. as Gibson Brands Inc., a “music lifestyle’’ company. It didn’t work out as planned. “My dream was to be the Nike of music lifestyle,” Juszkiewicz says. “At this point, I have to cut…

14 min
‘business as usual’

Prince Alwaleed bin Talal has taken a few knocks en route to becoming the richest investor in the Middle East and one of Saudi Arabia’s most recognizable faces. In the 1980s, he went broke. In 2008, during the financial crisis, he lost billions of dollars on Citigroup. But nothing compares to the humiliation he sustained over the past few months. Last November, Alwaleed’s uncle, King Salman, and his cousin, Crown Prince Mohammed bin Salman, engineered a government roundup of alleged fraudsters, embezzlers, and money launderers that landed Alwaleed in Riyadh’s now-infamous Ritz-Carlton hotel. He didn’t leave for 83 days. I saw Alwaleed in late October, the week before he became a prisoner of the state. We spent an evening at his desert camp chatting about the financial markets and U.S. politics,…