Tesla Inc. shares have doubled in three months, while General Electric Co. shares are up 44 percent, The Wall Street Journal reported. The pair are the two most valuable loss-making companies, part of a shockingly high proportion of listed companies that have been losing money — despite, or perhaps because of, the long bull market. While Tesla and GE couldn’t be more different, they are exemplars of two trends driving the rising number of loss makers. Tesla shows a desire by investors to back disruptive companies as they build their sales. GE represents a growing number of companies struggling to make money from traditional businesses — although GE bucks a third trend, which is that many of the unloved losers are small companies being squeezed by the growth of giant corporations. The combination of forces has pushed the percentage of listed companies in the U.S. losing money over 12 months to close to 40 percent, its highest level since the late 1990s outside of post-recession periods. This time there’s no recession, and stock market indexes are at or near record highs. That sounds scary, although it’s mainly worrying for investors in smaller companies.

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McKinsey Faces Criminal Inquiry Over Bankruptcy Case Conduct

Submitted by ckanon@abi.org on Mon, 2019-11-11 09:04

McKinsey & Company, the elite consulting firm that advises many of the world’s largest and most powerful institutions, is facing a federal criminal investigation of its conduct advising bankrupt companies, the New York Times reported. Prosecutors and other Justice Department officials in New York and Washington are trying to determine if McKinsey used its influence over insolvent companies in violation of the rules of chapter 11 bankruptcy by quietly steering valuable assets to itself or favoring its own clients over other creditors. Gary Pinkus, McKinsey’s North America chairman, said the firm received an inquiry from the U.S. Attorney’s Office in Manhattan last year, and addressed it. “Since then, we have received no additional requests from the U.S.A.O.,” he said. In the past two weeks, investigators have conducted interviews about McKinsey’s actions in the bankruptcies of at least two companies, Alpha Natural Resources, a coal producer, and SunEdison, an alternative energy company, said one of the people, who was questioned by F.B.I. agents. The judges overseeing both those cases have already suggested that questions over McKinsey’s conduct could best be resolved by the Justice Department — either with civil actions or criminal charges. In addition to the previously unreported criminal investigation, an investigation by the Office of the U.S. Trustee, a division of the Justice Department that polices the conduct of companies in the bankruptcy system, is underway.

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