2014 has gotten off to a wild beginning…for the stock market. Despite hitting an all-time high closing value on January 15, the S&P 500 declined by 3.5% during the month of January (although it recovered to eclipse its all-time high on February 27).
Every fall, a great deal of attention is given to universities competing against one another. Events are contested across the United States and rankings are released after each week’s competition. Of course, I am talking about NCAA football games and Bowl Championship Series Rankings. However, the competition is just as fierce in the business school world.
On September 11, Twitter announced (through a tweet, naturally) it is considering an initial public offering. This announcement recalled memories of Facebook’s recent IPO, along with similar questions. Is this the beginning of another tech bubble? How does the market value social media enterprises? What impact will public company status have on an entrepreneurial venture? Will the demand for shares create a frenzy that causes technical market glitches on the first day of trading? However, one additional question will be raised that Facebook did not face: How profitable is Twitter?
In the past year, there have been few topics discussed more frequently at universities than the emergence of Massive Open Online Courses (MOOCs). MOOCs are online courses aimed at large-scale interactive participation and open access via the web. In addition to traditional course materials such as videos, readings and problem sets, MOOCs provide interactive user forums for students, professors and teaching assistants.
In late spring, corporate shareholders’ meetings and votes begin to dominate the business world. This year, the issue of separating the Chairman and CEO roles has received increased scrutiny because of a highly-publicized vote at J.P. Morgan over the fate of its Chairman/CEO, Jamie Dimon. Often, these proposals and the resulting votes reflect shareholder dissatisfaction (in this case, over the infamous “London Whale” trading scandal) rather than issues related to performance of the incumbent or a desire for good governance practice.
During the first quarter of 2013, stock prices surged and cash balances continue to increase. On the face, corporations are looking healthier than they have in a long time. Given these dynamics, it would appear to be a good time for corporations to use their cash to retire debt, increase capital expenditures, create employment opportunities, or provide a return to their shareholders. However, the U.S. tax laws discourage this activity through a process known as repatriation.
At the end of 2012, many investors received an unexpected gift…special dividends paid by companies in anticipation of changes in the income tax laws. Because of the so-called “dividend cliff”, 483 companies paid a new or increased dividend on a “one-time” basis or paid their 2013 dividends earlier than planned (prior to December 31, 2012). This is the highest number of special dividends paid since 1955 and almost four times the number paid in 2011.
As the calendar moves through the month of October, the rites of autumn surround us: leaves change colors (in some parts of the United States!), the college football season begins taking shape…and companies release their third-quarter earnings.
An article in The Economist shed some potential insight into what motivates target companies (or “sellers”) in an acquisition opportunity. Because acquisitions often result in a loss of power (or employment) for the target’s CEO, the personal economic impact of the acquisition to the CEO would seem to matter.
June was a busy month for white-collar crime. Former McKinsey & Company managing director Rajat Gupta was convicted on four felony counts of conspiracy and securities fraud, and financier Allen Stanford received a 110-year prison sentence for running a Ponzi scheme involving over $7 billion. Somewhat lost in the traffic of these two high-profile cases was the nine-year sentence Garrett Bauer received for profiting from illegal insider trading. However, I noticed this one.