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.
Benjamin Franklin once said that “in this world, nothing is certain but death and taxes.” During the presidential election cycle, we have heard proposals ranging from flat taxes to the “Buffett Rule” to Herman Cain’s 9-9-9 plan.
A recent Wall Street Journal article along with the release of Facebook’s S-1 filing has raised a huge question in the marketplace: What is the social media giant worth?
A critical element of our mission at Mays Business School relates to preparing our students for a global society. As I recently embarked on a trip to teach in a Mays executive program in Lagos, Nigeria, it struck me just how global a state university in College Station, Texas can become.
Since his untimely death on October 5, 2011, much has been written about Steve Jobs and the legacy he created as an innovator and leader. His impact on our lives has led many to compare him to Henry Ford and refer to him as the “Michelangelo” of our times. In fact, a Google search using the terms “Steve Jobs Michelangelo” reveals over 1 million results!
Much has been made of the significant amounts of cash being held on Corporate America’s balance sheets. While this trend has been observed for some time, this issue reached a crescendo when Apple released its second quarter reports, showing a total of over $76 billion in cash and liquid investments.