Gulf Rozee
There are numerous ways in which to promote your business and today my challenge was to see how many I could come up with that were either zero or low cost. After a brief brainstorming session, I was surprised to see how many I’d managed to come up with and they are probably just the tip of the iceberg. They are all tried and tested methods, all of which can work though the results may also depend on the business you are in. Here are my top 7: Read More »
Dark Secret of Our Latest Financial Crisis
While the latest mortgage fiasco was very damaging to the US economy, it is only part of the story told by the media. An equally dangerous practice was taking its toll on businesses: publicly traded companies buying back shares of their own stock in excess to drive stock appreciation.
In some cases, buy-backs can be beneficial. For instance, if the market significantly undervalues a corporation’s stock and management knows they have winning products and services in the pipeline, it could make sense for them to buy back shares of their stock. It is a way for a company to invest in itself and reward shareholders. Read More »
Dark Secret of Our Latest Financial Crisis
While the latest mortgage fiasco was very damaging to the US economy, it is only part of the story told by the media. An equally dangerous practice was taking its toll on businesses: publicly traded companies buying back shares of their own stock in excess to drive stock appreciation.
In some cases, buy-backs can be beneficial. For instance, if the market significantly undervalues a corporation’s stock and management knows they have winning products and services in the pipeline, it could make sense for them to buy back shares of their stock. It is a way for a company to invest in itself and reward shareholders.
On the other hand, the practice can serve to over inflate a company’s earnings. Buying back stock drives up the price and gives the appearance of greater performance. Consequently, more investors will be willing to purchase the stock. It ends up working much like a pyramid scheme. For example, the average investor sees a company buying back shares at $50 in 2007, gets excited for that company’s prospects, and eventually the stock rises to $70 on little more than false confidence. The company then looks like its performing well and investing in itself. Read More »