In the last 10 years or so I have seen a move of board of directors and senior management raiding balance sheet.
The two ways are;
Rich guys via hedge funds buying enough shares to appoint directors
Performance contracts drawn soley for reasons of short term gains
So my own speculations is that once this done the end result is guaranteed
Management needs to deliver ao they manipulate balance sheet to get good ratios
Think about stockbuy backs last years were 1.2 trillion
Meaning the shareholder is getting capital back because the business cannot find better returns ro invest these funds. There is less spent in R&D, employee and efficiency infrastructure or platforms
Cost cutting to a point of affecting efficiency
Giving unreasonable dividends instead of reinvesting profits
High turnovers in CFO positions
CFO instead of CEO or COO becoming the face of organization internallly while externally Ceos are just PR guys..
More to come
What you think?
Wall Street gains have been driven by stockbuy backs .. corporate buy backs currently control 52 percent of the market. I saw an amazing graph by Goldman Sachs on this. Mutual funds have sold and their are negative 32 percent yeartodate ..it is only efts and corporate buybacks buying
https://www.cnbc.com/2018/08/06/companies-set-to-buy-back-1-trillion-worth-of-shares-this-year-to-kee.htmlI am yet to think of any business reason other than metrics manipulation of these strong buybacks that have beem going strong for a decade
Topic: There is something rotten in corporate America (Read 863 times)