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From MarketWatch
CAMBRIDGE, Mass. (MarketWatch) — A year after the Facebook IPO the media bellyaching about all the things the social media company did wrong is relentless.
“Facebook, One Year Later: What Really Happened in the Biggest IPO Flop Ever,” reads a headline in The Atlantic. “Missed out on the Facebook IPO and couldn’t be happier,” reads another on CNNMoney. And from Forbes: “Facebook Year One: Fighting Back from an IPO Flop.” Read More
MIT Sloan Prof. Thomas Kochan
From off-shoring good jobs to the great and growing income divide, finance-driven decision-making has long been at the core of many of our economic problems. It’s not that financial analysts and operatives are necessarily evil or uncaring – rather, they believe they have a fiduciary responsibility to generate maximum returns for their funds, even when the results have worker and society-unfriendly consequences.
Changing this mindset has proven a tough nut to crack even for union pension fund managers, who are aware of the social consequences of investment decisions. But there are glimmers of hope and interest. On June 7, for example, some of the nation’s largest institutional investors and the biggest single pension fund investor – the California Public Employees’ Retirement System (CALpers) — will hold a conference to explore ways to transform socially and environmentally sustainable investment criteria from a perceived liability to an asset. CALpers has a commitment to responsible investing – for example, it calls for neutrality in union organizing – but it has never figured out how to make such policies systemic. Read More
Visiting Asst. Prof. David McLean
The first published paper that I know of to document that returns are predictable across stocks was published in 1972. In that paper, the authors showed that price level predicts returns in that low priced stocks tend to have higher returns than high priced stocks. Since then, this has been an active research area with numerous academic papers showing that various strategies based on observable firm traits (e.g., size, past performance) can predict returns across stocks. Read More
MIT Sloan Prof. Kristin Forbes
What began as a singular sovereign debt problem in Greece in 2009 quickly spread to the rest of Europe. First Ireland; then Portugal and Spain and Italy. Today—only three years after the first signs of trouble—virtually all Europeans have felt the destructive effects of the euro zone turmoil, and its impact is being felt around the world.
Contagion, a phenomenon where financial tumult in one country or region spreads to another country, is now a fact of life. The globalization of finance has, in many ways, made contagion inevitable. The world has become much more integrated through trade, investors, and banks, and these ties have caused countries’ financial markets to move together more closely during good times and bad. Read More
MIT Sloan Asst. Prof. Andrey Malenko
The market for corporate control is staggeringly large. In 2007 alone, the value of M&A transactions in the world was $4.8 trillion. Even in the wake of the economic crisis, it’s still a very active market with many complex features.
One of these features is the type of bidders involved in a corporate takeover auction. They fall into two categories: Strategic bidders such as competitors who are looking for long-term operational synergies, and financial bidders such as private equity firms and divisions of investment banks. Financial bidders are looking for financial synergies as well as for undervalued companies with the potential to improve operations.
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