Ford Sells Mazda Shares...and others
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     lukematt
Member
Username: lukematt
Post Number: 5
Registered: 10-2008Rating: N/A
Votes: 0
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| | Thursday, November 20, 2008 - 01:55 pm: |  
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Lest the news media allow us to forget...
Ford buys shares in Mazda; Ford sells shares in Mazda (this week's news).
BMW bought British automaker Rover; BMW sold British automaker Rover.
Daimler-Benz bought Chrysler; Daimler-Benz sold Chrysler.
Ford bought Jaguar; Ford sold Jaguar.
WHY WOULD SUPPOSEDLY INTELLIGENT EXECUTIVES MAKE SUCH MAJOR ACQUISITIONS ONLY TO SELL THEM A FEW YEARS LATER?
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ohkoolnutz
Member
Username: ohkoolnutz
Post Number: 775
Registered: 10-2005
Rating: N/A
Votes: 0
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| | Thursday, November 20, 2008 - 05:41 pm: |
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Companies are run (merged and decoupled) based on the direction in the stock price instead of the intention to create value by delivering a good or service in a superior manner to their competitors.
Switching executive management every few years certainly doesn't help since every new person will interpret the outlook of the organisation in terms of finance and business opportunities in a different fashion leading to diverging decisions.
It's all talk, lots of paperwork and number juggling and no action in reality.
---
ohk
Lies, Damn Lies and Technical Analysis
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lukematt
Member
Username: lukematt
Post Number: 6
Registered: 10-2008Rating: N/A
Votes: 0
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| | Thursday, November 20, 2008 - 06:30 pm: |
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Thanks for your reply, ohkoolnutz.
>
> Companies are run (merged and decoupled) based on the
> direction in the stock price instead of the intention to
> create value by delivering a good or service in a
> superior manner to their competitors.
>
That's a mouthful  ...but an intelligent mouthful.
However, your comment does not include a positive or negative evaluation of this business strategy.
In addition, your words "based on the direction in the stock price" beg a "chicken-and-egg" question, specifically which comes first--the direction of the share price OR the acquisition?
I have too much experience in the stock markets. I say:
1. The share price of a company is often driven down so the company is cheaper for someone else to acquire.
2. A company is often acquired to drive up the share price of the buyer ("Hoorah, Ford now owns Jaguar!"), then normal shareholders get sucked in, then
** the share price crashes
** the acquired company is sold off again
(these last two items in either order)
>
> Switching executive management every few years certainly
> doesn't help since every new person will interpret the
> outlook of the organisation in terms of finance and
> business opportunities in a different fashion leading to
> diverging decisions.
>
Hmmm. A company doesn't have a board of directors with more tenure than the "switching executive management"?
Moreover, in the case of the automakers listed in my original message, we're talking about huge acquisitions.
>
> It's all talk, lots of paperwork and number juggling and
> no action in reality.
>
Yes! That's my point! There's something wrong here. Seriously wrong.
Apparently, companies do not care about producing and selling a product. Instead, they appear to be somebody's plaything for financial games.
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