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Share prices

Consolidation has also created a pattern of aggressive and capital-intensive product acquisitions in recent years. These have, in turn, resulted in reduced credit ratings for many firms, stock share price declines, and most importantly, significant standing debts.This debt is further aggravated by plant closures and... [Pg.88]

At the same time, many formulators face increasingly difficult financial situations. Scotts leveraged buyout in 4986, as a prominent example, cost 2f f million (of which an investment-banking firm financed 490 million). This debt was blamed for the f f % fall in Scotts stock share price from June 4999 to June 2000. ... [Pg.89]

The plan will eventually prescribe a likely filing date for a marketing authorisation application (MAA) (product hcence). This date is vital and when the plan becomes public information, any slippage in the date is likely to impact on the share price of the company. Accordingly, senior members of the company must be confident that the date can be met. There will always be pressure to bring the date forward but this has a cost in resources, and risks damaging credibility with investors if the accelerated timelines cannot be met. [Pg.315]

Market capitalization The product of the number of shares of common stock outstanding and the share price. [Pg.55]

Sasol is now a public company and its shares are listed on the Johannesburg Stock Exchange. Despite the fluctuations in the price of crude oil, the commercial success of the process is reflected by the four-fold increase in the share prices since 1979. The reason for the viability of the process in South Africa is the combination of three factors ... [Pg.18]

In actual fact, however, shareholder value orientation is essentially about management decisions that create fundamental value. Fundamental value, defined as the sum of expected discounted cash flows available to shareholders, is by that definition a long-term concept. In theory, a company could pursue SHV without even caring about its share price (Fig. 2.1). [Pg.12]

Capital market valuation (share price) reflects aggregate assessment by current and prospective shareholders of future fundamental creation... [Pg.12]

Short-term profit volatility and analysts forecasts, then, have much less impact on a company s share price than is often assumed. Capital markets have a longer-term perspective. Furthermore, in an industry like chemicals, even if we assume a continuous improvement in fundamental performance, the attempt to generate an equally continuous, volatility-free growth in profits will be virtually impossible because of structural factors like feedstock volatility, currency exposure, and seasonal effects. Chemical companies should learn to live with earnings surprises and concentrate instead on communicating a concrete long-term strategy - and of course deliver appropriately on capital market expectations, which will be correctly set on this basis. [Pg.15]

Investor relations should therefore actively sell its product to its divergent sets of key customers - which requires a much more systematic approach, incorporating insights from product marketing. We do not claim that this approach boosts a company s share price above the fundamentally justified level, but it is the right approach to mitigate temporary deviations and ensure that the fundamental value is fully reflected in its capital market valuation. [Pg.24]

The simplest method of valuation starts from the obvious fact that to buy a company, one just has to buy all the outstanding shares. In principle, therefore, the value of the company is the number of shares multiplied by their individual value at any moment (the capitalization ). Almost certainly the offered price will have to exceed the current share price to persuade people to sell their shares (unless the market is falling, in which case they may be glad to offload them). There may also have to be a premium on the capitalization to allow for intangibles, such as goodwill . [Pg.279]

This valuation is sound for the particular sale/purchase situation, but is very dependent upon the immediately current share price. It has no direct link to any measure of an intrinsic company value, certainly not one that can be used to compare the sizes of two or more companies. [Pg.279]

A key figure in valuing a company is the ratio of its current share price (as an indicator of what the world thinks of it) to the total net profit (earnings) divided by the number of shares (earnings per share). This is called the PjE ratio (price/earnings), and is a major tool in comparing the performance of a company within its class of similar companies. [Pg.279]

The upside of this is that companies whose share-price performance continually outshines their rivals are able to use their own equity to fund their acquisitions, increasing their market power by getting competitors under their control. [Pg.16]

The third reason why management is increasingly focusing on shareholder wealth creation is that its own income has become more linked to share price development, for example, through the use of stock options (Fig. 2.2). [Pg.17]

Edge of the cliff the expectations of growth and profitabihty imphed by the compan/s share price are far beyond the best case scenario in the company s business plan. That means - assuming that the market will find out at some point - that the company is facing a revision of expectations, that is negative DEEP or underperformance in TRS. It could consider remedial action in its activities to prevent this but also, in the short term, it could use its inflated stock as acquisition currency. [Pg.22]

One very simple analysis for assessing future expectations is to calculate the split of a company s share price into the part which will be derived from the business as it is at present and the part which will come from organic growth. The value of the business as is can be interpreted as the (hypothetical) value of the business if all additional investments were stopped and all earnings were distributed to the owners. The - usually positive - difference between this value and the company s share price can be interpreted as the value of the company s growth options (Pig. 2.5). [Pg.22]

Fig. 2.5 Short and long term portion of share price for selected companies Including acquired pharmaceutical business of Monsanto Source Datastream, McKinsey analysis... Fig. 2.5 Short and long term portion of share price for selected companies Including acquired pharmaceutical business of Monsanto Source Datastream, McKinsey analysis...
Investors are particularly annoyed by negative surprises - about, for example, quarterly earnings. The share price of a major car manufacturer dropped by about 9 percent compared with the market overall in the three days following a negative earnings announcement by the company. Analysts at the time said that about one-third of the drop was purely due to bad communication. [Pg.25]

A rough estimate of how the chemical industry will develop in the near future reveals that, over the next decade, asset-leveraging changes will still be the bread and butter strategy. However, as mentioned above, we expect to see a parallel here with other mature industries, such as the automotive sector, where aU the cost-cutting and consoHdation in the world has not done a great deal to move share prices. Companies do need to create significant additional profits to maintain the level of profitability of 10 years ago in the future as well. [Pg.30]


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See also in sourсe #XX -- [ Pg.184 , Pg.185 ]




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