How management compensation can cause mergers to fall short for investors

Corporate mergers are highly celebrated events in the investment world, mainly because of the way that they will often come with a purchasing premium for shareholders to pocket. However, long-term investors sometimes grumble at the implications of an acquisition because of the way in which they can actually stand to degrade the long-term value of […]

From Save Sonic ™ Blog

How a poison pill plan can improve a personal investor’s portfolio

In the event that company should begin implementing active defense mechanisms to fend off a hostile takeover attempt (such as a poison pill plan), investors are placed in the middle of a fairly ugly situation. Between the dilution impacts, declining share prices, and reduced fundamental integrity of the target company’s balance sheet that results from […]

Using active defense to deflect a hostile take-over acquisition

Aside from using pre-determined corporate policy mechanisms to protect a company from being the target of a hostile take-over, companies have access to a variety of ‘active defense’ tools that they can use to discourage a acquisition from taking place. While these mechanisms are often extremely damaging to a company’s overall share-price, they will usually […]

Corporate takeover defence pre-emptive actions “golden parachute”

Having spent the last two articles describing how managers can take advantage of acquisition transactions to bolster their personal incomes at the expense of public investors, we can now start to take a look at how it is that companies will include a variety of corporate governance mechanisms to protect themselves from predatory acquisitions. While […]

How managers can stuff their paychecks with goodwill during an acquisition

Goodwill represents a particularly convoluted aspect of corporate take-overs that can often misrepresent the nature of a transaction. Between its fundamentally intangible nature, combined with the way financial statements treat it as being a physical asset, its ability to bolster the size of a company’s balance sheet, or even create losses on an income statement […]

How management compensation can cause mergers to fall short for investors

Corporate mergers are highly celebrated events in the investment world, mainly because of the way that they will often come with a purchasing premium for shareholders to pocket. However, long-term investors sometimes grumble at the implications of an acquisition because of the way in which they can actually stand to degrade the long-term value of […]