“I will say financial engineering is really not a way to create value for your shareholders or yourself or whoever your owners happen to be. Companies that buy or sell or spin off because they think the market doesn’t understand their multiple and so forth I think are really missing the point. I think at the end of the day, what really matters is running your company, building revenue, building cash flow, and ultimately that will create value and that value will be recognized. And spending your time getting lost in financial engineering is a real mistake.”
Who said this:
a) Steve Ballmer
b) Bill Gross
c) Henry Blodget
d) Steve Rattner
e) Warren Buffett
f) Barry Diller
g) Rupert Murdoch
h) John Malone
i) Sumner Redstone
Get the answer here or here. And see our proposal for a financial engineering deal that would triple a company’s market cap here. Mind you, that was not much of a financial engineering proposal as much as a major shift in strategy, but still.
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WatchMojo NewsletterOn the one hand, distinguished financiers such as Bill Hambrecht are one step ahead of others… on the other hand, hearing them say that everything will be fine does suggest an element of being, you know, out of touch. Anyway, here’s an interview Om Malik did with Mr. Hambrecht, founder of legendary tech investment bank Hambrecht & Quist…
Now Om, maybe you can hit up True and buy some microphones!
I was scrolling through some old articles and came across some of the accompanying images you see alongside the articles. This article - dated September 5th 2008 - has a picture, with the following text and image caption:
Elizabeth Rose, top, and Michael McDonnell, both of Lehman Brothers MarketMakers, watch early trading from the floor of the New York Stock Exchange, Friday, Sept. 5, 2008, in New York. Selling swept across Wall Street for a second straight session on news that the economy shed jobs for the eighth straight month in August and at a faster-than-expected pace. (AP Photo/Henny Ray Abrams)
Then less than 2 weeks later: this article, with the following caption and text:
Elizabeth Rose, a specialist with Lehman Brothers MarketMakers, works her post on the trading floor of the New York Stock Exchange, Monday, Sept. 15, 2008. A stunning reshaping of the Wall Street landscape sent stocks down sharply Monday, but the pullback appeared relatively orderly _ perhaps because investors were unsurprised by the demise of Lehman Brothers Holdings Inc. and relieved by a takeover of Merrill Lynch & Co. (AP Photo/David Karp)
Now, what is really amazing is the fact that this second picture was taken on Monday… at a time when traders are probably unloading Lehman stock en masse… what a painful day for the workers of the company. Hopefully they can all come out stronger.
1. Borrow short
2. Over leverage
3. Long term investment horizon.
From the man who has calling this for some time now, NYU Stern Professor Nouriel Roubini.
