I think that BBRY and APPL are prime examples. Companies and consumers try to manage their risk of someone they do business with going bankrupt or becoming otherwise distressed (or even losing a dominant market position). Stock price is used as a proxy for this by some.
Indeed, those were the two I was thinking of as well. On the consumer side, I wonder how much the subconscious input from stock price leads to popularity? After all, people now claim AAPL is now falling behind in innovation, but did such thoughts dominate before or after AAPL's iphone 5 launch (the peak)?
Before my time during the dot-coms, I remember hearing of how AOL, despite its accounting discrepancies managed to buy Time Warner (http://news.cnet.com/2100-1023-235400.html) for $160B. No doubt, AOL's soaring stock price allowed it purchase a far older and more profitable company.
I think that BBRY and APPL are prime examples. Companies and consumers try to manage their risk of someone they do business with going bankrupt or becoming otherwise distressed (or even losing a dominant market position). Stock price is used as a proxy for this by some.
ReplyDeleteIndeed, those were the two I was thinking of as well. On the consumer side, I wonder how much the subconscious input from stock price leads to popularity? After all, people now claim AAPL is now falling behind in innovation, but did such thoughts dominate before or after AAPL's iphone 5 launch (the peak)?
ReplyDeleteBefore my time during the dot-coms, I remember hearing of how AOL, despite its accounting discrepancies managed to buy Time Warner (http://news.cnet.com/2100-1023-235400.html) for $160B. No doubt, AOL's soaring stock price allowed it purchase a far older and more profitable company.