8 janvier 2015

« The Shareholder Value Scam »

DB | Blog - Desert Beacon

If you guessed Hedge Funds, take your seat at the head of the class.  And, do the hedge fund and private equity firms deliver on Shareholder Value?  Not quite:

“…the most generous conclusion one may reach from these empirical studies has to be that “activist” hedge funds create some short-term wealth for some shareholders as a result of investors who believe hedge fund propaganda (and some academic studies), jumping in the stock of targeted companies. In a minority of cases, activist hedge funds may bring some lasting value for shareholders but largely at the expense of workers and bond holders; thus, the impact of activist hedge funds seems to take the form of wealth transfer rather than wealth creation.” [IGOPP pdf]

Note the last part? “Take the form of wealth transfer rather than wealth creation.” What have some of the more critical articles of the current economic situation been saying all along?  That in the matrix of Shareholder Value and Financialism, intensified by corporate compensation schemes, and further abetted by hedge fund activism – we have transfers of wealth without the actual creation of a better economy for everyone. Lire la suite