Comments for Blog Review 575 at http://www.adamsmith.org , comment 1 to 5 out of 5 comments http://www.adamsmith.org Fri, 05 Dec 2008 07:57:53 +0100 FeedCreator 1.7.3 http://www.adamsmith.org/blog/misc/blog-review-575-200804221271/#comment-69 http://www.global-economist.com Thanks - Global Economist Tue, 22 Apr 2008 16:33:30 +0100 http://www.adamsmith.org/blog/misc/blog-review-575-200804221271/#comment-68 If a company is selling stock, there is more to it than whether the companies underlying common stock is undervalued or overvalued. Selling stock is one of several options in which companies raise cash. What they do with the cash is their option. Unfortunately, these “jokers” have mismanaged their assets so much that they need the cash to cover their bad bets. Typically, follow on offerings such as the banks are doing these days are not a good sign. The decision on how to raise cash is based on the Weighted Average Cost of Capital for the firm. Essentially, it has now become cheaper for these distressed companies to sell stock to raise capital vs. issue bonds or take out loans. The opposite happens when companies are flush with cash and have little to no projects to improve the company’s earnings...they buy back stock or issue a higher dividend. Hopefully, we will have learned from our mistakes. Is this likely, no, but there is always hope. Oh and BTW regulation will not fix this problem. “Old men’s rules are no match for young men’s ingenuity.” Christopher Aber - Global Economist Tue, 22 Apr 2008 16:28:22 +0100 http://www.adamsmith.org/blog/misc/blog-review-575-200804221271/#comment-67 When a website with a story about a funny slogan appears to be too good to be true - I run over to Snopes to see what they say about it. http://www.snopes.com/business/deals/carnation.asp - Ian Mansfield Tue, 22 Apr 2008 16:15:06 +0100 http://www.adamsmith.org/blog/misc/blog-review-575-200804221271/#comment-66 Thanks for link! - Mark Wadsworth Tue, 22 Apr 2008 15:25:50 +0100 http://www.adamsmith.org/blog/misc/blog-review-575-200804221271/#comment-64 Thanks for link! - Mark Wadsworth Tue, 22 Apr 2008 14:48:30 +0100