Class Warfare Blog

May 20, 2014

Tail Trying to Wag Financial Dog . . . Again

The Anglo-Swedish drug company AstraZeneca has rejected the £69,ooo,ooo,ooo takeover bid of U.S. rival Pfizer. You would think that would be the end of things, but no. AstraZeneca shareholders are up in arms over the rejection of the deal.

Do the shareholders know the intricate details of the deal? No.

Do the shareholders know whether the deal will be good for AstraZeneca’s brand? No.

Do the shareholders know what the firm’s management’s full thinking was? No.

So, what did the shareholders know?

They knew that they would have made a major profit on the value of their shares.

So, as far as they are concerned, any deal that makes them money is a good deal? Or are they believers in the lie that the only reason for the existence of a corporation is to create value for its shareholders?

Whatever the case, it is extremely bad management on somebody’s part whenever the shareholders decide they want to run things. In this case it seems to be bad management on the part of the shareholders.

Ah, the stock market. Why do we still think this is a proper way for business to take place?

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2 Comments »

  1. Pfizer hasn’t patented a new product since 1988/89. I’ll let that speak for itself.

    Comment by john zande — May 20, 2014 @ 11:33 am | Reply

    • Wow! Now that’s an investment in R&D! (And another reason that the stock market is not serving the needs of society.)

      On Tue, May 20, 2014 at 11:33 AM, Class Warfare Blog wrote:

      >

      Comment by Steve Ruis — May 20, 2014 @ 12:58 pm | Reply


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