Is this financial engineering at a high level to please the market, or is there something underlying here?
Analysts are posting positive news. Somewhat confusing...
14 replies (most recent on top)
Driving stock price at the expense of employee welfare or public good is NOT a legal requirement of a public company.
From Dodge v. Ford in 1916 (https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.):
"A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end and does not extend to a change in the end itself, to the reduction of profits or to the nondistribution of profits among stockholders in order to devote them to other purposes."
Normal as the market always sees layoffs as positive for the company who is reducing their run rate expenses, increasing margins, and overall being more fiscally responsible to stakeholders.
Welcome to capitalism! :-)
https://www.thelayoff.com/post/@ejx+1u2dKShl
Driving stock price at the expense of employee welfare or public good is NOT a legal requirement of a public company. It is an idea that gained popularity through Milton Friedman and the Chicago School of Economics. It’s time to re-visit this idea. As long as companies are transparent about how they’re managing and their guiding principles, they're good.
Many employees are shareholders too. The mental gymnastics you have to go through to justify this treatment from the company & our over compensated executives is a trip.
This is part of the reason employees rush to sell any stock they get their hands on. (okay, so one reason)
Treating employees well shows integrity, same with customers. Companies with high integrity have a competitive advantage (according to Warren Buffett & others with decades of business experience...).
Many employees are shareholders too. The mental gymnastics you have to go through to justify this treatment from the company & our over compensated executives is a trip.
This company has no integrity, that is one large reason that customers don't want to give us their money any more.
Because "maximum profits".
Tech desperately needs unions.
Publicly traded can be focused on employees, but Cisco is not. Just stop the lies about this being a great place to work!
Because that's the way Cisco does things. Employees are pawns to the ELTs.
That's why the LR was leaked last Friday to proce in the negative but limit damage because of the weekend. The positive forward looking trend is driving the uptick.
OP, it's not confusing at all. Publicly traded companies are expected to constantly grow profit, which should theoretically drive the stock price upward. Investors expect that by trimming costs by $1B, and assuming sales and expenses are in line with guidance, it should result in more profit, better margins, etc, which drives up the value of the stock.
Publicly traded companies aren't rewarded by shareholders for how they treat employees. In fact, if shareholders think the company was treating employees in a way that conflicted with driving value for shareholders, they would sue the company.
Deadwood or overlay units
positive because of cost cutting. cisco needs to remove obtrusive middle management - esp. quite a few people managers aka cheerleaders.
Have a look at the declining trend of product orders past few Qs