Companies living shorter

Thinkski

From a BBC News story earlier this year:

The average lifespan of a company listed in the S&P 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today, according to Professor Richard Foster from Yale University.

This is a problem for shareholders. When an investor buys a share of stock in a company, there are three ways to make money from it — from dividends, from share buy backs, or by selling it to another investor for a higher price. Of the three, only profits from the first two come from the company, and only dividends are sustainable — once a company buys back its shares, you’re not making any more money off them.

Now back in the 1920s when the average lifespan of an S&P 500 company was 67 years, the…

View original post 195 more words

Advertisements

Your Comment:

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s