A stock buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors. When a company repurchases its shares, it can purchase the stock on the open market or from its shareholders directly. In recent decades, share buybacks have overtaken…
Modern Portfolio Theory (MPT) alleges that well-diversified securities and targeted cash levels will insulate investors during market downturns. Folks stopped talking about MPT after the 2008 crash, but the discussion kicked up again, right on schedule, when financial markets roared back to life at the start of the last decade. In fact, Wall Street did everything…
World markets have been pummeled overnight, bringing CME index futures to a crashing halt while U.S. equity funds forecast that the S&P 500 and Nasdaq 100 will open nearly 10% lower on Monday morning. Investors who have been told repeatedly not to panic in a downturn aren’t heeding the advice, which is contributing to margin…
Global markets plunge despite Fed stimulus plans U.S. markets trip circuit breakers as they fall 7% at open Bank stocks punished as investors worry about liquidity concerns U.S. markets plunged 7% as the market opened Monday, tripping circuit breakers for the third time in a week as concerns around the impact of the coronavirus grow….
What Is a Mandatory Convertible? A mandatory convertible is a type of convertible bond that has a required conversion or redemption feature, rather than the convertible feature being an option. For these bonds, either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. Key Takeaways…
As COVID-19 continues to wreak havoc across the world, China appears to have passed the peak of its coronavirus outbreak, with the country crediting its strict isolation measures for curbing the disease’s spread. Last week, a Nomura report revealed that 62% of the firms hardest hit by the health crisis had resumed work as of…
Despite the significant market decline on Thursday, March 12, shares of Amazon.com, Inc. (AMZN) traded around their annual pivot for 2020 at $1,771.99. The stock set its all-time intraday high of $2,185.96 on Feb. 11 and then fell into bear market territory at its March 12 low of $1,675.00, which is just above its 52-week…
Capital is the cash obtained through some form of financing. The two primary ways that companies finance operations are with debt and equity. Depending on the nature of the business, some companies may require more debt than equity, or vice versa. Capital is a critical component of growing business operations. It is what keeps everything…
Exchange-traded funds (ETFs) have become wildly popular in their relatively short history because they offer investors large and small the chance to own a diversified portfolio while keeping fees low and trading opportunities flexible. As the exchange-traded fund market continues to scale, multiple financial technology (fintech) companies and online discount brokers and trading platforms such…