Because Genentech is a leading developer of cancer therapies, some doctors also fear that the company’s pricing plans for Avastin – around $8,800 a month – may encourage other companies to charge more for their own oncology drugs. – Alex Berenson
A vote of confidence from Cisco Systems can be very important to fledging technology companies, especially if they have initial public offerings on the horizon. – Alex Berenson
Enron had already collapsed and filed for bankruptcy protection by the beginning of 2002. But despite complaints from short sellers that corporations had used accounting gimmickry to inflate their profits, many investors thought the crisis at Enron was an isolated case. – Alex Berenson
Bigger spreads mean bigger gaps between what buyers pay and sellers receive. For example, a spread of 10 cents a share means that the buyer pays $100 more for 1,000 shares than the seller receives. – Alex Berenson
Soldiers willingly, sometimes foolishly, risk their own lives to keep their comrades out of enemy hands. – Alex Berenson
The difference between microeconomics and macroeconomics is a bit like the difference between biology and medicine. Knowing that certain genes increase the risk of cancer is relatively easy. Figuring out exactly which people will get sick, or how to cure them, is a lot more complicated. – Alex Berenson
Short sellers sell stock they have borrowed, hoping to buy it back later when its price has fallen. – Alex Berenson
As the Nasdaq soared in 1999 and early 2000, demand for many offerings far exceeded the supply of shares available at the initial offering price. – Alex Berenson
Insider trading is hard to prove. To be convicted, a person must have bought or sold a stock based on material information that is both unknown to the general public and likely to have had an important effect on a company’s stock price. – Alex Berenson
The details of the personal expenses that executives put on the company tab often are not known because loopholes in federal disclosure rules let publicly traded companies generally avoid disclosing the perks they give executives along with pay and stock options. – Alex Berenson
For decades, Wall Street has charged companies a standard fee of 7 percent to sell their shares to the public. – Alex Berenson
As they grow, companies saturate their markets, become more complex and difficult to manage, and face larger and more entrenched competitors. – Alex Berenson
It’s no secret that big institutional investors have a lot of advantages on Wall Street. They get the first chance to buy hot initial public offerings. They get to meet in person with companies’ managements. – Alex Berenson
Financial news services and other media organizations get press releases 15 minutes before they are distributed to the general public, fueling a furious competition among the news services to rewrite them for their subscribers during their window of exclusivity. – Alex Berenson
Higher productivity enables companies to increase sales without adding workers. Even if job markets tighten and wages rise, corporate profits can continue to climb as long as worker productivity is growing faster than overall wages. – Alex Berenson
Information technology departments must spend enormous amounts of time and money worrying about integrating big computer systems with billions of pieces of customer data. – Alex Berenson
Trust-me companies are companies whose financial results gallop ahead of their businesses, companies with seemingly perfect control over their quarterly sales and profits. Companies whose financial statements are loaded with footnotes: companies that short-sellers often attack but rarely dent. – Alex Berenson
Evidence of defendants’ lavish lifestyles is often used to provide a motive for fraud. Jurors sometimes wonder why an executive making tens of millions of dollars would cheat to make even more. Evidence of habitual gluttony helps provide the answer. – Alex Berenson
Fannie Mae is owned by shareholders but operates under a federal charter that exempts it from paying state or local taxes. As a result, many professional investors think the government would repay the debt that Fannie Mae had issued if the company could not, although Fannie Mae explicitly says that its bonds do not carry a federal guarantee. – Alex Berenson
When all the plants in a region are running at full steam, there is simply no way to get more power. – Alex Berenson
Whatever the potential pitfalls, banks are increasingly enthusiastic about venture capital, particularly in new companies with strong prospects in fields like health care and technology. – Alex Berenson
It is a truth universally acknowledged on Wall Street that original research is on life support. Serious research can be bad for business, as well as expensive. – Alex Berenson
Technology investment drove growth in the 1990s, both directly and by fueling a rising stock market that led to increased consumer spending. – Alex Berenson
With 950 reporters and 79 bureaus, Bloomberg competes to break news with Dow Jones, Reuters and Bridge News along with newspaper Web sites, dozens of smaller Internet sites, and even gossipy chat rooms. – Alex Berenson
Investors have been too willing to buy stocks with strong reported earnings, even if they do not understand how the earnings are produced. – Alex Berenson
Business cycles lengthened greatly during the 20th century, as central banks learned to manage national economies by raising and lowering interest rates. – Alex Berenson
Big fund companies have many ways to increase the returns of young funds that they want to promote. And at least one of those games involves popular offerings. – Alex Berenson
