{"content":{"sharePage":{"page":0,"digests":[{"id":"48148330","dateCreated":"1323829745","smartDate":"Dec 13, 2011","userCreated":{"username":"slfountain","url":"https:\/\/www.wikispaces.com\/user\/view\/slfountain","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/48148330"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"summary","description":"Loved that the quiz was first. The examples of the uncertainty and consumer behavior were good, especially the explanation about the degrees of risk. She also had an interesting use of screening using employers as an example, especially the \u201cgood old boy network\u201d. I thought I was the only one who used the phrase.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47829682","dateCreated":"1323362889","smartDate":"Dec 8, 2011","userCreated":{"username":"kfraymer","url":"https:\/\/www.wikispaces.com\/user\/view\/kfraymer","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47829682"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"Nice Use of Real-World Examples","description":"You did a nice job of covering this topic. I would guess this was somewhat difficult since the majority of these topics were covered late in the semester. I particularly liked your use of real-world examples regarding tactics for risk averse consumers like samples, coupons, comparison advertising, money back guarantees, warranties. I sometimes find economics topics to be somewhat abstract and real-world examples help clarify.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47558982","dateCreated":"1323051257","smartDate":"Dec 4, 2011","userCreated":{"username":"Matt_Gray1","url":"https:\/\/www.wikispaces.com\/user\/view\/Matt_Gray1","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47558982"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"Moral Hazard and the Financial Crisis","description":"A long article discussing moral hazards involved with the recent financial crisis.
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\nhttp:\/\/www.cato.org\/pubs\/journal\/cj29n1\/cj29n1-12.pdf<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47036420","dateCreated":"1322429950","smartDate":"Nov 27, 2011","userCreated":{"username":"kmwesterfiel","url":"https:\/\/www.wikispaces.com\/user\/view\/kmwesterfiel","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47036420"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"News article about Asymmetric Information ","description":"Here's an editorial discussing why asymmetric information, among other factors, is more to blame for the European market's current condition than the market itself. Hope it helps!
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\nhttp:\/\/www.neurope.eu\/article\/dont-blame-markets<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47030098","dateCreated":"1322419598","smartDate":"Nov 27, 2011","userCreated":{"username":"RWentink","url":"https:\/\/www.wikispaces.com\/user\/view\/RWentink","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47030098"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"Signaling Behavior at Netflix","description":"According to a Wall Street Journal article on Wednesday, November 23rd. Netflix stock fell to its lowest point in a year, a day after it \u201craised concerns about its cash level and said it will post a loss for 2012.\u201d The article stated that Netflix would sell 400 million in common stock and convertible bonds to raise cash.
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\nThe statement made me think of a chapter we just completed in our Managerial Finance course, in which the authors discussed signaling theory in relation to firms raising funds. According to the theory, the vehicle used to raise funds signals management\u2019s opinion of the firm\u2019s overall prospects. Since analysts, investors and potential investors do not have perfect information, they have to glean what they can from the behavior of the firm and its spokespeople.
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\nAccording to the text, \u201cthe announcement of a stock offering is generally taken as a signal that the firm\u2019s prospects as seen by its own management are not good; conversely, a debt offering is taken as a positive signal.\u201d In Netflix\u2019s case, they are splitting the difference, raising $200 million through the sale of common stock, and $200 million in convertible bonds.
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\nNormally a firm would try to spin the offering as positively as possible. The statements in the article by Netflix spokesperson Steve Swasey seem odd. Issuing debt is viewed as a positive signal when it is done in support of a potentially profitable project, whose benefits management would rather not share with a larger pool of stockholders. However, according to the Wall Street Journal, Steve Swasey stated that the company doesn\u2019t need more cash, \u201calthough it\u2019s always nice to have more money than you need,\u201d and that the company had no immediate plans to use the funds.
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\nAccording to an analyst with Janney Capital Funds, Tony Wible, "Investors need to ask why one of largest subscription-based platforms in the world needs capital," he said. "The lack of profitability on almost 23 million global streaming subs suggests that this business may not be as lucrative as the bulls believe."
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\nLike Mr. Wible, the signal some stockholders heard was to sell now, and the stock dropped roughly 6% the next day. The outside world may be wondering whether Netflix is more desperate than previously thought, as a result of its actions and statements like the ones above.
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\nAccording to Yahoo Finance, in July the stock traded at roughly $300 a share, and is now down to just under $64. Caveat emptor<\/em>!
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\nhttp:\/\/online.wsj.com\/article\/SB10001424052970204443404577054040663461880.html<\/a>
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\nhttp:\/\/www.marketwatch.com\/story\/netflix-raises-400m-in-common-stock-and-notes-2011-11-22<\/a>
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\nMichael C. Ehrhardt and Eugene F. Brigham, Financial Management: Theory and Practice, 13th edition. Pg. 615.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"46724978","dateCreated":"1321881498","smartDate":"Nov 21, 2011","userCreated":{"username":"Hornbaker","url":"https:\/\/www.wikispaces.com\/user\/view\/Hornbaker","imageUrl":"https:\/\/www.wikispaces.com\/user\/pic\/1316446772\/Hornbaker-lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/46724978"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"Moral Hazard","description":"This might be helpful.
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\nhttp:\/\/ingrimayne.com\/econ\/RiskExclusion\/Risk.html<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"46296588","dateCreated":"1321321742","smartDate":"Nov 14, 2011","userCreated":{"username":"aeroederer","url":"https:\/\/www.wikispaces.com\/user\/view\/aeroederer","imageUrl":"https:\/\/www.wikispaces.com\/user\/pic\/1318295145\/aeroederer-lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/46296588"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"Our pages","description":"Your page is very well written and I like how you continue to give real-world examples for each term.
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\nOur topics are shared in many aspects-- I have risk and everything that is encompassed in that-- and you've made points that continue to help me know more about my own topic!","replyPages":[{"page":0,"digests":[{"id":"46451540","body":"Thank you!","dateCreated":"1321471851","smartDate":"Nov 16, 2011","userCreated":{"username":"MJWagner74","url":"https:\/\/www.wikispaces.com\/user\/view\/MJWagner74","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"}}],"more":0}]},{"id":"46106540","dateCreated":"1321028689","smartDate":"Nov 11, 2011","userCreated":{"username":"TChristofaro","url":"https:\/\/www.wikispaces.com\/user\/view\/TChristofaro","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/46106540"},"dateDigested":1532762618,"startDate":null,"sharedType":"discussion","title":"Risk","description":"The firms also like to subcontract a lot of services to pass the risk. Most firms require several bids to ensure they are receiving the best price for services.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"44215748","dateCreated":"1318548674","smartDate":"Oct 13, 2011","userCreated":{"username":"maysen1975","url":"https:\/\/www.wikispaces.com\/user\/view\/maysen1975","imageUrl":"https:\/\/www.wikispaces.com\/user\/pic\/1317587185\/maysen1975-lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/44215748"},"dateDigested":1532762619,"startDate":null,"sharedType":"discussion","title":"Risk Adverse","description":"I find that I am a risk adverse consumer -- as you pointed out if I'm out of my comfort zone I will pick a chain instead of a small local store.
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\nI noticed on your topic it also listed adverse selection -- a good example is that people more likely to have a claim are more likely to purchase insurance. This causes insurance companies to end up with more "bad" risks and can affect the rates for everyone.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"43899606","dateCreated":"1318113694","smartDate":"Oct 8, 2011","userCreated":{"username":"Steve_Speece","url":"https:\/\/www.wikispaces.com\/user\/view\/Steve_Speece","imageUrl":"https:\/\/www.wikispaces.com\/user\/pic\/1316392514\/Steve_Speece-lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/43899606"},"dateDigested":1532762619,"startDate":null,"sharedType":"discussion","title":"Prediction Markets","description":"Might find this of interest... A few years ago, DARPA began a program to leverage the predictive properties of free markets for strategic intelligence purposes. Analysts were given virtual capital to trade against various threat scenarios. The analysts who made accurate predictions gained more capital to invest into more predictions. The inaccurate analysts went bankrupt very quickly. Payoffs were such that contrarian investing was rewarded when correct. The prediction market was able to outperform most analytical sections in accuracy by wide margins. Unfortunately there were some vocal critics in congress and the program had to be shut down.
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\nhttps:\/\/www.cia.gov\/library\/center-for-the-study-of-intelligence\/csi-publications\/csi-studies\/studies\/vol50no4\/using-prediction-markets-to-enhance-us-intelligence-capabilities.html<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]}],"more":false},"comments":[]},"http":{"code":200,"status":"OK"},"redirectUrl":null,"javascript":null,"notices":{"warning":[],"error":[],"info":[],"success":[]}}