Showing posts from October, 2011

What Would You Have Done?

Last week, I encountered a problem with one of my students. I wasn’t sure what I ought to do so I turned to my colleagues here at the Robins School of Business and emailed them a cry for guidance. ** To: Fellow Faculty Members For the first time in (at least) 25 years, I had a student sleep through a test. The test was at 10:30 on Friday and I got an email at 12:30 that he had stayed up late on Thursday studying and just slept through his alarm. He was hysterical, begging for mercy. If you have ever had this happen, what do you do that makes sense? Here are the factors: 1 – I absolutely do not want to set a precedent that I cannot live with in the future. I don’t want “I slept through the alarm” to become a common occurrence in my classes. 2 – I don’t want to ruin the young man’s life. He just overslept – he didn’t rob a bank. I’ve overslept. 3 – There were students who showed up for the test and failed (and will probably fail the course). I’m very concerned about bei

All Time Top Ten

This blog went over a total of 40,000 pageviews about two days ago. I continue to be amazed by that number. However, I find that when a teacher contacts me about my writings, they almost invariably make the statement “Someone told me about your blog on teaching.” So, as always, I want to thank you for passing along the message. My guess is that I would have had about 4 pageviews in the last 22 months without your willingness to tell others. Thanks!!! That’s one of the great things about the Internet, people can spread the word. As I occasionally do, here are my all time top ten blog entries based on readership. I am not sure they are the most interesting or the most clever or the most innovative. But the most people have read these ten. 1 – What Do We Add? – July 22, 2010 2 – What the Catcher Tells the Pitcher – August 21, 2011 3 – Big Mistakes – March 26, 2011 4 – Introduction – Teaching (Financial Accounting) – January 7, 2010 5 – Need Some Inspiration? – September 13

The Missed Red Flags on Groupon

The Groupon case is an interesting look at IPOs and how the investment banks that underwrite them suffer from very real conflicts of interests. Groupon’s initial filing for an IPO valued the company at around $30 billion, but after the SEC found accounting and disclosure problems analysts decreased their valuations to as low as $10 billion. The article below raises an interesting question. If the investment banks (Morgan Stanley, Goldman Sachs, and Credit Suisse) fought so hard to win the underwriting mandate for the IPO, shouldn't they have caught these warning signs? Or as former SEC chief accountant Lynn Turner said, have they simply become sales and marketing agents? The article suggests that the higher fees associated with a higher valuation could be a reason the underwriters turned a blind eye. But shouldn't they also act in the interest of their institutional clients and the general public? The underwriting firms seemed to have turned a

Chelsea FC Lose Stadium Vote

The Chelsea Football Club has just lost their bid to re-purchase the land of their home stadium, Stamford Bridge, located in Southwest London, from Chelsea Pitch Owners. Chelsea Pitch Owners was a fan group set up in 1993 when the club was in financial difficulties and they “acquired the freehold of the pitch to protect Stamford Bridge, which has been Chelsea’s home for 106 years until then, from developers”. The management team of Chelsea FC was hoping that through negotiations and a voting session, Chelsea Pitch Owners would sell their shares back to the club. However, at the crunch meeting in the Great Hall of Stamford Bridge today, only 61.6% of votes cast by the shareholders in Chelsea Pitch Owners were in favor of selling the freehold of the land on which the Stamford Bridge stadium sits. In order for the vote to have passed, there needed to be at least 75% vote for the proposal. The result from today’s meeting would mean that Roman Abramovich, the Russian billionaire

Investing in...Nigeria?

Nigeria, the tenth largest producer of oil worldwide, is beginning to amass its own wealth. While $59 billion in revenues from oil were generated in 2010, the federal government has no funds. How is it possible? Nigerian officials have often used savings “in reserve” for nationwide projects, the withdrawals never needing approval. Combined with public corruption and rampant poverty, it is unsurprising that any investor would consider entrusting their funds to the Nigerian government. This is all about to change, however. Nigeria is beginning to craft a new sovereign wealth fund- revenue surpluses not used for immediate cash or consumption are invested in a federal account of financial instruments (assets normally held include stocks, bonds, property, and precious metals). Thus, Nigeria has been able to invest for its own future benefit. The wealth fund also provides Nigeria with a hedge against resource risks, as 80% of revenues come from oil. These include volatility of its oil pric