Article: Under Armour Sold Some Clothes Early

Article - Media, Publications

Under Armour Sold Some Clothes Early

Matt Levine, 04 May 2021

One theory is that the price of a share of stock reflects the present value of its future cash flows in perpetuity. People buy stock today not because they expect high profits tomorrow, but because they expect high profits over the long run. Investment decisions that cost money today, but that will bring in much more money in five years, increase the net present value of the stock, so the shareholders should support them.

Another theory is that public markets are myopically focused on the short term. Investors care only about this quarter’s earnings; they buy stocks whose earnings go up each quarter and sell stocks whose earnings go down. A decision that reduces earnings today, in exchange for higher earnings in the future, is bad, and shareholders will punish a company that makes those decisions. Continue reading “Article: Under Armour Sold Some Clothes Early”

Article: Credit Suisse Must Face Suit Over Failed Play on Fear Index

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Credit Suisse Must Face Suit Over Failed Play on Fear Index/strong>

Bob Van Voris, 27 April 2021

Credit Suisse Group AG must face allegations that it engineered a complex fraud to sink an investment vehicle and profit on investors’ losses, after an appeals court revived the claims.

The lawsuit, filed in 2018, claimed investors lost $1.8 billion in the Feb. 5, 2018, collapse of the market for VelocityShares Daily Inverse VIX Short Term Exchange Traded Notes, known as “XIV Notes,” a derivative investment that increased in value when the stock market was calm and decreased when it was volatile. Continue reading “Article: Credit Suisse Must Face Suit Over Failed Play on Fear Index”