Following on from my post last week on Apple's bond issue, click here to read Mark Roe's piece at Project Syndicate where he discusses why it might be a good long-term strategy for Apple to return a large chuck of its $137bn cash pile to shareholders. Roe believes that Apple may be at a point in its corporate and innovation life-cycle where the cash could be wasted by its management in pursuit of the next big thing - the iThingamajig. Consequently, he argues that the cash is better in the hands of investors.
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...