Posted on 03/28/2008 8:58:30 PM PDT by Toddsterpatriot
The "headquarters curse" — the idea that the moment a company starts planning a fancy new headquarters is the moment for smart investors to start bailing out of its stock — is being given new currency by events here in New York.
The most recent example is Bear Stearns, which, according to the Web site of Good Jobs New York, a group that opposes special subsidy deals for businesses, was granted $75 million in tax breaks by the Giuliani administration in 1997 to build a new 1.1 million square foot world headquarters at 383 Madison Avenue, designed by Skidmore, Owings and Merrill. Bear's medium-range performance since moving has been strong, but over the last year, the bank has lost more than 90% of its value, with its stock price plummeting from $170 a share to the $10 a share that J.P. Morgan is now offering.
But Bear is only one of many examples of this curse. Take IAC Interactive, a company chaired by Barry Diller whose businesses include Ticketmaster, the online dating site match.com, evite, and LendingTree. Last summer, the company moved into fancy, Frank Gehry-designed headquarters at West 18th Street and 11th Avenue, a building subsidized by the federal taxpayers with $80 million in tax-exempt Liberty Bond financing from the New York City Industrial Development Agency. Over the past year, IAC's stock price has plummeted 50%, more than twice the decline in either the NASDAQ or the Standard & Poor's 500 Index.
(Excerpt) Read more at 2.nysun.com ...
Ping!
Cheers!
File under: HUBRIS
In any event, the whole "headquarters" idea is such antiquated nonsense. The lean, mean companies to come will largely be an amalgam of talented employees from all over the country, mainly linked by computer and live video feed.
Actually, Congress could be conducted in similar fashion right now, with all the members doing business and casting votes right from their home districts, and only gathering for important events like the State of the Union and national crisis. The reason it will never happen is that no Congressperson would want to remain in his or her district to conduct business -- they'd be too close to those dastardly constituents of theirs.
Washington provides them a convenient escape.
E. F. Hutton built a new headquarters building a year or two before the 1987 crash which wiped out the company.
Thanks for the headsup guys!
Exactly. It is an indication that the CEO is more focused on personal status than in doing his job
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