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1 - Introduction

Published online by Cambridge University Press:  14 July 2022

James J. Park
Affiliation:
University of California, Los Angeles
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Summary

At some point, it becomes almost impossible for management to deliver on accelerating expectations without faltering, just as anyone would eventually stumble on a treadmill that keeps moving faster. McKinsey & Co., Valuation: Measuring and Managing the Value of Companies, 2020 The typical public corporation now runs on a valuation treadmill. If its stock is traded widely in public markets, it must take care to keep pace with market expectations. Whether it be through developing transformative new products or consistently meeting quarterly financial projections, a public company must continually convince investors that it will generate profits in future years just to maintain its stock price. If investors become concerned that a company’s profitability is declining, they can drastically readjust its valuation.

Type
Chapter
Information
The Valuation Treadmill
How Securities Fraud Threatens the Integrity of Public Companies
, pp. 1 - 12
Publisher: Cambridge University Press
Print publication year: 2022

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  • Introduction
  • James J. Park, University of California, Los Angeles
  • Book: The Valuation Treadmill
  • Online publication: 14 July 2022
  • Chapter DOI: https://doi.org/10.1017/9781108938556.001
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Save book to Dropbox

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  • Introduction
  • James J. Park, University of California, Los Angeles
  • Book: The Valuation Treadmill
  • Online publication: 14 July 2022
  • Chapter DOI: https://doi.org/10.1017/9781108938556.001
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Introduction
  • James J. Park, University of California, Los Angeles
  • Book: The Valuation Treadmill
  • Online publication: 14 July 2022
  • Chapter DOI: https://doi.org/10.1017/9781108938556.001
Available formats
×