26 research outputs found
The margin of safety principle and corporate strategy
No full textPurposeThis paper seeks to analyze the applicability of the time‐tested margin of safety principle from value investing to corporate strategy.Design/methodology/approachThe main source of this paper is the book Margin of Safety, supplementation materials, including a discussion with the book's author, Seth Klarman, were also referenced.FindingsThe paper finds that the margin of safety principle is broadly applicable to corporate strategy in areas such as M&A, hedging, balance sheet management, share buybacks, special dividends, divestments, and cash management. Each of these areas is discussed in the paper and illustrated by way of timely examples as part of the analysis.Research limitations/implicationsFurther research could be conducted into valuation methods in general, including the method practiced by noted value investors. Research could also be conducted into the margin of safety principle and its applications in corporate strategy, corporate finance, strategic risk management, shareholder communications, and operations management.Originality/valueThis is the first paper that the author is aware of that analyzes the applicability of the investment‐based margin of safety principle to corporate strategy and strategy‐related initiatives.</jats:sec
Strategic M&A: insights from Buffett's MidAmerican acquisition
No full textPurposeThis paper seeks to propose a definition of strategic mergers and acquisitions (M&A) that is illustrated by way of case study. It also aims to introduce the strategic concept of “nascent franchise.”Design/methodology/approachThe proposed definition is based on existing strategic theory, which was extended to the field of M&A. The supporting case analysis is based on the Berkshire Hathaway‐led acquisition of MidAmerican Energy Holdings Company (“MidAmerican”) in 1999, and was prepared from publicly available financial information.FindingsDefining strategic M&A in the manner proposed in this paper proved useful in explaining the dynamics of, and post‐acquisition performance of, the MidAmerican acquisition. It also helped to frame the analysis leading to the concept of nascent franchise.Practical and research implicationsThe paper's definition of strategic M&A could help reframe deal deliberations for practitioners, and spur research by strategy scholars. Additionally, the concept of “nascent franchise” could be developed in future research conducted by either practitioners or academicians.Originality/valueStrategic M&A is defined in a manner consistent with the literature, but extended and illustrated in a unique manner. The valuation presented in this paper, and the concept of nascent franchise derived from the valuation, are based solely on the author's work.</jats:sec
Distressed M&A and Corporate Strategy: Lessons from Marvel Entertainment Group's Bankruptcy
No full textHenry Singleton: a pioneer of corporate strategic leadership and value creation
No full textPurposeThis paper profiles the leadership and Financial Strategy principles of Dr. Henry E. Singleton, the late founder of Teledyne Corporation.Design/methodology/approachThe main sources of this paper are a private study prepared by Leon G. Cooperman, Chairman and CEO of Omega Advisors, Inc., who knew Dr. Singleton and who was a long‐term Teledyne investor, as well as a 2007 book that was published by Teledyne's former president.FindingsThe leadership and financial strategy principles of Henry Singleton have broad applicability to executives across industries and to researchers across disciplines including strategy, finance, management, and entrepreneurship.Research limitations/implicationsSingleton's principles, especially in the area of Financial Strategy, could be used by executives in the challenging times that likely lay ahead, and could serve as the basis for applied‐based research, most particularly case studies, on entrepreneurship, growth by acquisition, capital allocation, stock buybacks, and spin‐offs.Originality/valueLong‐time associates of Singleton believe this is the first academic analysis of his leadership and financial strategy principles.</jats:sec
