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Xerox Corporation Message Board

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  • guy6four guy6four Dec 7, 2012 8:51 PM Flag

    Raise the Dividend but screw the employees

    rkmtt,

    Excuse me for being stupid, but how does the price of the stock relate to the value of the company?

    The price of the stock has absolutely no impact on a balance sheet or an income statement. A P/E is nothing more than an average estimate of what the "Street" wants to pay for a stock.

    Are you saying that if the stock doubles that XRX would be in better shape as a comapny thanbefore? Why? Should that mean they should expand? Hire more people?

    If the stock goes down 50%, should hte company lay off half their people?

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    • Let me try to explain it to you in a very simple way....A strong stock price does help both the employees and the company, in the long run. and yes it also helps the Balance sheet, income statement
      Let me walk you into typical senario, and let me me answer as best as I can given the short
      blip on his message board.

      to your remark about stock price increase company expands stock price decrease company lays off
      x amout of people.
      expansion of a company plant and equipment can easly be thru a secondary stock issuance
      also with that capital to pay new hires, if the stock is low (PE) to its peers (ckeck Canon)
      the company may not expand, but not necessary lay off peple should it drop, as long as the model
      is competitive.
      Also via a secondary the company may chose to reduce debt, which is a major item on the Balance sheet. Add to it a reduction in Debt payments to bond holders, a plus to the income statement.
      also Stock options to employees,

      while a proper balance is important, the long term stability , investor confidence is important, what I do find is the curent outsourcing by many top fortune 500 companies is contrary to long term heath
      of the US economy, now that another topic..

      Sentiment: Strong Buy

 
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