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>The conglomerate was supposed to be dead, a relic of a bygone of era of corporate America. That's not even close to being true. How does someone get a job on
by tpeo 9y ago
>The conglomerate was supposed to be dead, a relic of a bygone of era of corporate America.
That's not even close to being true. How does someone get a job on a supposedly reputable newspaper writing such daft shit?
https://en.wikipedia.org/wiki/List_of_conglomerates https://en.wikipedia.org/wiki/List_of_conglomerates
- TheSpiceIsLife 9y agoThe first paragraph of the article states: Investors, we have been repeatedly told, want smaller, nimbler, more focused companies." Who's we? If, by investors, they mean a fairly specific subset of investors, namely Venture Capitalists* and Angel Investors, then yes. But otherwise, no. People aren't bailing out of established conglomerates. Not that I'm aware of.
- Mathnerd314 9y agoThis guy and his friends, obviously: https://www.youtube.com/watch?v=4QiQKALBymE https://www.youtube.com/watch?v=4QiQKALBymE Seems like a mix of investors, reporters, and CEOs.
- scatters 9y agoThe conglomerate discount is real - about 10% on average in developed countries. This applies to public companies, so is a revealed preference of institutional and retail investors, not VCs and angels.
- TheSpiceIsLife 9y agoOkay, well then, thanks for pointing that out. I retract my previous statement and substitute it with something more like: The discount investors apply to conglomerates is linked to perceived lower risk. So while it might not be accurate to say investors want smaller, nimbler, more focused companies without specifying which investors, it can be accurate to say something like investors looking for a higher rate of return (which implies greater risk) want smaller, nimbler, more focused companies.
- obastani 9y agoI don't understand your comment. Given the same rate of return, investors prefer lower risk. So what you seem to be saying is conglomerates produce lower returns. But I don't think that's what the conglomerate discount is, which I believe says that the components of a conglomerate are worth more than the conglomerate itself. More precisely, "Conglomerate discount is calculated by adding an estimation of the intrinsic value of each of the subsidiary companies in a conglomerate and subtracting the conglomerate's market capitalization from that value." [1] [1] http://www.investopedia.com/terms/c/conglomeratediscount.asp#ixzz4kXjb7Bsj http://www.investopedia.com/terms/c/conglomeratediscount.asp...
- sharemywin 9y agoExcept for the top 5 tech companies because they have a free pass to become monopolies in new industries and extract massive profits versus incumbent companies.
- didibus 9y agoAgreed, I'm surprised to see something of the sort on NY times. It's pure sensationalism.
- deleted 9y ago[deleted]
- hkmurakami 9y agoYeah even before seeing that list (which was much longer than I had expected), I could name Berkshire, the mega-food groups, the mega-media groups, Koch Industries, and General Electric as conglomerates.
- Cthulhu_ 9y agoNot to mention companies like Samsung and similar Korean / Asian megacompanies that do everything from consumer electronics to container ships.
- dredmorbius 9y agoA counterpoint suggests the concept's been losing ground: https://books.google.com/ngrams/graph?content=conglomerate&year_start=1800&year_end=2008&corpus=15&smoothing=3&share=&direct_url=t1%3B%2Cconglomerate%3B%2Cc0 https://books.google.com/ngrams/graph?content=conglomerate&y... The concept is an old one, dating to the late 19th century. In the 1960s and 1970s, the new phenomenon was the "multinational corporation". https://books.google.com/ngrams/graph?content=multinational%20corporation&year_start=1800&year_end=2000&corpus=15&smoothing=3&direct_url=t1%3B%2Cmultinational%20corporation%3B%2Cc0 https://books.google.com/ngrams/graph?content=multinational%...
- tpeo 9y ago"Conglomerate" is a latinate word for "put together", which is to say that it doesn't immediately refer to the idea of a parent company with controlling interests in several subsidiaries over different markets so you're bound to pick up different uses of the same word. For instance, "conglomerate" is also a technical term in geology. Just check out the hits from the 19th century. Also, I'm wary of using n-grams to infer anything about the relevance of concept because there are such things as intellectual fads, and some expressions might suddenly hit public consciousness and later fade away without the idea it referred to ever becoming any less relevant. MacLuhan's media theory, for instance, became an intellectual fad in the 1970s and MacLuhan hit celebrity status. Later on, it faded away, but I don't think what he was describing became any less relevant. This kind of stuff is noticeable to anyone, though they might be hard pressed for examples: just try and notice how the buzzwords in your field changed over time. The expression "multinational corporation", as well as the word "globalization", were also fads of the 1970s too. At the time, they were more like academic fads: researchers started taking notice of these things and suddenly they became "a thing" among academics as it was a frontier research topic. Later on they hit public massively, probably peaking around the late 1990s and early 2000s with the 1999 Seattle riots, the FTAA debates and just the overall shift towards massive multilateral agreements coupled with shrinking governments. Nowadays neither of the two is as "in" as it was back them either in political or academic debate, but the concepts themselves aren't any less relevant. Or at least that's my two cents on the whole issue.
- 9y ago