Shareholder Value Creators and Destroyers in the Dow Jones: Year 2008

6 Pages Posted: 15 Jan 2009 Last revised: 13 Oct 2015

See all articles by Pablo Fernandez

Pablo Fernandez

University of Navarra - IESE Business School

Vicente J. Bermejo

ESADE Business School

Date Written: January 13, 2009

Abstract

During 2008, the 30 companies included in the Dow Jones destroyed $1.6 trillion for their shareholders. Only 2 companies (Wal Mart and McDonalds) created value. The top shareholder value destroyers were General Electric ($233 billion) and Microsoft ($178 billion). The market value of the 30 companies was $2.9 trillion in 2008 and $4.4 trillion in 2007.

The price of the shares of each company had a big dispersion: on average, the maximum price of the year 2008 was 2.6 times the minimum price. 2008 had 11 of the 20 days with lowest returns in the period 1963-2008, and 8 of the 20 days with highest returns in the same 45-year period. The average return of 2008 was -32.3% (6 companies had returns below -50% and 20 had returns below -20%). However, the investors that bought shares in the years 1987-1998 and 2001-2002 had positive returns on December 2008.

Keywords: shareholder value creation, created shareholder value, shareholder value added, shareholder return

JEL Classification: G12, G31, M21

Suggested Citation

Fernandez, Pablo and Bermejo, Vicente J., Shareholder Value Creators and Destroyers in the Dow Jones: Year 2008 (January 13, 2009). Available at SSRN: https://ssrn.com/abstract=1327106 or http://dx.doi.org/10.2139/ssrn.1327106

Pablo Fernandez (Contact Author)

University of Navarra - IESE Business School ( email )

Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

HOME PAGE: http://web.iese.edu/PabloFernandez/

Vicente J. Bermejo

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

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