Shareholder Value Creators and Destroyers in the Dow Jones: Year 2008
6 Pages Posted: 15 Jan 2009 Last revised: 13 Oct 2015
Date Written: January 13, 2009
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: Suggested Citation