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Comparison between two retail companies picked are Walmart and Costco

The two retail companies picked are Walmart and Costco whose 2017 Financial statement links are provided below: WALMART https://www.nasdaq.com/symbol/ wmt/financials?query=income- statement COSTCO https://www.nasdaq.com/symbol/ cost/financials?query=income- statement Both organizations are well known brands and position themselves well with their customer base. Walmart’s value proposition is “We save people money so they can live better”. On the other hand, Costco’s value proposition is “All-in-one convenience and everyday affordability”. Both retailers focus on cost saving for their customers. Looking at their financial statements and by analyzing them a few key areas are evident when comparing the two organization. Looking at the current ratio and quick ratio we can determine the short-term solvency of each organization. The current ratio can be determined by dividing the assets by the liabilities. Walmart’s current ratio sits at 0.86 while Costco’s sits at 0.99. The quick ratio is c...
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What limits should there be on insider trading?


In the USA, Pete Rose was a popular baseball player, and then manager, who was punished for betting on his own team to win. What limits should there be on insider trading?

     Peter Edward Rose is a former American professional baseball player and manager. Rose played in Major League Baseball from 1963 to 1986 and managed from 1984 to 1989.  He won three World Series rings and many most valuable player awards. For years, Rose has denied that he bet on baseball games while he was a player. Yet, in October 1998, John Dowd, who is a former federal prosecutor, found that a Rose related notebook, which had the original photos of how Rose betting life was in 1986: From March to July 1986, Rose bet on MLB team over 30 different days. During those bets, the largest single bet was $5,500 on the Boston Celtics, in which he lost the bet. He had bet heavily on college and professional baseball and lost $15,400 on one day in March (Grossman, 2018). Since Rose had nonpublic information about the teams based on his insider information, his betting on the team is illegal (Insider trading, n. d.).  

Should Pete Rose be allowed to profit from betting on the success of a team he managed?

     According to the MLB rule 21, Rose is not allowed to make profits from betting on the success of a team that he managed (Grossman, 2018). Also, Under MLB Rule 21, “Any player who shall bet any sum whatsoever upon any baseball game in connection … shall be declared permanently ineligible”. Because Rose bet, while being a professional MLB player, he had seen his personal economic interest as priority over his team (Grossman, 2018). 

Enron sold all their Enron stock about an hour before.

     Enron corporation was an American energy, commodities, and services company based in Houston, Texas. Enron introduced the revolutionary changes to energy trading and formed a countrywide energy-trading network. In 2000, Enron Online was established and by the 2001, it was executing on-line trades that were worth about $2.5 billion a day. In the last week of 2000, Enron stock hit $84.87 per share, but much of its balance sheet did not paint the same picture. It is for that reason that Enron had shuffled much of its debts to their offshore partnerships that are the schemes traders who are used to serve as the middleman for contract trades. Time goes by and Enron’s trouble float to the table. It eventually announced that the firm was having a $638 million loss for the 3rd quarter and took a $1.2 billion reduction from the shareholders’ equity in 2001. By October 22, 2001, the SEC had begun an inquiry into Enron, and its partnerships. On the November 8, 2001, Enron revised its financial statements for the previous five years. The firm has actually $586 million in losses instead of taking profits. Then, the stock value fell, eventually to below $1 per share, and was delisted in January, 2002. Yet, due to the insider trading, there were 1.1 billion of stocks that were sold. Those were sold by members of the board or senior management (The Enron Collapse, n. d.).

Should a manager be punished for acting prudently based on knowledge they have discovered honestly only because the general public does not have that knowledge?

     If a manager bases his trading on the knowledge he has that the general public does not have and does insider trading for personal gain, that would be against the SEC’s Insider Trading Policy. It can result in a prison sentence and/or civil and criminal fines for the individual and the company (Insider Trading Policy, n. d.).

Private information might influence question of timing dissemination is it enough to share information on a public website or should a formal press conference be required?

     Public website. Public website promotes freedom of expression. It is an open, and access affordable website that people can share their ideas or “work to shape policy on behalf of the public interest (Press and media conferences, n. d.)”.

     Press Conference. Press Conference, also known as news conference, is when newsworthy sends out a call to gather reporters together to tell them all at once about the news. And then afterwards, it allows the reporters to ask questions. This kind of event often takes place while a company publicist invites the media to promote a product, performance, or a celebrity. It is nothing more than free publicity, advertising, and is similar to giving speeches to promote their products (Press and media conferences, n. d.).

     Conclusion: A public website is more about giving notice and letting you know. If you want to know more about it, you may check the related websites. However, pressing conference will be more dynamic. You and your audience can be face to face when the news is released, and you can know more about it by asking questions.

 

 

Reference

Grossman, E. (2018). Pete Rose, Chicago Black Sox and more: A look back at some of the most notorious sports betting scandals in history Retrieved July, 15, 2018, from http:www.nydailynews.com/sports/baseball/pete-rose/

Insider Trading Policy. Retrieved July, 15, 2018, from http://www.sec.gov

Press and media conferences. Retrieved July, 15, 2018, from http://www.thenewsmanual.net/manuals-volume-1/volume1_21.htm 

The Enron Collapse. Retrieved July, 15, 2018, from http://www.sfgate.com 

Weinbaum, W. and Quinn, T. (2015). Entries in Long-Hidden Notebook show Pete Rose bet on baseball as player. Retrieved July, 15, 2018, from

http://www.espn.com/espn/…/note…pete-rose-bet-baseball-player-1986

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