We are ready to represent the best custom paper writing assistance that can cope with any task like Commercialism in "The Most Dangerous Game even at the eleventh hour. The matter is that we posses the greatest base of expert writers. Our staff of freelance writers includes approximately 300 experienced writers are at your disposal all year round. They are striving to provide the best ever services to the most desperate students that have already lost the hope for academic success. We offer the range of the most widely required, however, not recommended for college use papers. It is advisable to use our examples like Commercialism in "The Most Dangerous Game in learning at public-education level. Get prepared and be smart with our best essay samples cheap and fast! Get in touch and we will write excellent custom coursework or essay especially for you.
Commercialism in “The Most Dangerous Game”
In Richard Connell’s short story “The Most Dangerous Game,” the reader is introduced to commercialism at its best. Through the use of his three dimensional characters and the suspenseful plot, Connell takes his readers on an exhilarating ride through the twisted actions of one man’s search for the ultimate sporting game. Power and the need to win can become an obsession that can lead to destruction.
Connell uses commercialism to obtain a hungry reading audience. Commercial fiction is “Fiction to meet the taste of a wide popular audience and relying usually on tested formulas for satisfying such taste”(1706). Connell wrote “The Most Dangerous Game” aware of an audience that was eager for entertainment that included characters from the intellectual realm and characters from wartime factions.
Because the United States was involved in a war overseas, the American public was in need of entertainment in which evil was defeated and good virtues are rewarded.
Meador
Connell’s characters are entertaining and any reading audience can appreciate the vivid images Connell uses to describe General Zaroff
Rainford’s first impression was that the man was
Singularly handsome; his second was that there
was an original, almost bizarre quality about the
general’s face. He was a tall man past middle
age, for his hair was a vivid white; but his
thick eyebrows and pointed military mustache were
as black as the night from which Rainsford had
come. (6)
What reading audience could not become fascinated by such a stately character?
Just as Connell uses fascinating characters to win his reading audience, he uses a suspenseful plot to gain his audiences’ interest. When the narrator discoveries what prey General Zaroff is hunting (man), he decides that instead of becoming a partner in Zaroff’s madness, he will become the hunted. Zaroff’s belief that ”Life is for the strong, to be lived by the strong, and, if need be, taken by the strong. The weak of the world were put here to give the strong pleasure. I am strong” is one that Rainsford finds twisted and immoral (67). Rainsford even states,
Meador
“Hunting? Good God, General Zaroff, what you speak of is murder” (66). The suspenseful events of the manhunt, gave Connell’s audience exactly what it was thirsty for good to triumph over evil.
The commercial fiction found within “The Most Dangerous Game” is obvious. From the characters, to the suspenseful plot, the audience is not disappointed. It was through the actions of both Rainsford and Zaroff that the audience was shown the destruction of a man due to his obsession for power and his twisted desire for total control.
Mind that the sample papers like Commercialism in "The Most Dangerous Game presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Monday, October 22, 2012
Argument
We are ready to represent the best custom paper writing assistance that can cope with any task like Argument even at the eleventh hour. The matter is that we posses the greatest base of expert writers. Our staff of freelance writers includes approximately 300 experienced writers are at your disposal all year round. They are striving to provide the best ever services to the most desperate students that have already lost the hope for academic success. We offer the range of the most widely required, however, not recommended for college use papers. It is advisable to use our examples like Argument in learning at public-education level. Get prepared and be smart with our best essay samples cheap and fast! Get in touch and we will write excellent custom coursework or essay especially for you.
Abby Franklin
Campbell
English 1001-17
1 November 00
Future of Success
People make decisions everyday; whether it is what to wear, what to do today, what do I want to do with my life, or even what colleges to attend. College is a very important step up the ladder of success. There are many great colleges all over the world. There are even great colleges in small communities, like that of IVCC. After graduating high school students choosing a college look for many different values. They look at what their friends are doing; they look for scholarships, and of course independence. What I looked for when I chose to attend Illinois Valley Community College was the location, the size of the school and the courses, and of course what my parents thought.
Location is a key factor in choosing a college to attend. Because some students want to go far away from their hometown and their parents to gain a broader perspective about the world outside their community and to meet knew people, they will choose a college not around the community they live in. Other students who just want have some independence will choose colleges further away from home, and other students who are trying to learn how to be an adult and to be solely responsible will also choose colleges other than the ones in their hometown to gain those qualities. For example, some parents will do everything for their children, like cleaning up after them, washing there laundry, and not enforcing any responsibility towards their child, thus the reason why students may want to go away to college to learn those qualities. Students who live in our community and choose to attend IVCC, like myself, may already have those qualities of freedom and responsibility. Those students are just looking for an education close to home maybe because they have a job or special task they must take care of. Many college seeking students don’t understand that, “no place so close can take you so far.”
Other students are looking for a greater education other than a lecture with eighty to one hundred students in class. Unlike the classes at a larger university which would have tons of students packed into one classroom; IVCC has a small enrollment. IVCC does not have as many students attending to derive an education like that of a university. Because there are fewer students in class some people think that it is easy to learn with a smaller group. Other students benefit from a small group. For example, if a single student that attends class in a smaller group has a question, their question has more of a possibility to be answered than a student in a class of ten times the amount of students. Thus the reason why IVCC is chosen over a university.
Another key factor in choosing a college to attend are parents. Parents are referred to as the legal guardian, which gives them the roll of telling students which college they should attend; especially if they are paying tuition. However, it is also important for the student to communicate with their parents to choose a college that they both agree on. My parents also pay my tuition for IVCC, which had a big part of why I chose this college. Tuition is outrageous in the recent years. It can be fairly difficult for an average family to send a student off to a university with no financial aid or scholarships. Which is why students should be grateful that IVCC is so close. Because tuition is so high, for attending other colleges; it makes a reason why teenagers are unable to go to college after high school. Other parents don’t think their child is ready to go off by him or herself so they will chose a college that is closer. Other parents have a hard time of letting their child grow up and move on with their future, they too will chose a college nearby.
There are many factors on why students attend the college they do. Weather it be because of the location of the college, the size of enrollment and classes, or also which direction your parents decide on. All of these factors should be considered when choosing a college. Choose a college that is liked upon certain values, and don’t choose a college just because everyone else goes there. Think about the cause and effects of each choice you make. But most of all think about the future of an education.
Mind that the sample papers like Argument presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Abby Franklin
Campbell
English 1001-17
1 November 00
Future of Success
People make decisions everyday; whether it is what to wear, what to do today, what do I want to do with my life, or even what colleges to attend. College is a very important step up the ladder of success. There are many great colleges all over the world. There are even great colleges in small communities, like that of IVCC. After graduating high school students choosing a college look for many different values. They look at what their friends are doing; they look for scholarships, and of course independence. What I looked for when I chose to attend Illinois Valley Community College was the location, the size of the school and the courses, and of course what my parents thought.
Location is a key factor in choosing a college to attend. Because some students want to go far away from their hometown and their parents to gain a broader perspective about the world outside their community and to meet knew people, they will choose a college not around the community they live in. Other students who just want have some independence will choose colleges further away from home, and other students who are trying to learn how to be an adult and to be solely responsible will also choose colleges other than the ones in their hometown to gain those qualities. For example, some parents will do everything for their children, like cleaning up after them, washing there laundry, and not enforcing any responsibility towards their child, thus the reason why students may want to go away to college to learn those qualities. Students who live in our community and choose to attend IVCC, like myself, may already have those qualities of freedom and responsibility. Those students are just looking for an education close to home maybe because they have a job or special task they must take care of. Many college seeking students don’t understand that, “no place so close can take you so far.”
Other students are looking for a greater education other than a lecture with eighty to one hundred students in class. Unlike the classes at a larger university which would have tons of students packed into one classroom; IVCC has a small enrollment. IVCC does not have as many students attending to derive an education like that of a university. Because there are fewer students in class some people think that it is easy to learn with a smaller group. Other students benefit from a small group. For example, if a single student that attends class in a smaller group has a question, their question has more of a possibility to be answered than a student in a class of ten times the amount of students. Thus the reason why IVCC is chosen over a university.
Another key factor in choosing a college to attend are parents. Parents are referred to as the legal guardian, which gives them the roll of telling students which college they should attend; especially if they are paying tuition. However, it is also important for the student to communicate with their parents to choose a college that they both agree on. My parents also pay my tuition for IVCC, which had a big part of why I chose this college. Tuition is outrageous in the recent years. It can be fairly difficult for an average family to send a student off to a university with no financial aid or scholarships. Which is why students should be grateful that IVCC is so close. Because tuition is so high, for attending other colleges; it makes a reason why teenagers are unable to go to college after high school. Other parents don’t think their child is ready to go off by him or herself so they will chose a college that is closer. Other parents have a hard time of letting their child grow up and move on with their future, they too will chose a college nearby.
There are many factors on why students attend the college they do. Weather it be because of the location of the college, the size of enrollment and classes, or also which direction your parents decide on. All of these factors should be considered when choosing a college. Choose a college that is liked upon certain values, and don’t choose a college just because everyone else goes there. Think about the cause and effects of each choice you make. But most of all think about the future of an education.
Mind that the sample papers like Argument presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
achievement of desire
We are ready to represent the best custom paper writing assistance that can cope with any task like achievement of desire even at the eleventh hour. The matter is that we posses the greatest base of expert writers. Our staff of freelance writers includes approximately 300 experienced writers are at your disposal all year round. They are striving to provide the best ever services to the most desperate students that have already lost the hope for academic success. We offer the range of the most widely required, however, not recommended for college use papers. It is advisable to use our examples like achievement of desire in learning at public-education level. Get prepared and be smart with our best essay samples cheap and fast! Get in touch and we will write excellent custom coursework or essay especially for you.
Richard Rodriguez’s The Achievement of Desire is a story self-identity and culture. Having grown up with parents who remained with the traditions of their Hispanic culture, Richards’s ambition to learn, and to be like his teachers, separated him from his roots. Almost immediately at a young age Richard realizes learning requires quiet time and space that he did not have much of at home. As his desire increased to read and write so did his isolation from his parents. As much as he loved them he also bared a load of guilt from being embarrassed by their thick accents and behavior.
The boy in the story spent all his free time reading and studying. He spent his time trying to figure out what his teachers wanted from him. “… These books have made me all that I am.” That was the kind of remark I could not ignore” (Rodriguez 64). This is a good example of that. This is also an example of the “banking concept of education” that Paulo Freire wrote about. He had a goal to learn the material, almost memorize it. “Most books, of course, I barely understood” (Rodriguez 64). This is definitely not literate. The basic meaning of �to be literate�is being able to read, but literacy is a lot more. It is understanding what you read, and looking past the words on the page to understand what the message is that the author is sending to you. Everyone who reads has a different view of what the author meant, and the author might be all together different. It doesn’t mean that the reader is wrong, but that they are questioning the text�this is literacy.
This student had a goal to be enlighten and at some point along the road to enlightenment, the talented student understood that the adult world that has been modeled for him by his parents is not the one in which he will live. He regretted that he was leaving behind the family life that he cherished; yet he found himself more and more frequently ashamed of his unlearned parents. Not to mention that he felt as if he had lost his past.
He longs for the membership he lost, “ he pines for some
nameless Eden where he never was.” The nostalgia is
the stronger and the more ambiguous because he is really
“in the quest of his own absconded self yet scared to find
it.” He both wants to go back and yet thinks he has gone
beyond his class, feels himself weighted with knowledge
of his own and their situation, which hereafter forbids
him the simpler pleasures of his father and mother… (Hoggart 67)
In this passage by Hoggart, that was used by Rodriguez, shows that this student knew he was distancing himself from his parents, yet he still wanted his childhood back. After spending hours of time in his room reading literature that he never had time for friends or even his family. He has separated himself from the world for so long that he has lost who he is. One day he is a young kid, and he moves on in life isolated from everyone and he can’t communicate with kids his own age, let alone his undereducated parents, and now he realizes that he has missed a lot of his life and is scared that he can’t experience any of his adolescent years, because he is further ahead of his friends.
He did what the teachers wanted and he didn’t make his learning experience a part of himself, he made his goal to learn by reading and not understanding�instead of learning through experiences he had throughout life. He thinks he is beyond his peers, but if he doesn’t understand what he is reading, all he has accomplished is being able to read, like everyone else his age.
Mind that the sample papers like achievement of desire presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Richard Rodriguez’s The Achievement of Desire is a story self-identity and culture. Having grown up with parents who remained with the traditions of their Hispanic culture, Richards’s ambition to learn, and to be like his teachers, separated him from his roots. Almost immediately at a young age Richard realizes learning requires quiet time and space that he did not have much of at home. As his desire increased to read and write so did his isolation from his parents. As much as he loved them he also bared a load of guilt from being embarrassed by their thick accents and behavior.
The boy in the story spent all his free time reading and studying. He spent his time trying to figure out what his teachers wanted from him. “… These books have made me all that I am.” That was the kind of remark I could not ignore” (Rodriguez 64). This is a good example of that. This is also an example of the “banking concept of education” that Paulo Freire wrote about. He had a goal to learn the material, almost memorize it. “Most books, of course, I barely understood” (Rodriguez 64). This is definitely not literate. The basic meaning of �to be literate�is being able to read, but literacy is a lot more. It is understanding what you read, and looking past the words on the page to understand what the message is that the author is sending to you. Everyone who reads has a different view of what the author meant, and the author might be all together different. It doesn’t mean that the reader is wrong, but that they are questioning the text�this is literacy.
This student had a goal to be enlighten and at some point along the road to enlightenment, the talented student understood that the adult world that has been modeled for him by his parents is not the one in which he will live. He regretted that he was leaving behind the family life that he cherished; yet he found himself more and more frequently ashamed of his unlearned parents. Not to mention that he felt as if he had lost his past.
He longs for the membership he lost, “ he pines for some
nameless Eden where he never was.” The nostalgia is
the stronger and the more ambiguous because he is really
“in the quest of his own absconded self yet scared to find
it.” He both wants to go back and yet thinks he has gone
beyond his class, feels himself weighted with knowledge
of his own and their situation, which hereafter forbids
him the simpler pleasures of his father and mother… (Hoggart 67)
In this passage by Hoggart, that was used by Rodriguez, shows that this student knew he was distancing himself from his parents, yet he still wanted his childhood back. After spending hours of time in his room reading literature that he never had time for friends or even his family. He has separated himself from the world for so long that he has lost who he is. One day he is a young kid, and he moves on in life isolated from everyone and he can’t communicate with kids his own age, let alone his undereducated parents, and now he realizes that he has missed a lot of his life and is scared that he can’t experience any of his adolescent years, because he is further ahead of his friends.
He did what the teachers wanted and he didn’t make his learning experience a part of himself, he made his goal to learn by reading and not understanding�instead of learning through experiences he had throughout life. He thinks he is beyond his peers, but if he doesn’t understand what he is reading, all he has accomplished is being able to read, like everyone else his age.
Mind that the sample papers like achievement of desire presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
A child called it
We are ready to represent the best custom paper writing assistance that can cope with any task like A child called it even at the eleventh hour. The matter is that we posses the greatest base of expert writers. Our staff of freelance writers includes approximately 300 experienced writers are at your disposal all year round. They are striving to provide the best ever services to the most desperate students that have already lost the hope for academic success. We offer the range of the most widely required, however, not recommended for college use papers. It is advisable to use our examples like A child called it in learning at public-education level. Get prepared and be smart with our best essay samples cheap and fast! Get in touch and we will write excellent custom coursework or essay especially for you.
Love and a family who cared was all he wanted, but hate and child abuse was all he got. David Pelzer’s story is one of the most unforgettable and severe child abuse cases in California. David was brutally beaten and starved by his mother who was an alcoholic and who had emotional problems. She played games that were unpredictable and torturous that left David nearly dead. In this story A Child Called “It”, it reveals both bright side of our nature and the dark side. His mother wasn’t always abusive to him. In his earlier years she was a loving mother, until the alcohol took control of her and then she reveals her dark side to her son, David.
In David’s years before the abuse started his family was called the “Brady Brunch” of the 160’s. He and his two brothers were blessed with the perfect family. David’s father, Stephen Joseph was a fireman working in San Francisco. David’s mother, Catherine Roerva was an averaged size woman who was a house wife. She would always glow with love for her children. When Christmas came, he and his brothers became more and more excited. The pile of gifts under the tree grew day by day. David’s mother would creep into his room and whisper, “Santa came!” After they were done opening presents, David found his mother crying outside on the porch steps. He asked why she was crying and she said she was crying because she was so happy to have a real family. When spring came along, his mother would take the family on picnics. She would prepare a feast of fried chicken, salads, sandwiches, and lots of desserts. The trip David never forgot was the trip to the river. His mother excused David a half-hour early on the last day of school, and they headed up to a beautiful river. Each day was a new adventure for him. David would either spend the day climbing an old, burnt tree stump with their special whomper-stomper boots or swimming in the river at Johnson’s Beach. Johnson’s Beach was a whole day event for the family. As David was sitting by a rock at Johnson’s beach he felt someone holding him tightly, it was his mother. He felt her heart beat and never felt more safe and warm then at that moment in time. He whispered to himself, “Everyday seems to sprinkle with magic.”
David was badly beaten by his alcoholic mother at a very young age. The punishments started by him getting put into a corner, but then as the months went by his mother would escalade her anger and intentionally burn his arm because he was a “bad boy.” David’s mother was only abusive towards David, and he could never figure out way. David would try so hard to be a good boy but his mother would always find something to yell at him about. The abuse got so bad that David went days without eating. His only way of food was to steal from his classmates at school, that didn’t last very long because his principal found out and made a phone call to David’s mother. When David returned home after school that day, his mother was furious and he got smacked around and was forced to get his chores done while his other siblings were outside playing. David wasn’t allowed to sleep in a nice comfortable bed, his bed was a cot down in the basement and his only shelter for warmness was an old ripped blanket. David would be so hungry he would dream about food just to fall asleep. If David was lucky he would get food, only it would be the leftovers that his brothers didn’t eat so it wasn’t that much. David had to learn to play his mothers games in order to survive because she no longer considered him a son, but a slave; and no longer a boy, but an “it”
The bright side of his mother’s nature was being a loving and caring mother towards her kids. When she started to drink her self esteem and lovingness went down and the dark side of her nature began to show. She didn’t care what she looked like and she most of all didn’t care about David. David had a really hard childhood and no one should ever experience something like that. Lucky for David he got out alive. David was abused for about three years, he finally got help March 5th, 17. David always thought about killing himself but he didn’t want his mother to win. He played her games and came up with strategies that kept him alive. With this book that he has written he has touched the hearts of many people and has helped kids talk about child abuse.
All in all you can see that David didn’t have the ideal life as a kid. David came forth and shared his horrible childhood by writing a book. This book helps people who have been child abused come forward and talk to someone about it. David was a very smart and intelligent boy, by learning how to play his mothers games. What may seem to be a perfect life, can change within a blink of an eye.
Mind that the sample papers like A child called it presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Love and a family who cared was all he wanted, but hate and child abuse was all he got. David Pelzer’s story is one of the most unforgettable and severe child abuse cases in California. David was brutally beaten and starved by his mother who was an alcoholic and who had emotional problems. She played games that were unpredictable and torturous that left David nearly dead. In this story A Child Called “It”, it reveals both bright side of our nature and the dark side. His mother wasn’t always abusive to him. In his earlier years she was a loving mother, until the alcohol took control of her and then she reveals her dark side to her son, David.
In David’s years before the abuse started his family was called the “Brady Brunch” of the 160’s. He and his two brothers were blessed with the perfect family. David’s father, Stephen Joseph was a fireman working in San Francisco. David’s mother, Catherine Roerva was an averaged size woman who was a house wife. She would always glow with love for her children. When Christmas came, he and his brothers became more and more excited. The pile of gifts under the tree grew day by day. David’s mother would creep into his room and whisper, “Santa came!” After they were done opening presents, David found his mother crying outside on the porch steps. He asked why she was crying and she said she was crying because she was so happy to have a real family. When spring came along, his mother would take the family on picnics. She would prepare a feast of fried chicken, salads, sandwiches, and lots of desserts. The trip David never forgot was the trip to the river. His mother excused David a half-hour early on the last day of school, and they headed up to a beautiful river. Each day was a new adventure for him. David would either spend the day climbing an old, burnt tree stump with their special whomper-stomper boots or swimming in the river at Johnson’s Beach. Johnson’s Beach was a whole day event for the family. As David was sitting by a rock at Johnson’s beach he felt someone holding him tightly, it was his mother. He felt her heart beat and never felt more safe and warm then at that moment in time. He whispered to himself, “Everyday seems to sprinkle with magic.”
David was badly beaten by his alcoholic mother at a very young age. The punishments started by him getting put into a corner, but then as the months went by his mother would escalade her anger and intentionally burn his arm because he was a “bad boy.” David’s mother was only abusive towards David, and he could never figure out way. David would try so hard to be a good boy but his mother would always find something to yell at him about. The abuse got so bad that David went days without eating. His only way of food was to steal from his classmates at school, that didn’t last very long because his principal found out and made a phone call to David’s mother. When David returned home after school that day, his mother was furious and he got smacked around and was forced to get his chores done while his other siblings were outside playing. David wasn’t allowed to sleep in a nice comfortable bed, his bed was a cot down in the basement and his only shelter for warmness was an old ripped blanket. David would be so hungry he would dream about food just to fall asleep. If David was lucky he would get food, only it would be the leftovers that his brothers didn’t eat so it wasn’t that much. David had to learn to play his mothers games in order to survive because she no longer considered him a son, but a slave; and no longer a boy, but an “it”
The bright side of his mother’s nature was being a loving and caring mother towards her kids. When she started to drink her self esteem and lovingness went down and the dark side of her nature began to show. She didn’t care what she looked like and she most of all didn’t care about David. David had a really hard childhood and no one should ever experience something like that. Lucky for David he got out alive. David was abused for about three years, he finally got help March 5th, 17. David always thought about killing himself but he didn’t want his mother to win. He played her games and came up with strategies that kept him alive. With this book that he has written he has touched the hearts of many people and has helped kids talk about child abuse.
All in all you can see that David didn’t have the ideal life as a kid. David came forth and shared his horrible childhood by writing a book. This book helps people who have been child abused come forward and talk to someone about it. David was a very smart and intelligent boy, by learning how to play his mothers games. What may seem to be a perfect life, can change within a blink of an eye.
Mind that the sample papers like A child called it presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
"Who am i"?(narrative)
We are ready to represent the best custom paper writing assistance that can cope with any task like "Who am i"?(narrative) even at the eleventh hour. The matter is that we posses the greatest base of expert writers. Our staff of freelance writers includes approximately 300 experienced writers are at your disposal all year round. They are striving to provide the best ever services to the most desperate students that have already lost the hope for academic success. We offer the range of the most widely required, however, not recommended for college use papers. It is advisable to use our examples like "Who am i"?(narrative) in learning at public-education level. Get prepared and be smart with our best essay samples cheap and fast! Get in touch and we will write excellent custom coursework or essay especially for you.
Who am I?
During all of high school, It seemed as if I were hiding behind a mask. When I was at home I was a totally different person. At school I was trying to be a person who could fit in, but the more I tried the more it didn’t seem to work. Everywhere I went I would censor what I said depending on my surroundings and the people that were with me. Most of the time I would not say anything at all because I was afraid of being embarrassed. I would always have to change my mood when different people were around me. It was horrible; I hated it. I was getting sick and tired of always being someone I was not. It was about the middle of the summer of 1, after my first year, that I realized that being two different people was the worst thing that I could have done to myself and that I did have other options.
Around that time, a major influence on my life was my best friend, Tony. He taught me that I would only live once and that I should be the person that I was and not someone that just tries to fit in. We were sitting in a coffee shop one evening when he asked me the one question that changed my life. “Who are you?” When I first heard this question I hesitated to answer. This question opened a new door in my mind that had never been opened before. This was the first question that had actually made me think about myself and who I was. The more I thought about his question the more I realized that I had a decision to make; to be the person who tried to fit in and cared what other people thought or to be myself. For the past 16 years at that time I had tried to fit in, and I had cared what other people thought and this didn‘t seemed to work. So, for the first time, I was going to be myself.
When I started to be myself, it seemed as if everything was different. I used to look at what was only on the surface. I would not normally look deeply into a particular subject. When I was myself, the environment seemed as if it had a deeper meaning. Everything I saw, heard, smelled, and felt I perceived in an extremely different way. Because of this, I was able to take what I had learned and apply it to many occasions and came out with pride.
Mind that the sample papers like "Who am i"?(narrative) presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Who am I?
During all of high school, It seemed as if I were hiding behind a mask. When I was at home I was a totally different person. At school I was trying to be a person who could fit in, but the more I tried the more it didn’t seem to work. Everywhere I went I would censor what I said depending on my surroundings and the people that were with me. Most of the time I would not say anything at all because I was afraid of being embarrassed. I would always have to change my mood when different people were around me. It was horrible; I hated it. I was getting sick and tired of always being someone I was not. It was about the middle of the summer of 1, after my first year, that I realized that being two different people was the worst thing that I could have done to myself and that I did have other options.
Around that time, a major influence on my life was my best friend, Tony. He taught me that I would only live once and that I should be the person that I was and not someone that just tries to fit in. We were sitting in a coffee shop one evening when he asked me the one question that changed my life. “Who are you?” When I first heard this question I hesitated to answer. This question opened a new door in my mind that had never been opened before. This was the first question that had actually made me think about myself and who I was. The more I thought about his question the more I realized that I had a decision to make; to be the person who tried to fit in and cared what other people thought or to be myself. For the past 16 years at that time I had tried to fit in, and I had cared what other people thought and this didn‘t seemed to work. So, for the first time, I was going to be myself.
When I started to be myself, it seemed as if everything was different. I used to look at what was only on the surface. I would not normally look deeply into a particular subject. When I was myself, the environment seemed as if it had a deeper meaning. Everything I saw, heard, smelled, and felt I perceived in an extremely different way. Because of this, I was able to take what I had learned and apply it to many occasions and came out with pride.
Mind that the sample papers like "Who am i"?(narrative) presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Why have Shares in Internet & Technology companies been so volatile in the last few years?
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Why have Shares in Internet & Technology companies been so volatile in the last few years?
Introduction
In 1/000, there was a belief that ‘dotcoms’ were going to change business methods and replace the ‘old economy’. People thought that Internet based companies could eliminate the cost of real estate and sales staff, reducing average total costs therefore being able to undercut the costs of traditional competitors and make higher profit margins. It was relatively easy for small companies to get funding from venture capitalists and by placing shares on OFEX or AIM. Investors believed the hype and shares boomed.
In March 000 technology shares slumped . Since then dotcoms and technology stocks have been in the doldrums, Venture capitalists have become more conservative and the Initial Public Offering (IPO) market has snapped shut since internet companies would not be able to raise much capital in the new market. Advertising revenues have collapsed, confidence has dropped out of the market and investors have lost confidence in the stocks, resulting in an oversupply of shares leading to plunging market capitalisations and share prices.
This chain of events caused the share price of Internet and Technology companies to rise to dizzy heights, then fall as quickly as they rose. In this report the volatility shown by this sector shall be analysed.
Methodology
The Information used has been both from primary and secondary sources.
Secondary data has been collected using various websites such as Moneyextra, Imiweb, Ft.com, Bigcharts and The Economist. These websites have been used to collect essential financial statistics on the companies used, as well as information about the sector. To gain more specific information I have used company reports for Lastminute.com, Bookham Technology and Vodafone. I have used these companies as barometers to indicate the relative rise and fall of the Techmark and NASDAQ (high tech) share indices, to the ‘Old Economy’ FTSE 100.
For a primary source I have conducted an interview with a local stockbroker, representing Charles Stanley & Company Ltd.
For further information on methodology, consult appendices 1 - 8
Analysis
The Boom Period
It is inaccurate to blame a single variable on the initial boom of the sector; the sudden rise can be attributed to 5 factors
• Media & Public Hype. This is not novel, the Australian Mining Boom and the UK Property Boom are earlier examples. People bought into the stock when companies possessed no fundamental attributes to back up the share price and high P/E’s, representing an increase in expectations on earnings per share (EPS).
This shows how the market ‘bid up’ share prices way above their real value. This lead to extremely high PE ratios. For example at the height of the boom, March 000, Vodafone’s share price was 400p with an EPS of 4.64p, giving a PE ratio of 86.
In June 00, Vodafone’s share price was 80p with an EPS of 5.p, giving a PE ratio of 15. . This is a more realistic ratio.
This also lead to massive overvaluation classic in the case of small companies like Sopheon & Superscape, where the stock rose to £5 per share, but is now valued at approximately £0.15 .
This was a trend set by many Internet based companies flooding the market. The business sector they were in had very low or no barriers to entry and whilst the ‘dotcoms’ had good ideas the funding they were able to obtain was not sufficient to cover the ‘burn rate’. The capital was used so quickly (i.e. burnt) before estimated profitability could be realised. These companies had good ideas as well as niche markets, but were not sufficiently funded to represent themselves and didn’t posses robust enough business plans, with overestimated profitability.
The growth of these firms was unprecedented and their market capitalisation was overvalued compared to their net assets. An example is eBay, which offered itself on the stock market on the 4th September 18 for $18 per share. months on the company traded at around $0, a staggering rise of 1,600%, while profitability declined. Another months on the company was still to make a profit and had a market capitalisation of $7,56,85,50.00 (i.e. $7.5bn)
• High Expectations. People paid extremely high prices in ‘hope value’ for the stock. For the sector as a whole, especially the dotcom’s, people paid inflated prices for the stock due to the expectation of future profits that realistically couldn’t materialise. This ‘hope value’ was generated by the analysts who talked the stock up, as well as the herding instinct of the city, creating huge levels of demand, as they too wanted to gain the sort of returns made by other investors, greed overcame sense. This can be expressed best when we compare the share price to the asset based share value. For example Bookham Technology & Lastminute.com (September 001)
Bookham Technology Lastminute.com
Total Assets Less Current Liabilities £68,410,000 £8,455,000
Total Ordinary Shares In Issue 18,861,000 170,17,0
Asset Value Per Share £.08 £0.5
At the height of the year Bookham was trading at 5,00p, a massively inflated price over book value. It was trading at 00p at the end of 001, and is now trading at approx 74 ½ p; undervalued. It would be the opinion of the shareholders to liquidate the assets of the business because they would receive more per share.
Rising market capitalisations allowed the shares to reach the FTSE 100 & 50 indices, forcing tracker funds to buy stock. These tracker funds buy into the market as a proportion of the shares within them. For example Vodafone is the nd largest company within the FTSE 100, with a market share of 10% , this means a tracker fund who invests £100,000 in the FTSE 100 will invest £10,000 with Vodafone. Companies such as ARM Holdings and Bookham Technology reached this level of trading. This created further artificial demand for the product so the price rose further.
Further ‘hope value’ was added by the brokers whose estimates for the shares were inflated. However when we examine the EPS values for the companies rising share prices couldn’t be justified with no fundamentals
Vodafone Group
18 1 000 001 00 00E 004E
Norm EPS (p) .68 .75 4.64 .55 5. 5.7 6.6
Bookham Technology
18 1 000 001 00 00E 004E
Norm EPS (p) -4.7 -10.0 -1. -5.0 -7.8 -.8 -0.
Lastminute.com
18 1 000 001 00 00E 004E
Norm EPS (p) -0.40 -.0 -6.4 -. -8.56 5.1 15.0
• Low Asset Bases & Demonstration of Goodwill. The publicly quoted company usually acquired a private company owned and started by the management and promoters of the company. The PLC acquired the private company at an inflated price thus creating goodwill.
For example
X Ltd
Shareholders funds = £15m Property = £10m
Current Assets = £5m
Total Net Assets = £15m
X Ltd is Acquired by X.com PLC
Shareholder funds = £0m Net Assets = £15m
Goodwill = £15m
Total = £0m
This happened in many cases, notably with Vodafone with their acquisition of many smaller telecoms companies. Also large companies such as Marconi were buying up-and-coming firms and many mergers were taking place during the boom, for example supply contracts with Bookham Technology . This caused the share prices to increase as these companies could now reap larger economies of scale, which would lower their costs. An example of an inflated acquisition is AOL who paid $4. billion for Netscape.
Goodwill inflated massively as companies overpaid in order to secure the supposed massive profit growth of the future. This also precipitated the fall, when auditors forced goodwill to be depreciated leading to massive losses. For example, AOL Time Warner Inc has just announced losses of $100 bn with a large proportion being attributed to the amortisation of goodwill.
• Liquidity of Shares. Small companies’ shares are relatively limited and were only given to the financial institutions of the city via ‘placing’ . Thus there was limited liquidity in the market, shown by wide bid offer spreads. These quotes are two-way prices, the lower of which is known as the bid price (the price at which the holder can sell shares) and the higher is the offer price (the price at which the holder can buy shares).
Limited liquidity meant few shares were released by current holders when the price increased so demand for shares increased along a price inelastic supply curve. Later in the boom many companies issued more capital to increase liquidity of the market for shares, making supply more elastic and slowing share price growth.
Scarcity value causing increased demand and insufficient supply, can be seen on a demand and supply diagram
• The Profit-Signalling Mechanism. This attracted more new investors to the stock market. For example Vodafone’s share price increased from 0p in January 1 to 50p in January 000, an increase of15% , for a supposed ‘blue chip’. New entrants, such as Bookham Technology rose from ,000p to 5,00p in months a 65% increase .
Consequently supply increased and due to the factors mentioned increased demand. Demand is a ‘self-fulfilling’ prophecy, as demand increases so does the price (See Fig 1.).
As the demand increases excess demand is created at the equilibrium price and quantity of P1, Q1. This causes prices to be ‘bid-up’ to clear the excess-demand. As prices increases there is a contraction of demand and extension of supply, until equilibrium is re-established at the increased price of P, and the increased quantity of Q. As demand increases the shares become more price inelastic, as investors are willing to pay more.
The Bust Period
Here the focus is on three companies, which will act as barometers for representing the state of the technology sector as a whole
Vodafone PLC - caused the initial decline.
Bookham Technology PLC - entered the market at its peak, but consequently fell with the competition.
Lastminute.com PLC - appears to have survived the volatile nature of the market and is becoming profitable.
The bust may be attributed to the following
• Lack of Fundamentals. The market upwards trend was mainly a function of momentum; investors kept on buying in the hope that the stock would go up and up. Many investors failed to analyse the stock on a fundamental basis, i.e. ratio of market price to asset value. Thus investors were subject to a weak form of market efficiency, and did not rely on fundamental analysis. It was speculation based on market trends and naïve investing.
Vodafone caused a bust period due to this. This company is large and even this ‘blue chip’ firm was paying what appeared to be huge amounts of money in ‘hope value’, to develop the rd Generation (G) mobile telecommunications market. Vodafone overpaid world governments in order to obtain the licences to develop the technology.
This investment was necessary, otherwise the company would be deemed as ex-growth, but it was difficult to see how the firm would generate the cash needed to pay off the initial expenditure over the next 5 years. The strategy and figures were questioned. This lack of confidence in such a major company led to a downturn in the sector and forced people to examine the financial viability of their portfolios, which led to a snowball effect throughout the sector as share sales, produced falling prices.
This may be seen on a demand and supply curve
The figure shows how as demand fell, prices fell along a price elastic supply curve, produced due to a saturation of companies back into the market, thus scarcity value disappeared.
The companies lacked fundamentals to support their share price
• Poor or non existent asset backing
• Low turnover by company/low EPS in stock
• No dividends
• Shrinking Market/slowing growth
• Poor Liquidity
There was a sudden realisation after Vodafone that the market couldn’t deliver the expected profits because of oversupply in the market place.
Investors failed to realize that many of the dotcom’s and other technology companies had and still have very weak financials. Prior to the peak of technology stocks in March of 000, external financing was very easy to get for technology companies. Private investors were more than willing to invest in start-up tech companies. Those companies that were riding the tech wave could simply issue additional shares at an inflated price. Thus, cash flow problems were nonexistent for these companies. The well soon ran dry and many start-ups were unable to finance operating activities internally. The external environment was beginning to realize that many of these start-ups were not producing the results as expected. Many dotcoms and other technology-laden companies were forced into bankruptcy within the first six months since IPO.
Share price decreased so market capitalisations fell, forcing tracker funds to fall. An example of this is Bookham Technology which reached the FTSE 100 in 000, but now operates in the FTSE small cap . People started to look at shares with very high P/E Ratios to see if that premium was too optimistic.
This was the case for all companies; in March 000 their ratios were as follows
Vodafone
Price EPS PE
400p 4.64p 86.
Bookham Technology
Price EPS PE
4,000p -5.0p -160
Lastminute.com
Price EPS PE
40p -6.4p -1.5
• Weak Revenue & Earnings Base. Many tech and dot.com companies also suffered and still suffer from a weak revenue and earnings base. Early in 000, many companies with less than $1 million in sales had market caps in the billions (Vodafone & Bookham Technology). For example in June 000 Bookham Technology had a market capitalisation of (18,861,0005,00) £68, 6, 00, 0000 but a turnover of just £6.m . Companies such as TheGlobe.com made a net loss of more than $16m on sales of $5.5m .
This should have been an immediate signal to investors that a company is overvalued. Even if sales are growing exponentially, sales will have to grow for years before a billion dollar market cap can be justified. Investors had prematurely priced in years of great results and excellent earnings. When these results were not delivered in the short-term, investors reassessed their outlook on various stocks and adjusted their portfolios accordingly. This reassessment caused many investors to return to fundamental valuations. The NASDAQ market as a whole saw a 67% decline from 000-00 . This caused many billion-dollar dotcoms to be reduced to a small fraction of their year high, for example the ‘% club’ companies who lost % of their market value, e.g. the Norwegian search engine company Fast Search .
• Conservative Use of the Web to Reduce Costs. Many dotcoms did not capitalize on using the Web as a tool to reduce costs. Many investors believed that the Internet would create a distinct advantage for Web companies, while bricks and mortar companies would be at a disadvantage. It soon became apparent that margins were about the same for Internet and non-Internet companies. For example, Internet retail companies had to establish a distribution centre and invest in a large quantity of inventory, while still having to rely on a distinctly low tech postal system. This does not differ much from a bricks and mortar company as a large capital investment must be made followed by a high volume of sales to maintain operations. Most dotcoms in this space have yet to determine a way to become profitable. Many dotcoms even have losses that exceed sales (Lastminute.com is yet to announce profitable earnings). There is also the problem of certain retailing online e.g. Boo.com offered women’s clothing, but there is no system to try clothes on or compare (However the technology is being developed).
• Periphery Companies. The bust also appeared bigger because the boom had sucked in many periphery companies who were bracketed as being dotcom’s, e.g. telephone exchanges. The boom made many of these companies profitable once again, and the banks handed out indiscriminate loans, which materialised into bad debts.
• Saturation of Small Companies. The Profit-Signalling Mechanism attracted many smaller companies to join the market. A classic example of this was Bookham Technology. In the first quarter after flotation, its price had risen to £5 per share, it is now 74 ½ p . One problem with such companies was that they didn’t have enough working capital to produce a financially viable product. They had very high PE Ratios and after spending huge amounts on R & D, when the product was finally marketed, there was little demand and no sales.
Lastminute.com is the best publicised of all the companies affected by this volatile period. The company floated on the London Stock Exchange and the NASDAQ National Market on 14 March 000 and its initial share price was £4.80 per share, but in the first quarter the price fell to £1.0 . It then steadily declined. It is a true dotcom company survivor and is soon expected to become a profitable business. This is because of two factors; firstly the company is extremely well managed by two very astute entrepreneurs, secondly it has a novel idea, for which there is a genuine consumer demand.
To summarise we may attribute the bust period to
• The overvaluing of companies in the sector
• The problems faced due to oversupply within the market
• The lack of economic fundamentals possessed by the companies in question and resulting reduced confidence
• The lack of demand for the services and goods offered by the companies, as well as lack of competitiveness
• Reduced economic activity and long term global economic uncertainty e.g. Iraq
Conclusion
What is the result of the stock market gyrations over the last 5 years?
The world of e-commerce has too many companies vying for business. Market analysts have compared the crash in the internet and technology market to a forest fire that has cleared out the jungle and created space for fewer but stronger web companies. Venture capitalists will now be more careful examining business proposals and will only invest in businesses with sound commercial plans.
The wall of money that hits web entrepreneurs should shrink in size. Investors will now be more careful before speculating on hot new IPO’s, as ‘old economy’ values are now back in vogue with investors, Revenue, Earnings and Profits are benchmarks again.
Most Internet start ups failed because they were based on the premise that the internet represented a revolutionary business model. The Internet still has the potential as a tool for firms to expand their business, if they can combine it with a distinctive product and avoid ruinous price wars. For example, supermarkets will benefit from the internet because the internet is just one more outlet for the chain.
The volatility has also lead to a massive drop in confidence. There has been a flight of cash by investors to real assets, thus property prices have risen greatly. In the last year (001/00) commercial property in the south has risen by 10/1 ½% .
Finally, it may be said that now is the time to invest in Internet companies, as many are grossly undervalued. There is opportunity in the sector; however we will not see the mega profits and one must be content with a slow growth. The FTSE is now trading on 11x trend earnings, and yielding almost 4%. Dividends grow by real GDP and inflation implying that equities will return 4% plus inflation plus real GDP, consequently the equity market should return 8% .
Mind that the sample papers like Why have Shares in Internet & Technology companies been so volatile in the last few years? presented are to be used for review only. In order to warn you and eliminate any plagiarism writing intentions, it is highly recommended not to use the essays in class. In cases you experience difficulties with essay writing in class and for in class use, order original papers with our expert writers. Cheap custom papers can be written from scratch for each customer that entrusts his or her academic success to our writing team. Order your unique assignment from the best custom writing services cheap and fast!
Why have Shares in Internet & Technology companies been so volatile in the last few years?
Introduction
In 1/000, there was a belief that ‘dotcoms’ were going to change business methods and replace the ‘old economy’. People thought that Internet based companies could eliminate the cost of real estate and sales staff, reducing average total costs therefore being able to undercut the costs of traditional competitors and make higher profit margins. It was relatively easy for small companies to get funding from venture capitalists and by placing shares on OFEX or AIM. Investors believed the hype and shares boomed.
In March 000 technology shares slumped . Since then dotcoms and technology stocks have been in the doldrums, Venture capitalists have become more conservative and the Initial Public Offering (IPO) market has snapped shut since internet companies would not be able to raise much capital in the new market. Advertising revenues have collapsed, confidence has dropped out of the market and investors have lost confidence in the stocks, resulting in an oversupply of shares leading to plunging market capitalisations and share prices.
This chain of events caused the share price of Internet and Technology companies to rise to dizzy heights, then fall as quickly as they rose. In this report the volatility shown by this sector shall be analysed.
Methodology
The Information used has been both from primary and secondary sources.
Secondary data has been collected using various websites such as Moneyextra, Imiweb, Ft.com, Bigcharts and The Economist. These websites have been used to collect essential financial statistics on the companies used, as well as information about the sector. To gain more specific information I have used company reports for Lastminute.com, Bookham Technology and Vodafone. I have used these companies as barometers to indicate the relative rise and fall of the Techmark and NASDAQ (high tech) share indices, to the ‘Old Economy’ FTSE 100.
For a primary source I have conducted an interview with a local stockbroker, representing Charles Stanley & Company Ltd.
For further information on methodology, consult appendices 1 - 8
Analysis
The Boom Period
It is inaccurate to blame a single variable on the initial boom of the sector; the sudden rise can be attributed to 5 factors
• Media & Public Hype. This is not novel, the Australian Mining Boom and the UK Property Boom are earlier examples. People bought into the stock when companies possessed no fundamental attributes to back up the share price and high P/E’s, representing an increase in expectations on earnings per share (EPS).
This shows how the market ‘bid up’ share prices way above their real value. This lead to extremely high PE ratios. For example at the height of the boom, March 000, Vodafone’s share price was 400p with an EPS of 4.64p, giving a PE ratio of 86.
In June 00, Vodafone’s share price was 80p with an EPS of 5.p, giving a PE ratio of 15. . This is a more realistic ratio.
This also lead to massive overvaluation classic in the case of small companies like Sopheon & Superscape, where the stock rose to £5 per share, but is now valued at approximately £0.15 .
This was a trend set by many Internet based companies flooding the market. The business sector they were in had very low or no barriers to entry and whilst the ‘dotcoms’ had good ideas the funding they were able to obtain was not sufficient to cover the ‘burn rate’. The capital was used so quickly (i.e. burnt) before estimated profitability could be realised. These companies had good ideas as well as niche markets, but were not sufficiently funded to represent themselves and didn’t posses robust enough business plans, with overestimated profitability.
The growth of these firms was unprecedented and their market capitalisation was overvalued compared to their net assets. An example is eBay, which offered itself on the stock market on the 4th September 18 for $18 per share. months on the company traded at around $0, a staggering rise of 1,600%, while profitability declined. Another months on the company was still to make a profit and had a market capitalisation of $7,56,85,50.00 (i.e. $7.5bn)
• High Expectations. People paid extremely high prices in ‘hope value’ for the stock. For the sector as a whole, especially the dotcom’s, people paid inflated prices for the stock due to the expectation of future profits that realistically couldn’t materialise. This ‘hope value’ was generated by the analysts who talked the stock up, as well as the herding instinct of the city, creating huge levels of demand, as they too wanted to gain the sort of returns made by other investors, greed overcame sense. This can be expressed best when we compare the share price to the asset based share value. For example Bookham Technology & Lastminute.com (September 001)
Bookham Technology Lastminute.com
Total Assets Less Current Liabilities £68,410,000 £8,455,000
Total Ordinary Shares In Issue 18,861,000 170,17,0
Asset Value Per Share £.08 £0.5
At the height of the year Bookham was trading at 5,00p, a massively inflated price over book value. It was trading at 00p at the end of 001, and is now trading at approx 74 ½ p; undervalued. It would be the opinion of the shareholders to liquidate the assets of the business because they would receive more per share.
Rising market capitalisations allowed the shares to reach the FTSE 100 & 50 indices, forcing tracker funds to buy stock. These tracker funds buy into the market as a proportion of the shares within them. For example Vodafone is the nd largest company within the FTSE 100, with a market share of 10% , this means a tracker fund who invests £100,000 in the FTSE 100 will invest £10,000 with Vodafone. Companies such as ARM Holdings and Bookham Technology reached this level of trading. This created further artificial demand for the product so the price rose further.
Further ‘hope value’ was added by the brokers whose estimates for the shares were inflated. However when we examine the EPS values for the companies rising share prices couldn’t be justified with no fundamentals
Vodafone Group
18 1 000 001 00 00E 004E
Norm EPS (p) .68 .75 4.64 .55 5. 5.7 6.6
Bookham Technology
18 1 000 001 00 00E 004E
Norm EPS (p) -4.7 -10.0 -1. -5.0 -7.8 -.8 -0.
Lastminute.com
18 1 000 001 00 00E 004E
Norm EPS (p) -0.40 -.0 -6.4 -. -8.56 5.1 15.0
• Low Asset Bases & Demonstration of Goodwill. The publicly quoted company usually acquired a private company owned and started by the management and promoters of the company. The PLC acquired the private company at an inflated price thus creating goodwill.
For example
X Ltd
Shareholders funds = £15m Property = £10m
Current Assets = £5m
Total Net Assets = £15m
X Ltd is Acquired by X.com PLC
Shareholder funds = £0m Net Assets = £15m
Goodwill = £15m
Total = £0m
This happened in many cases, notably with Vodafone with their acquisition of many smaller telecoms companies. Also large companies such as Marconi were buying up-and-coming firms and many mergers were taking place during the boom, for example supply contracts with Bookham Technology . This caused the share prices to increase as these companies could now reap larger economies of scale, which would lower their costs. An example of an inflated acquisition is AOL who paid $4. billion for Netscape.
Goodwill inflated massively as companies overpaid in order to secure the supposed massive profit growth of the future. This also precipitated the fall, when auditors forced goodwill to be depreciated leading to massive losses. For example, AOL Time Warner Inc has just announced losses of $100 bn with a large proportion being attributed to the amortisation of goodwill.
• Liquidity of Shares. Small companies’ shares are relatively limited and were only given to the financial institutions of the city via ‘placing’ . Thus there was limited liquidity in the market, shown by wide bid offer spreads. These quotes are two-way prices, the lower of which is known as the bid price (the price at which the holder can sell shares) and the higher is the offer price (the price at which the holder can buy shares).
Limited liquidity meant few shares were released by current holders when the price increased so demand for shares increased along a price inelastic supply curve. Later in the boom many companies issued more capital to increase liquidity of the market for shares, making supply more elastic and slowing share price growth.
Scarcity value causing increased demand and insufficient supply, can be seen on a demand and supply diagram
• The Profit-Signalling Mechanism. This attracted more new investors to the stock market. For example Vodafone’s share price increased from 0p in January 1 to 50p in January 000, an increase of15% , for a supposed ‘blue chip’. New entrants, such as Bookham Technology rose from ,000p to 5,00p in months a 65% increase .
Consequently supply increased and due to the factors mentioned increased demand. Demand is a ‘self-fulfilling’ prophecy, as demand increases so does the price (See Fig 1.).
As the demand increases excess demand is created at the equilibrium price and quantity of P1, Q1. This causes prices to be ‘bid-up’ to clear the excess-demand. As prices increases there is a contraction of demand and extension of supply, until equilibrium is re-established at the increased price of P, and the increased quantity of Q. As demand increases the shares become more price inelastic, as investors are willing to pay more.
The Bust Period
Here the focus is on three companies, which will act as barometers for representing the state of the technology sector as a whole
Vodafone PLC - caused the initial decline.
Bookham Technology PLC - entered the market at its peak, but consequently fell with the competition.
Lastminute.com PLC - appears to have survived the volatile nature of the market and is becoming profitable.
The bust may be attributed to the following
• Lack of Fundamentals. The market upwards trend was mainly a function of momentum; investors kept on buying in the hope that the stock would go up and up. Many investors failed to analyse the stock on a fundamental basis, i.e. ratio of market price to asset value. Thus investors were subject to a weak form of market efficiency, and did not rely on fundamental analysis. It was speculation based on market trends and naïve investing.
Vodafone caused a bust period due to this. This company is large and even this ‘blue chip’ firm was paying what appeared to be huge amounts of money in ‘hope value’, to develop the rd Generation (G) mobile telecommunications market. Vodafone overpaid world governments in order to obtain the licences to develop the technology.
This investment was necessary, otherwise the company would be deemed as ex-growth, but it was difficult to see how the firm would generate the cash needed to pay off the initial expenditure over the next 5 years. The strategy and figures were questioned. This lack of confidence in such a major company led to a downturn in the sector and forced people to examine the financial viability of their portfolios, which led to a snowball effect throughout the sector as share sales, produced falling prices.
This may be seen on a demand and supply curve
The figure shows how as demand fell, prices fell along a price elastic supply curve, produced due to a saturation of companies back into the market, thus scarcity value disappeared.
The companies lacked fundamentals to support their share price
• Poor or non existent asset backing
• Low turnover by company/low EPS in stock
• No dividends
• Shrinking Market/slowing growth
• Poor Liquidity
There was a sudden realisation after Vodafone that the market couldn’t deliver the expected profits because of oversupply in the market place.
Investors failed to realize that many of the dotcom’s and other technology companies had and still have very weak financials. Prior to the peak of technology stocks in March of 000, external financing was very easy to get for technology companies. Private investors were more than willing to invest in start-up tech companies. Those companies that were riding the tech wave could simply issue additional shares at an inflated price. Thus, cash flow problems were nonexistent for these companies. The well soon ran dry and many start-ups were unable to finance operating activities internally. The external environment was beginning to realize that many of these start-ups were not producing the results as expected. Many dotcoms and other technology-laden companies were forced into bankruptcy within the first six months since IPO.
Share price decreased so market capitalisations fell, forcing tracker funds to fall. An example of this is Bookham Technology which reached the FTSE 100 in 000, but now operates in the FTSE small cap . People started to look at shares with very high P/E Ratios to see if that premium was too optimistic.
This was the case for all companies; in March 000 their ratios were as follows
Vodafone
Price EPS PE
400p 4.64p 86.
Bookham Technology
Price EPS PE
4,000p -5.0p -160
Lastminute.com
Price EPS PE
40p -6.4p -1.5
• Weak Revenue & Earnings Base. Many tech and dot.com companies also suffered and still suffer from a weak revenue and earnings base. Early in 000, many companies with less than $1 million in sales had market caps in the billions (Vodafone & Bookham Technology). For example in June 000 Bookham Technology had a market capitalisation of (18,861,0005,00) £68, 6, 00, 0000 but a turnover of just £6.m . Companies such as TheGlobe.com made a net loss of more than $16m on sales of $5.5m .
This should have been an immediate signal to investors that a company is overvalued. Even if sales are growing exponentially, sales will have to grow for years before a billion dollar market cap can be justified. Investors had prematurely priced in years of great results and excellent earnings. When these results were not delivered in the short-term, investors reassessed their outlook on various stocks and adjusted their portfolios accordingly. This reassessment caused many investors to return to fundamental valuations. The NASDAQ market as a whole saw a 67% decline from 000-00 . This caused many billion-dollar dotcoms to be reduced to a small fraction of their year high, for example the ‘% club’ companies who lost % of their market value, e.g. the Norwegian search engine company Fast Search .
• Conservative Use of the Web to Reduce Costs. Many dotcoms did not capitalize on using the Web as a tool to reduce costs. Many investors believed that the Internet would create a distinct advantage for Web companies, while bricks and mortar companies would be at a disadvantage. It soon became apparent that margins were about the same for Internet and non-Internet companies. For example, Internet retail companies had to establish a distribution centre and invest in a large quantity of inventory, while still having to rely on a distinctly low tech postal system. This does not differ much from a bricks and mortar company as a large capital investment must be made followed by a high volume of sales to maintain operations. Most dotcoms in this space have yet to determine a way to become profitable. Many dotcoms even have losses that exceed sales (Lastminute.com is yet to announce profitable earnings). There is also the problem of certain retailing online e.g. Boo.com offered women’s clothing, but there is no system to try clothes on or compare (However the technology is being developed).
• Periphery Companies. The bust also appeared bigger because the boom had sucked in many periphery companies who were bracketed as being dotcom’s, e.g. telephone exchanges. The boom made many of these companies profitable once again, and the banks handed out indiscriminate loans, which materialised into bad debts.
• Saturation of Small Companies. The Profit-Signalling Mechanism attracted many smaller companies to join the market. A classic example of this was Bookham Technology. In the first quarter after flotation, its price had risen to £5 per share, it is now 74 ½ p . One problem with such companies was that they didn’t have enough working capital to produce a financially viable product. They had very high PE Ratios and after spending huge amounts on R & D, when the product was finally marketed, there was little demand and no sales.
Lastminute.com is the best publicised of all the companies affected by this volatile period. The company floated on the London Stock Exchange and the NASDAQ National Market on 14 March 000 and its initial share price was £4.80 per share, but in the first quarter the price fell to £1.0 . It then steadily declined. It is a true dotcom company survivor and is soon expected to become a profitable business. This is because of two factors; firstly the company is extremely well managed by two very astute entrepreneurs, secondly it has a novel idea, for which there is a genuine consumer demand.
To summarise we may attribute the bust period to
• The overvaluing of companies in the sector
• The problems faced due to oversupply within the market
• The lack of economic fundamentals possessed by the companies in question and resulting reduced confidence
• The lack of demand for the services and goods offered by the companies, as well as lack of competitiveness
• Reduced economic activity and long term global economic uncertainty e.g. Iraq
Conclusion
What is the result of the stock market gyrations over the last 5 years?
The world of e-commerce has too many companies vying for business. Market analysts have compared the crash in the internet and technology market to a forest fire that has cleared out the jungle and created space for fewer but stronger web companies. Venture capitalists will now be more careful examining business proposals and will only invest in businesses with sound commercial plans.
The wall of money that hits web entrepreneurs should shrink in size. Investors will now be more careful before speculating on hot new IPO’s, as ‘old economy’ values are now back in vogue with investors, Revenue, Earnings and Profits are benchmarks again.
Most Internet start ups failed because they were based on the premise that the internet represented a revolutionary business model. The Internet still has the potential as a tool for firms to expand their business, if they can combine it with a distinctive product and avoid ruinous price wars. For example, supermarkets will benefit from the internet because the internet is just one more outlet for the chain.
The volatility has also lead to a massive drop in confidence. There has been a flight of cash by investors to real assets, thus property prices have risen greatly. In the last year (001/00) commercial property in the south has risen by 10/1 ½% .
Finally, it may be said that now is the time to invest in Internet companies, as many are grossly undervalued. There is opportunity in the sector; however we will not see the mega profits and one must be content with a slow growth. The FTSE is now trading on 11x trend earnings, and yielding almost 4%. Dividends grow by real GDP and inflation implying that equities will return 4% plus inflation plus real GDP, consequently the equity market should return 8% .
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Monday, October 1, 2012
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