Finance Professor: Investor Group's Plans for DuPont Will Have 'Multiplier Effect'
April 21, 2015
Contact: University Relations
Phone: 410.837.5739
Interviewed as part of a major Delaware News Journal article on the impact of activist investors' plans to restructure DuPont, University of Baltimore Associate Professor of Finance Steve Isberg says a "multiplier effect" will ripple across the region's economy if high-paying research jobs are eliminated.
"Those people [who may lose their research jobs in a restructuring of DuPont] will leave their high-income homes, impacting the housing community, which will then reverberate into the local consumer markets," Isberg says.
The article focuses on long-term efforts by activist investors to peel off segments of DuPont that are not providing returns on investment at the rate expected by the group. One of those segments—research—employs technicians, inventors and specialists who are highly paid and highly skilled.
"DuPont lives and dies by its research and development," Isberg tells the New Journal. "It needs cash flow for its research efforts. If DuPont loads itself up with debt [as [part of a restructuring] and another fixed-interest payment, that cannibalizes your ability to do future research and development."
Read the article.
Learn more about Prof. Isberg.