The following ran in the Sept. 6, 2013, edition of The Wall Street Journal. Business professor Hemang Desai provided expertise for this story.
September 13, 2013
By LIAM PLEVENAnd JOE LIGHT
With the economy recovering and markets on a tear, American corporations are snapping into action—spinning off subsidiaries, buying back stock and making other moves that are widely viewed as telling signals of how insiders value their own firms.
A recent flurry of high-profile activity raises a question for investors about how to interpret those signals: Buy or beware?
Maybe the markets have learned" that investing in these companies can pay off, says Hemang Desai, a professor of accounting at Southern Methodist University who has written about both spinoffs and stock splits. "Maybe the hedge funds have learned."...