Corporate raiders not seen since the 1980s could re-emerge and prey upon e-learning providers. Companies whose stock prices have dropped precipitously, but which hold cash, contracts, patents, or other tangible resources that represent solid present values could be affected. It is time for the healthy companies to look within, and use this as a time to aggressively invest, diversify, and acquire assets. Avoid vulnerability. Ironically, the strategies that helped web-based learning companies survive during the dot.com collapse will almost assuredly lead to disaster in today's time, if stock prices stay too low, and companies take a "cash is king" approach. Some of the companies that have most successfully come to dominate the market could be the most vulnerable.
Podcast: http://www.beyondutopia.net/podcasts/raiders.mp3
Evidence that such things are happening already is starting to trickle forth, not from e-learning companies (not yet), but from Hollywood, where Carl Icahn acquired a significant block of Lionsgate stock when corporate executives had to sell due to margin calls. The acquisition put him at owning a 9.2% stake in the company. For those who are uncomfortable with vulture tactics, there may be some consolation in the fact that Lionsgate is not cash-rich, but it is a film-only company, and is not vertically integrated. It does not own its own distribution company. Some say that Lionsgate will be attractive to a company that owns distribution networks.
One can use the same model with e-learning content providers. They will be attractive candidates for companies that own distribution channels.
Characteristics of a Raider-Vulnerable Company
*Cash or cash equivalent reserves
*Contracts to provide services (military, government agencies, universities, corporations, solid not-for-profits)
*Low operating costs
*Low debt
*Lots of free-trading stock
*Ability to vertically integrate to increase sales / cash flow
*CEO or major shareholder margin call (or distress sale of position due to over-leveraged position, etc.) - destabilizes stock price, makes blocks available
Successful E-Learning Companies that Could be Targeted:
Learning Management Systems: (providers of solutions such as Blackboard, Desire2Learn, Angel, Moodle)
Databases and Content Management Systems: (Eedo, Sun Microsystems, Oracle)
Course Content Providers: ECollege-type companies, Skillsoft-type training content providers
Digital Assets / Data Repositories / Virtual Libraries: (EBSCO, LexisNexis, Gale, Proquest)
Infrastructure providers: (Akamai, etc)
Major Software Packages Used by Companies: (Adobe, Microsoft, Techsmith, WebEx, SourceForge, Trivantis)
Digital Content Vendors and Providers: (Apple, Amazon)
Publicly-traded Education Providers with Large Contracts with Government, etc. (Colleges and Technical Schools)
Final (rather morbid) note: First, the bears had a few snacks as people got caught in "bear traps." Now the jackals are running in packs, anticipating a feast ... a global feast...
In the words of Joe Biden, "Gird your loins!" http://www.slate.com/id/2202769/
Useful Websites:
What Is a Corporate Raider? http://www.wisegeek.com/what-is-a-corporate-raider.htm
The Hottest Investor in America: http://money.cnn.com/magazines/fortune/fortune_archive/2007/06/11/100060832/index.htm Article about Carl Icahn, who now portrays himself as a billionaire Robin Hood
A Raider at the Lionsgate? http://www.hollywoodreporter.com/hr/content_display/film/news/e3ib59b5b9afcb9854b1a82af30c0dabf64?pn=1 Article about Carl Icahn's acquisition of Lionsgate stock (result of distressed CEO sale ... margin call casualty?)
E-Learning Corgi focuses on distance training and education, from instructional design to e-learning and mobile solutions, and pays attention to psychological, social, and cultural factors. The edublog emphasizes real-world e-learning issues and appropriate uses of emerging technologies. Susan Smith Nash is the Corgi's assistant.
Monday, October 27, 2008
Subscribe to:
Posts
(
Atom
)
Blog Archive
- 2022 ( 17 )
- 2021 ( 13 )
- 2020 ( 15 )
- 2019 ( 27 )
- 2018 ( 26 )
- 2017 ( 21 )
- 2016 ( 28 )
- 2015 ( 35 )
- 2014 ( 25 )
- 2013 ( 29 )
- 2012 ( 38 )
- 2011 ( 37 )
- 2010 ( 27 )
- 2009 ( 38 )
-
2008
(
79
)
-
June
(
10
)
- Jun 27 ( 1 )
- Jun 23 ( 1 )
- Jun 19 ( 1 )
- Jun 17 ( 1 )
- Jun 16 ( 1 )
- Jun 14 ( 1 )
- Jun 12 ( 1 )
- Jun 11 ( 1 )
- Jun 09 ( 1 )
- Jun 05 ( 1 )
-
May
(
9
)
- May 26 ( 1 )
- May 22 ( 1 )
- May 21 ( 1 )
- May 18 ( 1 )
- May 15 ( 1 )
- May 11 ( 1 )
- May 09 ( 1 )
- May 05 ( 1 )
- May 01 ( 1 )
-
March
(
9
)
- Mar 30 ( 1 )
- Mar 28 ( 1 )
- Mar 25 ( 1 )
- Mar 20 ( 1 )
- Mar 15 ( 1 )
- Mar 13 ( 1 )
- Mar 11 ( 1 )
- Mar 08 ( 1 )
- Mar 03 ( 1 )
-
June
(
10
)
-
2007
(
52
)
-
December
(
14
)
- Dec 31 ( 1 )
- Dec 27 ( 2 )
- Dec 24 ( 1 )
- Dec 23 ( 1 )
- Dec 19 ( 1 )
- Dec 17 ( 1 )
- Dec 16 ( 1 )
- Dec 10 ( 1 )
- Dec 06 ( 1 )
- Dec 05 ( 2 )
- Dec 03 ( 1 )
- Dec 02 ( 1 )
-
December
(
14
)
- 2006 ( 40 )