Investment Terms

Killer bees are companies or individuals—such as investment bankers, accountants, attorneys, and tax specialists—that help target firms avoid being taken over by an unwanted suitor. Their job is to devise and implement anti-takeover defence strategies, which generally consist of making the target less attractive or more difficult or costly to acquire.
When a company targets another one for acquisition, it will usually first approach its board of directors. If rebuffed, the acquirer could then return with a better bid, walk away, or seek to bypass management by initiating a tender offer directly to shareholders.
Should takeover advances turn unfriendly or hostile, killer bees may be brought on board. Their job is to come up with feasible ways to make life uncomfortable for the prospective buyer, similar to how their namesake stings its victims when provoked until they back off and go away.
Killer bees rose to prominence during the 1980s hostile takeover craze. Back then, a category of investors with deep pockets, known as raiders, began buying undervalued companies and then controversially dismembering them to bag a quick profit. Corporate America wasn't used to this type of behaviour and enlisted the help of specialists to defend against these attacks.
Killer bees would present a series of options to the target's board based on its individual circumstances and the characteristics of the company seeking to buy it. To foil a hostile takeover attempt, they generally aim to make the prey either too expensive to acquire or so unattractive that the predator loses interest.

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Killer bees are companies or individuals—such as investment bankers, accountants, attorneys, and tax specialists—that help target firms avoid being taken over by an unwanted suitor. Their job is to devise and implement anti-takeover defence strategies, which generally consist of making the target less attractive or more difficult or costly to acquire.When a company targets another one for acquisition, it will usually first approach its board of directors. If rebuffed, the acquirer could then return with a better bid, walk away, or seek to bypass management by initiating a tender offer directly to shareholders.Should takeover advances turn unfriendly or hostile, killer bees may be brought on board. Their job is to come up with feasible ways to make life uncomfortable for the prospective buyer, similar to how their namesake stings its victims when provoked until they back off and go away.Killer bees rose to prominence during the 1980s hostile takeover craze. Back then, a category of investors with deep pockets, known as raiders, began buying undervalued companies and then controversially dismembering them to bag a quick profit. Corporate America wasn't used to this type of behaviour and enlisted the help of specialists to defend against these attacks.Killer bees would present a series of options to the target's board based on its individual circumstances and the characteristics of the company seeking to buy it. To foil a hostile takeover attempt, they generally aim to make the prey either too expensive to acquire or so unattractive that the predator loses interest.

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The cockroach theory refers to a market theory that states when a company reveals bad news to the public, many more related, negative events may be revealed in the future. Bad news may come in the form of an earnings miss, a lawsuit, or some other unexpected, negative event.
The term cockroach theory comes from the common belief that seeing one cockroach is usually evidence there are many more.
The cockroach theory is a nonscientific theory that is predicated on the idea that a company's fortunes are dependent on both external and internal forces, and may not just be affected by one piece of bad news. Put simply, when you see one cockroach, there may be many more you can't see right away. After all, one cockroach usually means there are more lying around in the dark.
So when a company is negatively affected by external forces, it is unlikely that its industry peers are immune to those same forces. Therefore, when one company's misfortunes are revealed to the public, it is likely that similar misfortunes will befall other similarly affected companies.
Earnings surprises or misses are indicators of industry trends, particularly if they occur for more than one company in an industry. If one isolated company in a sector shows an earnings surprise, it could be ignored. However, if more than one company announces an earning surprise or miss, it could be a strong indicator that other companies in the industry will have similar earnings results.

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The cockroach theory refers to a market theory that states when a company reveals bad news to the public, many more related, negative events may be revealed in the future. Bad news may come in the form of an earnings miss, a lawsuit, or some other unexpected, negative event. The term cockroach theory comes from the common belief that seeing one cockroach is usually evidence there are many more.The cockroach theory is a nonscientific theory that is predicated on the idea that a company's fortunes are dependent on both external and internal forces, and may not just be affected by one piece of bad news. Put simply, when you see one cockroach, there may be many more you can't see right away. After all, one cockroach usually means there are more lying around in the dark. So when a company is negatively affected by external forces, it is unlikely that its industry peers are immune to those same forces. Therefore, when one company's misfortunes are revealed to the public, it is likely that similar misfortunes will befall other similarly affected companies.Earnings surprises or misses are indicators of industry trends, particularly if they occur for more than one company in an industry. If one isolated company in a sector shows an earnings surprise, it could be ignored. However, if more than one company announces an earning surprise or miss, it could be a strong indicator that other companies in the industry will have similar earnings results.

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The colloquial term sushi bond is used to describe a bond issued by a Japanese company in a market outside of Japan and denominated in a currency other than the yen. The most common issuing currency is the U.S. dollar.
A sushi bond is essentially a type of Eurobond. That is, it is an international bond issued in a currency that is not native to its issuer. In this case, the issuer is Japanese and the currency is usually the U.S. dollar.
Sushi bonds bear a fixed rate of interest and can be short-term or long-term. They are primarily issued by Japanese corporations for Japanese investors. They become more popular investments when the value of the yen is weak. By contrast, a bond issued by a Japanese company outside of Japan but denominated in Japanese yen is known as a Euroyen bond.
Japanese institutional investors find them attractive because they exist outside of the jurisdiction of the Bank of Japan and therefore do not count toward regulations limiting ownership of foreign securities. Japanese institutions, corporations, and insurance companies that wish to add some currency diversification to their bond portfolios are logical buyers.
Japanese companies may issue such bonds to capitalize on investment opportunities, to access low-cost financing, or to refinance foreign currency liabilities. The attractiveness of the sushi bond with both buyers and sellers rises and falls with currency exchange rates.
One unusual characteristic of the sushi bond is that both the buyers and the sellers are usually Japanese, even though they are foreign currency bonds. The bonds can be bought directly or through the secondary bond markets.

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The colloquial term sushi bond is used to describe a bond issued by a Japanese company in a market outside of Japan and denominated in a currency other than the yen. The most common issuing currency is the U.S. dollar.A sushi bond is essentially a type of Eurobond. That is, it is an international bond issued in a currency that is not native to its issuer. In this case, the issuer is Japanese and the currency is usually the U.S. dollar.Sushi bonds bear a fixed rate of interest and can be short-term or long-term. They are primarily issued by Japanese corporations for Japanese investors. They become more popular investments when the value of the yen is weak. By contrast, a bond issued by a Japanese company outside of Japan but denominated in Japanese yen is known as a Euroyen bond.Japanese institutional investors find them attractive because they exist outside of the jurisdiction of the Bank of Japan and therefore do not count toward regulations limiting ownership of foreign securities. Japanese institutions, corporations, and insurance companies that wish to add some currency diversification to their bond portfolios are logical buyers.Japanese companies may issue such bonds to capitalize on investment opportunities, to access low-cost financing, or to refinance foreign currency liabilities. The attractiveness of the sushi bond with both buyers and sellers rises and falls with currency exchange rates.One unusual characteristic of the sushi bond is that both the buyers and the sellers are usually Japanese, even though they are foreign currency bonds. The bonds can be bought directly or through the secondary bond markets.

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Value investing is an investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value. Value investors actively ferret out stocks they think the stock market is underestimating. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond to a company's long-term fundamentals. The overreaction offers an opportunity to profit by buying stocks at discounted prices—on sale.
The basic concept behind everyday value investing is straightforward: If you know the true value of something, you can save a lot of money when you buy it on sale. Most folks would agree that whether you buy a new TV on sale, or at full price, you’re getting the same TV with the same screen size and picture quality.
Stocks work in a similar manner, meaning the company’s stock price can change even when the company’s value or valuation has remained the same.
Stocks, like TVs, go through periods of higher and lower demand leading to price fluctuations but that doesn't change what you’re getting for your money.

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Value investing is an investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value. Value investors actively ferret out stocks they think the stock market is underestimating. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond to a company's long-term fundamentals. The overreaction offers an opportunity to profit by buying stocks at discounted prices—on sale.The basic concept behind everyday value investing is straightforward: If you know the true value of something, you can save a lot of money when you buy it on sale. Most folks would agree that whether you buy a new TV on sale, or at full price, you’re getting the same TV with the same screen size and picture quality.Stocks work in a similar manner, meaning the company’s stock price can change even when the company’s value or valuation has remained the same. Stocks, like TVs, go through periods of higher and lower demand leading to price fluctuations but that doesn't change what you’re getting for your money.

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Capital investment is the procurement of money by a company in order to further its business goals and objectives. The term can also refer to a company's acquisition of long-term assets such as real estate, manufacturing plants and machinery.
In either case, the money for capital investment must come from somewhere. A new company might seek capital investment from any number of sources, including venture capital firms, angel investors and traditional financial institutions. The company uses the capital to further develop and market its products. When a new company goes public, it is acquiring capital investment on a large scale from many investors.
An established company might make a capital investment using its own cash reserves, or seek a loan from a bank. If it is a public company, it might issue a bond in order to finance capital investment.
There is no minimum or maximum capital investment. It can range from less than $100,000 in seed financing for a start-up, to hundreds of millions of dollars for massive projects undertaken by companies in capital-intensive sectors such as mining, utilities and infrastructure.

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Capital investment is the procurement of money by a company in order to further its business goals and objectives. The term can also refer to a company's acquisition of long-term assets such as real estate, manufacturing plants and machinery.In either case, the money for capital investment must come from somewhere. A new company might seek capital investment from any number of sources, including venture capital firms, angel investors and traditional financial institutions. The company uses the capital to further develop and market its products. When a new company goes public, it is acquiring capital investment on a large scale from many investors.An established company might make a capital investment using its own cash reserves, or seek a loan from a bank. If it is a public company, it might issue a bond in order to finance capital investment.There is no minimum or maximum capital investment. It can range from less than $100,000 in seed financing for a start-up, to hundreds of millions of dollars for massive projects undertaken by companies in capital-intensive sectors such as mining, utilities and infrastructure.

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