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hexaware planning to delist from the stock market – is the quarterly performance pressure too much ?
there was a recent article in the news that indian it services provider – hexaware was planning to de-list from the stock market and go private .
it is evident that the stock price depends on the quarterly performance and it has to beat the previous performance . this results in short term views and if a company wants to look at a long term goal , it is penalized – it might acquire a company or invest money in products that may or may not pay off in the long term .
to make such bets , the company has to stop looking at beating the previous quarter’s performance .
the pressure from activist investors – who have purchased a large number of shares – to declare dividends or return in the form of stock price appreciation is very high.
the computer maker – dell actually went private just for this reason.
tesla , the electric car maker , almost went private – when elon musk , the ceo announced that he had secured funding at 420 $ per share . but it had not . currently the price of tesla is around 865 $ per share ( June 4 2020 )