FOXCONN loses its "blue-chip" status [BBC]

Discussion in 'User Submitted News' started by MEGAMANTROTSKY, Jun 7, 2011.

  1. MEGAMANTROTSKY
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    Member MEGAMANTROTSKY GBAtemp Fan

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    http://www.bbc.co.uk/news/business-13624798
    For those less knowledgeable in investment talk: http://www.investopedia.com/terms/b/bluechip.asp
    Here's the full story for those who do not want to bother with clicking the link.
    Warning: Spoilers inside!
    Have a happy discussion.
     
  2. Terminator02

    Member Terminator02 ヽ( 。 ヮ゚)ノ

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    i get what it means, but how does that actually affect the company other than negative publicity?
     
  3. MEGAMANTROTSKY
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    Member MEGAMANTROTSKY GBAtemp Fan

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    In short, its loss thereof undermines the company's ability to portray itself as a reliable investment for future investors. True, it could still be interpreted as "negative publicity," even then. But since it has affected company shares, its very ability to garner profit comes into question. The combination of negative publicity regarding their worker abuse, the growing inability to sustain a pool of cheap labor in China, among other factors, have assisted in this development. The loss of the blue-chip further means their exclusion from the Hang Seng Index (a monitor on China's biggest companies) can be interpreted as a "no-confidence" vote by the market heavy-hitters. In my opinion, the article touches upon this too briefly. Perhaps you could think of it as a market stigma that affects profitability?

    If that didn't answer your question, please let me know.
     
  4. DSGamer64

    Member DSGamer64 Canadian, Eh?

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    Yeah but the people who actually care about Foxconn are tech heads, I don't think they care about the investor side of the company because they still make great products and do so much for so many electronics companies.
     

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