he rapid selling of securities, such as stocks, bonds and commodities.

The increase in supply leads to a decline in the value of the security.

Investopedia explains 'Sell-Off'

A sell-off may occur for many reasons. For example, if a company issues a disappointing earnings report, it can spark a sell-off of that company's stock. Sell-offs also can occur more broadly. For example, when oil prices surge, this often sparks a sell-off in the broad market (say, the S&P 500) due to increased fear about the energy costs companies will face.
Read more: http://www.investopedia.com/terms/s/sell-off.asp#ixzz1sUfgzQEC

JOINT VENTURES
A joint venture (JV) is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributingequity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares. In European law, the term 'joint-venture' (or joint undertaking) is an elusive legal concept, better defined under the rules of company law. In France, the term 'joint venture' is variously translated as 'association d'entreprises', 'entreprise conjointe', 'coentreprise' or 'entreprise commune'. But generally, the term societe anonyme loosely covers all foreign collaborations. In Germany, 'joint venture' is better [1] represented as a 'combination of companies' (Konzern). With individuals, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers". The venture can be for one specific project only - when the JV is referred to more correctly as a consortium (as the building of the Channel Tunnel) - or a continuing business relationship. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements, franchise and brand use agreements, management contracts, rental agreements, for one-time contracts. The JV is dissolved when that goal is reached. Some major joint ventures include Dow Corning, MillerCoors, Sony Ericsson, Penske Truck Leasing, Norampac, and Owens-Corning. A joint venture takes place when two parties come together to take on one project. In a joint venture, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major corporations also use this method in order to diversify. A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the burden of the project, as well as the resulting profits. Since money is involved in a joint venture, it is necessary to have a strategic plan in place. In short, both parties must be committed to focusing on the future of the partnership, rather than just the immediate returns. Ultimately, short term and long term successes are both important. In order to achieve this success, honesty, integrity, and communication within the joint venture are necessary.

ANTI TRUST POLICY

An antitrust policy is designed to affect competition. The general goal behind such a policy is to keep markets open and competitive. These regulations are used by different governments around the world, although the laws often vary. In most countries, antitrust policies are written into law. In the United States, they are mainly handled by the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice. The FTC mainly deals with issues of consumer protection while theAntitrust Division is generally responsible for criminal violations of an antitrust policy. Most countries do not have two regulatory bodies as is seen in the US. In Europe, for example, the Competition Directorate is the sole government body that generally handles anantitrust policy. It is common throughout the world for disputes regarding these policies to be handled by a judicial body. In the United States, the ideas for such policies began after the Civil War when large trusts began to emerge in important industries such as petroleum and cotton. Concerns of abuse led to the first antitrust policy, known as the Sherman Act. This piece of legislation declared that actions that restrain trade or create monopolies are anticompetitive and therefore illegal. ANTI TRUST POLICY

Governments have a number of policies that affect monopoly and market power. Two that are intended to reduce monopoly are regulationand antitrust policy. However, there are also policies that purposely increase monopoly. Patent and copyright laws, for example, protect monopoly. The belief that it is socially useful to encourage people to develop new processes and products has led to laws that provide monopoly rewards for those who do so. Patent laws are a case in which there is some recognition that the analysis of efficiency is static but the economy is dynamic. Competition may mean price takers in a static model, but in a dynamic model it can be striving for positions of temporary monopoly. Joseph Schumpeter argued that this competition for positions of temporary monopoly was the most important type of competition in a market economy. He argued that it provides a "gale of creative destruction." Entrepreneurs would find new products and ways of producing things that would make obsolete the old products and ways of production. In turn their positions would sooner or later be destroyed by new entrepreneurs. For Schumpeter, the essence of market economies was change. Despite Schumpeter's argument, most economists have argued that the government should take measures to attack the efficiency loss of monopoly. Antitrust policy is one way to do this. Antitrust policy attempts to make companies act in a competitive manner by breaking up companies that are monopolies, prohibiting mergers that would increase market power, and finding and fining companies that collude to establish higher prices.

The antitrust laws in the United States are stricter and more comprehensive than those of other industrialized nations. Many other industrialized nations, perhaps because they focus on the possibility of foreign competition, have minimal antitrust law. In the United States, the original antitrust law was the Sherman Act of 1890, with important extensions added in 1914. Two government agencies have authority to enforce antitrust laws, the Antitrust Division of the Justice Department and the Federal Trade Commission. In addition, the laws allow companies, organizations, or persons who are adversely affected by actions that violate the antitrust acts to sue for damages. The economic case for antitrust policy is based on efficiency. Monopoly can lead to an inefficient use of resources when compared to the competitive result. Furthermore, there are clear cases in which businesses have tried to act as monopolists, charging high prices with restricted outputs. Nonetheless, there are unanswered questions about how great the net benefits of antitrust enforcement are. There are conditions under which monopoly may be more efficient than competition. When an industry has increasing returns to scale, two small firms will require more resources to produce a given amount of output than one large firm. Trying to keep two such firms in existence by, for example, preventing merger will keep the economy inside its production-possibilities frontier, making the economy production inefficient. Further, the argument that competition is more efficient than monopoly relies on static equilibrium analysis that assumes fixed production functions, demand curves, and supply curves for resources. Some economists, following Schumpeter, argue that the competition that matters in a market economy is the struggle to find ways to change these constraints and to gain temporary monopoly power. It is possible that antitrust laws can be used to attack behavior that is economically efficient and socially desirable. For example, suppose that a company is extremely well-managed and excels at producing quality products at low prices. Such a company will be profitable and will grow to dominate its industry. Its dominance and large profits would appear to indicate that it was a monopoly and could trigger antitrust action. In fact, there are actual cases similar to this. The Alcoa case of 1945 seems to be one. Alcoa was found innocent of monopolistic practices by the district court, but an appeals court reversed this decision and found it guilty. Justice Learned Hand explained in the decision: "It was not inevitable that it [Alcoa] should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to

embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel." Hand's decision-makes clear that Alcoa maintained its position with managerial excellence. There was no evidence that it restricted output to keep prices high, the sins of monopoly which lead to economic inefficiency. On the contrary, it kept prices low and expanded output. Hand's reasoning, subsequently reaffirmed in other cases, is difficult to justify economically. There are clearly cases in which antitrust laws move the economy closer to a competitive state. There also seems to have been times when antitrust actions were misguided, when antitrust actions did not result in lower prices and higher quantities for consumers. Unfortunately, economists have traditionally been so sure that antitrust laws were beneficial that they have not sought to measure whether the net benefit of those laws was in fact positive. We really do not know how much good, if any, that antitrust actions accomplish.
PROXY CONTEST A strategy that may accompany a hostile takeover. A proxy contest occurs when the acquiring company attempts to convince shareholders to use their proxy votes to install new management that is open to the takeover. The technique allows the acquired to avoid paying a premiumfor the target. also called proxy fight. Read more: http://www.investorwords.com/3921/proxy_contest.html#ixzz1sUigL5BZ

A proxy fight or proxy battle is an event that may occur when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes (i.e. votes by one individual or institution as the authorized representative of another) to install new management for any of a variety of reasons. Shareholders of a public corporation may appoint an agent to attend [1] shareholder meetings and vote on their behalf. That agent is the shareholder's proxy. In a proxy fight, incumbent directors and management have the odds stacked in their favor over those trying to force the corporate change. These incumbents use various corporate governance tactics to stay in power including: staggering the boards (i.e. having different election years for different directors), controlling access to the corporation's money, and creating restrictive requirements in the bylaws. As a result, most proxy fights are unsuccessful. However, it has been recently noted that proxy fights waged [citation needed] by hedge funds are successful more than 60% of the time . [edit]Examples An acquiring company, frustrated by the takeover defenses of the management, may initiate a proxy fight to install a more compliant management of the target.

Stockholder dissidents opposed to an impending takeover in the view that it will dilute value may also use a proxy fight to stop it. An example of a proxy fight took place within Hewlett-Packard, when the management of that company sought to take over Compaq. Opponents of the Compaq takeover lost the [2] fight. The management, under Carly Fiorina, remained in place, and the merger went ahead. In the absence of any looming takeover, proxy fights can come about because dissidents are unhappy with management, as with Carl Icahn's effort in 2005-2006 to oust a majority of the board of Time [3] Warner. An early history of proxy fighting, detailing such 1950s battles as the fight for control of some of America's largest corporations, including theBank of America and the New York Central Railroad, can be found in David Karr's 1956 volume, Fight for Control.

SHARE REPURCHASE
Stock repurchase (or share buyback) is the reacquisition by a company of its own stock. In some countries, including the U.S. and theUK, a corporation can repurchase its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity; [1][2] that is, cash is exchanged for a reduction in the number of shares outstanding. The company either retires the repurchased shares or keeps them as treasury stock, available for re-issuance. Under U.S. corporate law there are five primary methods of stock repurchase: open market, private negotiations, repurchase 'put' rights, and two variants of self-tender repurchase: a fixed price tender offer and a Dutch auction. In the late 20th and early 21st centuries, there was a sharp rise in the volume [3] of share repurchases in the United States: $5 billion in 1980 rose to $349 billion in 2005. It is relatively easy for insiders to capture insider-trading like gains through the use of "open market repurchases." Such transactions are legal and generally encouraged by regulators through safeharbours [1][2] against insider trading liability.
Contents
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1 Purpose

1.1 Tax-efficient distribution of earnings

2 Methods

o o o

2.1 Open-market 2.2 Fixed price tender 2.3 Dutch auction

3 Types

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3.1 Selective buy-backs 3.2 Other types

4 External links 5 Further reading 6 Notes

[edit]Purpose Companies making profits typically have two uses for those profits. Firstly, some part of profits can be distributed to shareholders in the form of dividends or stock repurchases. The remainder, termed stockholder's equity, are kept inside the company and used for investing in the future of the company. If companies can reinvest most of their retained earnings profitably, then they may do so. However, sometimes companies may find that some or all of their retained earnings cannot be reinvested to produce acceptable returns. Share repurchases are an alternative to dividends. When a company repurchases its own shares, it [4] reduces the number of shares held by the public. The reduction of the float, or publicly traded shares, means that even if profits remain the same, the earnings per share increase. Repurchasing shares when a company's share price is undervalued benefits non-selling shareholders (frequently insiders) and extracts value from shareholders who sell. There is strong evidence that companies are able to profitably repurchase shares when the company is widely held by retail investors who are unsophisticated and [2] more likely to sell their shares to the company when those shares are undervalued. By contrast, when the company is held primarily by insiders and institutional investors, who are more sophisticated, it is [2] harder for companies to profitably repurchase shares. Companies can also more readily repurchase shares at a profit when the stock is liquidly traded and the companies' activity is less likely to move the [2] share price. Financial markets are unable to accurately gauge the meaning of repurchase announcements, because [1] companies will often announce repurchases and then fail to complete them. Repurchase completion [1] rates increased after companies were forced to retroactively disclose their repurchase activity. Normally, investors have more adverse reaction in dividend cut than postponing or even abandoning the share buyback program. So, rather than pay out larger dividends during periods of excess profitability then having to reduce them during leaner times, companies prefer to pay out a conservative portion of their earnings, perhaps half, with the aim of maintaining an acceptable level ofdividend cover. Some evidence of this phenomenon for United States firms is provided by Alok Bhargava who found that higher dividend payments lower share repurchases though the converse is not true (Bhargava, 2010). Aside from paying out free cash flow, repurchases may also be used to signal and/or take advantage of undervaluation. If a firm's manager believes their firm's stock is currently trading below its intrinsic value they may consider repurchases. An open market repurchase, whereby no premium is paid on top of current market price, offers a potentially profitable investment for the manager. That is, he may repurchase the currently undervalued shares, wait for the market to correct the undervaluation whereby prices increases to the intrinsic value of the equity, and re issue them at a profit. Alternatively, he may undertake a fixed price tender offer, whereby a premium is often offered over current market price, sending a strong signal to the market that he believes the firms equity is undervalued, proven by the fact that he is willing to pay above market price to repurchase the shares. Another reason why executives, in particular, may prefer share buybacks is that executive compensation is often tied to executives' ability to meet earnings per share targets. In companies where

there are few opportunities for organic growth, share repurchases may represent one of the few ways of improving earnings per share in order to meet targets. Thus, safeguards should be in place to ensure that increasing earnings per share in this way will not affect executive or managerial rewards. For example, Bhargava (2011) reports that stock options exercised by top executives increase future share repurchases by U.S. firms. Higher share repurchases, in turn, significantly lowered the Research and Development expenditures that are important for raising productivity. Further, increasing earnings per share does not equate to increase in shareholders value. This investment ratio is influenced by accounting policy choices and fails to take into account the cost of capital and future cash flows, which are the determinants of shareholder value. Share repurchases avoid the accumulation of excessive amounts of cash in the corporation. Companies with strong cash generation and limited needs for capital spending will accumulate cash on the balance sheet, which makes the company a more attractive target for takeover, since the cash can be used to pay down the debt incurred to carry out the acquisition. Anti-takeover strategies therefore often include maintaining a lean cash position, and at the same time the share repurchases bolster the stock price, making a takeover more expensive.