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‘Wall Street Cools the Groupon’ is an article in the “Wall Street Journal”. The article explains how underwriters in a company called Groupon initiated coverage in the companies’ initial public offer. Such actions had an impact on the company’s valuation and rates of return. The article castigates journalist who creates hypes about companies poised to issue initial public offers with the aim of influencing buyer decisions. Such actions are against dividend policy and retained earnings as stipulated in the Capital Markets Act. The article further criticizes Gold Man Sachs for trying to fix the company’s share index (Smith, & Grocer, 2011). Ordinarily, shares are supposed to regulate spontaneously.


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The above article relates to business in many aspects. The first business aspect in the article is the question of companies using the media to sway public opinion. In the current, competitive world, businesses are looking out for every means possible to outdo each other. The article explains how unscrupulous businesses use the media to disseminate false information about their balance of payments. In most cases, companies that intent to launch an initial public offer exaggerate their profit margins to attract many investors. After their listing, it later turns out that the company’s profit levels are not as strong as earlier thought. It becomes difficult for people to plough back the profits.

Most journalists and media houses in the United States openly popularize companies that intent to issue initial public offers with the aim of influencing investors’ decisions. The article gives an example of Groupon, a company that was given positive coverage by the media prior to its launch on Wall Street. The fair media coverage was meant to give the company undue advantage in the market. Authors of the article reckon that the practice is immanent in many economies especially in competitive industries like banking. According to the article, companies need to be honest about their financial positions. Companies intending to cross-list must pass relevant information to investors to ensure that every person partners with the company in good faith. The article urges Wall Street to impose strict conditions on companies that use the media to influence investor decisions (Smith, & Grocer, 2011).

I have a different opinion in relation to the article’s point of view. Investors ought to be cautious when buying into companies stokes. People need to carry out careful analysis before making final decisions. This means that one must not just base on media reports. Media houses have vested interests in their reporting. This means that one must examine the financial status of the company he wants to partner with before drawing conclusions. Media reports need to be analyzed critically by any person intending to buy stocks in a company. Investors often have cross-cutting interests and, therefore, one needs to make a careful analysis before investing in a company. I submit that the author needed to have been objective on this issue because it hurts the public, unlike the private sector.

Most people have incurred phenomenal losses as a result of investing in stocks whose shares were exaggerated. Instead of focusing on the role of the media, the article needed to have offered advice to unsuspecting investors. The media exist as a business entity and, therefore, it should not be blamed when people are misinformed on certain issues. The author should have directed his anger at the public for lack of foresight. However, this should not be construed to mean that the media operates without guidelines. The media, just like any other institution operates within established legal frameworks. Any media house that propagates false information about a certain enterprise must be firmly treated in accordance with media law. Irresponsible media actions have caused many people loosing their jobs and other valuables. Customers and investors in general have suffered in many ways because of lack of openness. There have been incidences where customers have lost billions of dollars through investing in companies whose values have been exaggerated.

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