Speculation that Qantas will announce a significant change of corporate strategy at their upcoming annual general meeting. I'm sure this will be followed by claims that they are simply responding to the strategy that was proposed by the private equity team that was bidding for Qantas. Note the competing interests of the capital and the product markets here. The capital market wants to know as much as possible about QAN's future plans and strategies, so that it can best guess at how QAN will perform going forward (i.e., so that they can price the equity and debt of QAN). On the other hand, QAN's competitors also get to see what the major player (in the domestic industry in any case) is planning. Competitors may need to adjust their own strategy in response. This is an example of the "proprietary" costs of disclosure - you are giving away (potentially) valuable information to your competitors.
Tuesday, July 31, 2007
Qantas strategy update
Speculation that Qantas will announce a significant change of corporate strategy at their upcoming annual general meeting. I'm sure this will be followed by claims that they are simply responding to the strategy that was proposed by the private equity team that was bidding for Qantas. Note the competing interests of the capital and the product markets here. The capital market wants to know as much as possible about QAN's future plans and strategies, so that it can best guess at how QAN will perform going forward (i.e., so that they can price the equity and debt of QAN). On the other hand, QAN's competitors also get to see what the major player (in the domestic industry in any case) is planning. Competitors may need to adjust their own strategy in response. This is an example of the "proprietary" costs of disclosure - you are giving away (potentially) valuable information to your competitors.
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