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Finance: What is Disinvestment? 3 Views
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Description:
What is Disinvestment? Disinvestment is essentially a $5 word for sell off. It usually refers to a company liquidating aspects of its asset portfolio. While it can mean tradable securities, it can also refer to subsidiaries or divisions that no longer fit the company’s future business plans. An example would be General Electric, when it sold off its appliance and GE Finance divisions to focus on energy and jet engine manufacturing.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Credit
- Terms and Concepts / Econ
- Terms and Concepts / Ethics/Morals
- Terms and Concepts / Regulations
Transcript
- 00:00
finance a la shmoop what is disinvestment? all right you got a couple
- 00:07
of choices disinvestment dat-investment and but disinvestment refers to the [Man walks through door]
- 00:12
process of a well a kind of whiny financial boycott like you think it
- 00:17
comes out of Yale or something it's a common thing among university students [Boy studying in library]
- 00:21
who are high on intellectual horsepower and low on self-awareness or how the
Full Transcript
- 00:26
world actually works like the little rich kid who complains to Daddy about
- 00:30
the underpaid workers in his shirt factory as the kid drives away that [Boy driving sports car]
- 00:35
shiny new convertible BMW with the you know souped-up stereo set yeah that's
- 00:40
kind of what it's like well students often protest universities investing in
- 00:44
things like tobacco and oil and types of technology companies and that's really
- 00:49
kind of funny and sad because you know students late teenagers really have tons
- 00:54
of professional investment experience and life experiences and they've seen
- 00:59
lots of market cycles and they really know what they're doing when it comes to
- 01:04
the long cycles of the stock market and or they're advised by professors who [Woman working on laptop]
- 01:10
really have risked their own capital to build a big oh wait there none of that
- 01:14
so yeah that's the funny part and the sad part is that well for better or
- 01:18
worse over time those industries that they want to boycott for their school's
- 01:23
endowment which then pays for scholarships for underprivileged kids
- 01:27
have traditionally been really good industries to invest in like they've had
- 01:31
good investment returns yeah like technology come on give me a break just
- 01:35
goes up right so when the students push the university to sell its point zero
- 01:40
zero zero one percent ownership of their stake in whatever company well then the
- 01:46
university loses those good investment gains and that endowment money that was [Money vanishes from vault]
- 01:50
supposed to be earmarked for scholarships for the underprivileged not
- 01:55
the children of rich daddies in you know BMWs while that money just isn't there
- 02:00
just goes away so who did all that disinvestment hurt well students five
- 02:04
ten twenty years later who actually needed the scholarship money and didn't
- 02:09
get it but at least the boycott really affected how Chevron drilled for oil there
- 02:13
right [Chevron drills hole into sea bed]
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