Abstract

CEOs background’s, experiences and characteristics shape them into the person they are, and so play a role in their decision making process. On top of this, M&A activity has become increasingly important in the strategic role of firms, and investigating how these decisions are made by the most important players is crucial. Hence I investigated the impact that tenure, education and being a shareholder or a member of the founding family had on a CEO’s propensity to engage in acquisitions. The results showed that an education in economics and being an owner-manager both have a positive impact on acquisition activity, while tenure appears to be insignificant.

Other Stuff

I am also currently managing my parent’s portfolio and have an active interest in bonds and equity derivatives pricing. The stock I am currently interested in is Airbus:

start = as.Date("2018-01-01") 
end = as.Date("2021-09-20")
getSymbols(c("EADSY", "BOE", "^GSPC", "WTI", "CPI"), src = "yahoo", from = start, to = end)

## [1] "EADSY" "BOE"   "^GSPC" "WTI"   "CPI"

stocks = as.xts(data.frame(A = EADSY[, "EADSY.Adjusted"],
B = BOE[, "BOE.Adjusted"], C = GSPC[,"GSPC.Adjusted"], D = WTI[, "WTI.Adjusted"], E = CPI[, "CPI.Adjusted"]))
names(stocks) = c("Airbus", "Boeing","S&P 500", "Crude Oil", "CPI")
index(stocks) = as.Date(index(stocks))

stocks_graph = tidy(stocks) %>% 
  
  ggplot(aes(x=index,y=value, color=series)) + 
  geom_line() +
  facet_grid(series~.,scales = "free") + 
  labs(title = "Airbus and other relevant prices: Stock Prices January 2018 - September 2021",
                                              
                                              subtitle = "End of Day Adjusted Prices",
                                              caption = " Source: Yahoo Finance, medium.com") +
  
  xlab("Date") + ylab("Price") +
  scale_color_manual(values = c("Red", "Black", "DarkBlue","Orange", "Blue"))
stocks_graph

The reason I find Airbus so interesting is because it has not yet fully experienced the recovery. Being mainly a European equity, it did not have the benefits of the federal reserve and massive bailouts that were taking place in the US markets. Here are some of the pain points I have come across in my research of this company:

1. Increasing demographic and economic growth
2. People wanting to get back to travelling
3. Decreasing oil prices (about 10 USD PPB from before COVID) -> strong negative correlation between the ppb and airline stock price
4. 4% projected traffic growth over the next 20 years
5. 39 200 projected new aircraft to be sold in 20 years
6. Continuously expanding is the aerospace and space exploration sector which is constantly gaining momentum
7. Defense sector also important part of their business
8. Traded in euros so resistant to upcoming inflation in us equity markets