{"id":35729,"date":"2022-06-03T23:21:19","date_gmt":"2022-06-03T23:21:19","guid":{"rendered":"https:\/\/harchi90.com\/companies-that-exited-russia-after-its-invasion-of-ukraine-are-being-rewarded-with-outsize-stock-market-returns-yale-study-finds-and-those-that-stayed-are-not\/"},"modified":"2022-06-03T23:21:19","modified_gmt":"2022-06-03T23:21:19","slug":"companies-that-exited-russia-after-its-invasion-of-ukraine-are-being-rewarded-with-outsize-stock-market-returns-yale-study-finds-and-those-that-stayed-are-not","status":"publish","type":"post","link":"https:\/\/harchi90.com\/companies-that-exited-russia-after-its-invasion-of-ukraine-are-being-rewarded-with-outsize-stock-market-returns-yale-study-finds-and-those-that-stayed-are-not\/","title":{"rendered":"Companies that exited Russia after its invasion of Ukraine are being rewarded with outsize stock-market returns, Yale study finds – and those that stayed are not"},"content":{"rendered":"
The almost 1,000 companies that have opted to pull out of Russia following its unprovoked invasion of Ukraine are not just benefiting from a reputational boost. They are also being rewarded by financial markets, while those who remain behind are being punished.<\/p>\n
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“We find that equity markets are actually rewarding companies for leaving Russia while punishing those that remain behind, with divergent stock performance generally corresponding with the degree of Russian exit – which holds true across regions, sectors and company sizes,” reads the Yale report. <\/p>\n
What’s more, the focus on asset write-downs and lost revenue from Russia is misplaced. “We demonstrate that the shareholder wealth created through equity gains have already far surpassed the cost of one-time impairments for companies that have written down the value of their Russian assets,” asserts the report.<\/p>\n
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\n “<\/span>‘Clearly, doing well has not been antithetical to doing good – at least when it comes to withdrawing from Russia.’“<\/span>\n <\/p>\n
\n – Jeffrey A. Sonnenfeld, Yale School of Management<\/span> \n <\/small><\/p><\/div>\n<\/p><\/div>\n
The Yale list is divided into five categories assigned grades A to F, with the latter letter being attached to companies that are \u201cdigging in,\u201d or defying public calls to exit. There are now 29 US companies in that category, although the situation remains highly fluid as corporate executives offer updates on their plans.<\/p>\n
Background:<\/strong> Yale professor monitoring companies still doing business in Russia ups the ante by highlighting those that are now ‘digging in’ <\/p>\n
The other four categories are A, the grade for \u201cwithdraw,\u201d which describes those companies making a clean break from Russia; B for \u201csuspension,\u201d for companies that are temporarily curtailing activities, while keeping their return options open; C for \u201cscaling back,\u201d or reducing some activities while continuing others; and D for \u201cbuying time,\u201d for companies that are holding off on new investments in Russia, and in many cases closely aligned Belarus, while continuing most business there.<\/p>\n
For the full list of companies:<\/strong> Visit the Yale School of Management website<\/p>\n
The report measures total shareholder returns at those companies that have exited Russia relative to those that have stayed. Researchers used Feb. 23 as their start date as that, in the US, marked Russia’s launch of its overnight, full-scale invasion.<\/p>\n
The Yale team used two end dates. The first was market close on Aril 8, as that offered a cutoff point before the start of first-quarter earnings season. That allowed the report to exclude the many other macro factors that were showing up in earnings, such as supply-chain snags and inflation, issues that led many companies to lower their analyst guidance.<\/p>\n
The second was through market close on April 19, to provide the data set a full eight weeks from the start of the invasion. As an extra check, the report measured a third time period of Feb. 23 to March 14, to track the steep selloff that came immediately after Russia invaded.<\/p>\n
Companies were organized based on the five categories of the list and were measured using a market-capitalization-weighted method, and an equal-weighted method, as the following tables illustrate:<\/p>\n