I look for business in which I think I can predict what they’re going to look like in ten to fifteen years’ time. Take Wrigley’s chewing gum. I don’t think the Internet is going to change how people chew gum.
Acquisitions and mergers are very important to big businesses. It helps their competitive advantage by keeping competitions low and company power high. But why are they so important?
Being in control of more assets give you power, it’s simply how the rich get richer.
Yesterday, AT&T won big with the approved merge with Time Warner for a bid of $85 billion dollars. This partnership means they gained more ownership, popularity, and more money. Being in control of more assets give you power, it’s simply how the rich get richer. These large corporations are looking to “join forces” as a united team, but who are they targeting?
Acquisitions don’t always work in a companies favor, yet it can be a good sign of positive cashflow.
Who’s Their Target?
Small businesses in the “growing phase” are a target for large corporations. With flourishing popularity, these small businesses get acquired for their innovative products or services that will help the large corporations grow beyond its capacity. Acquisitions and mergers don’t always work in a companies favor, yet it can be a good sign of positive cash flow (if the large corporation is lucrative). On the other hand, it is not uncommon for large corporations to merge together. For example, there is a lot of talk about CMCSA (Comcast, $32.06) and DIS (Disney, $106.95) placing a bidding war for FOX (21st Century Fox, $43.36). Also, MSFT (Microsoft, $101.94) recently acquired a large technology company, GitHub for over $7 billion dollars.
There are many factors that may fall into place before a large corporation buys another business, but these deals are happening constantly and won’t always appear on the news. To find a companies acquisitions, you can go to their Quarterly/Annual reports or visit the company’s website. Acquisitions bring a whole new meaning to the popular phrase, “If you can’t beat them, join them”.
Christians are always speaking of trusting in God and not worrying about gaining riches, but don’t we need money to live? We have to pay for gas for our car, pay for groceries, pay for the home we live in…pay for everything! However, many people love to misuse bible scriptures. Let’s read the whole scripture:
For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.- 1 Timothy 6:10 (KJV)
Looking at the first five words of the scripture, it says,”For the love of money”. Loving money won’t give you anything but more problems. More money can lead to greed and other “fleshly” desires that God does not honor and these problems will only destroy your life. There is nothing wrong with working for wealth, but money is powerful and you can’t serve both God and money.
No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and money.- Matthew 6:24
As investors and entrepreneurs, we are always searching for business opportunities with better cash flow, but don’t become so involved and no longer trust in God. Money is here today and gone tomorrow, but God reigns forever. Instead of asking God for more money, ask him for wisdom and knowledge so when you have money you know how to manage it wisely.