Experience Stern | News & Events

Excerpt from Stanford Social Innovation Review -- "Financial markets run on the often-unspoken assumption that human beings make perfectly rational decisions that drive capital to the highest-performing enterprises. Indeed, the finance field promulgates an image of dispassionate investors who tirelessly comb through opportunities and seamlessly integrate information to optimize their portfolios."

Excerpt from USA Today -- "Edward Altman, the Max L. Heine professor emeritus of finance at New York University’s Stern School of Business, credits federal government stimulus, saying small business loans, stimulus checks and additional unemployment insurance have allowed people to avoid bankruptcy so far. 'But these measures are only temporary' Altman said. 'At some point, they’ll run out and personal bankruptcies will surge.' In the meantime, Altman believes corporate bankruptcy filings will continue to rise, and that 2020 will prove to be one of the busiest years since the Great Recession – especially for companies with more than $100 million in total liabilities."

Excerpt from CNN -- "Still, David Yermack, a professor at NYU Stern School of Business, argued the Hertz bankruptcy had little to do with its previous private equity ownership. 'It was inevitable that a firm like Hertz, which had grossly over-expanded, would have needed to restructure itself,' Yermack said. 'The rental car industry needed to shrink.'"

Excerpt from MarketWatch -- "Facebook’s change in policy highlights the increased pressure it faces in a nation roiled by pandemic and protests. 'The decision by Unilever to join the boycott of Facebook illustrates that the pressure is likely to increase,' said Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights."

Excerpt from Town & Country -- "According to Dr. Priya Raghubir, a professor of business at New York University, the reason why it feels “right” boils down to simple psychology—and the hierarchy of human needs. 'At the bottom are very basic needs: food, water, sleep. The next level is safety, then social needs, followed by esteem and self-actualization,' she says. 'In most advanced Western economies, the basic needs of most people are met. But when anything unsettles, like the pandemic, we obsess over the basics and tend to do things like stockpile food and toilet paper. After the immediate threat is assuaged, we begin to ascend the hierarchy again. Now we want to socialize—sending cards and letters help us form connections.'”

Excerpt from Vanity Fair -- "Last week, the Fed announced that it would buy individual corporate bonds, including companies deemed fallen angels since the start of the pandemic, expanding its support for the riskiest branch of debt. Robert Wosnitzer, a professor of finance at New York University’s Stern School of Business, told me that the central bank’s announcement came after it had exhausted traditional tools like lowering interest rates. 'It’s kind of ludicrous to believe that these corporations—after 12 years of having relatively benign policies on the tax level, on the Federal Reserve level, on every single level—that they couldn’t withstand three to five months of hardship,' Wosnitzer said. “It’s insane to think about that. But that’s the world we’re living in.'"

Excerpt from Fast Company -- "I think the work from home trend is a double-edged sword, but it’s mostly good for them. I’m not sure it’s good for their employees. What I think big tech workers fail to realize is that if your job can be moved to Denver, there’s a decent chance it can be moved to Bangalore. I think Mark Zuckerberg’s greed glands are going to say, yeah, by all means, let’s figure out how we can move your job to Chicago. And then we’re going to keep moving it further and further east and cut costs."

Excerpt from Axios -- "While high-profile "mega-bankruptcies" such as Hertz and J. Crew make headlines, the total number of bankruptcies involving more than $100 million in debt is likely to be substantially lower this year than we saw during the last recession. That's according to NYU business school professor Edward Altman, who sees 192 such filings in 2020, compared with 242 in 2009."

Excerpt from Barron's -- "Aswath Damodaran has taught tens of thousands of students at New York University’s Stern School of Business how to value stocks. Outside of the classroom, he is one of the best-known experts on valuation, and is often the go-to source when reporters are trying to understand how a hot new company can have metrics that seem to defy conventional analysis."

Excerpt from Quartz -- "Advocates say that these and other problems have only intensified as large companies began buying and consolidating nursing home franchises. Around 70% of nursing homes in the US are under for-profit ownership, and, since the 2000s, private equity firms have purchased many facilities, hoping to cut costs and increase profits. One recent analysis, published by the New York University Stern School of Business, found 'robust evidence' that private equity buyouts were linked to 'declines in patient health and compliance with care standards.'"

Excerpt from The Academic Minute -- "Applications of artificial intelligence or “AI”—the use of computer software that relies on highly sophisticated, algorithmic techniques to find patterns in data and make predictions about the future—have grown in number and variety over the past decade. AI is now embedded in many products and services that businesses and consumers use in daily life, including for example internet search and road navigation."

Excerpt from SF Chronicle -- "Arun Sundararajan, an NYU business professor who studies the on-demand economy, agreed that ride prices would rise if drivers were employees. In addition, 'I think service availability is bound to suffer because this is a market that works very well,' he said. 'The extreme flexibility that Uber and Lyft provide workers now makes it much easier to cover the high-demand periods.'”

Excerpt from Bloomberg -- "There’s a danger here. As Thomas Philippon documented in his book, 'The Great Reversal,' the EU has become more competitive than the US. Its antitrust regime isn’t perfect: For example, it has cleared too many horizontal mergers. However, the increase in markups (as measured by higher profit margins) after these deals has been generally less steep than in the U.S. because the market has remained more open."

Excerpt from The Washington Post -- "So policymakers should not wait to act, said Acharya, an economics professor at New York University’s Stern School of Business. For now, interest rate increases are a non-starter given the economy’s profound weakness. But the Fed should require banks to beef up their reserves against potential losses by halting dividend payments, he said. 'You have to ensure that banks have enough capital on the balance sheet that you can afford to let these firms go bankrupt,' Acharya said. “It’s not about what’s happening right now. It’s whether you have created resilience in the financial sector to deal with what is a plausibly weak outlook.'”

Excerpt from Forbes -- “'GE wants to somehow signal to the marketplace that things are going to change,' with the auditor switch, said Joshua Ronen, an accounting professor at New York University’s Stern School of Business."

Excerpt from Vogue -- "Micro-communities act like a backstage pass or an Amex Centurion card by 'making people feel special', says Forrester’s Kodali. Private messaging and communities have the potential to boost customers’ brand empathy, which has a direct impact on brand loyalty, adds Jared Watson, assistant professor of marketing at NYU Stern School of Business. 'It allows brands to craft individualised messages for each subgroup of consumer rather than a one-size-fits-all approach.'"

Excerpt from Los Angeles Times -- "Even when Black and white households have similar financial resources, there’s still not the same level of access to commercial loans, said Rachel Atkins, a post-doctoral faculty fellow in the management and organizations department at the NYU Stern School of Business. For example, Atkins’ research is showing that Black homeowners weren’t as able to use their home equity for start-up capital as white homeowners could. 'There’s just too much evidence that Black business owners are not able to access commercial lending to the same degree,' Atkins said."

Excerpt from The Washington Post -- “'Unfortunately, if the company gives users a new way to express themselves, some of those users are likely to take advantage of the situation to spew the sort of harmful content that has long been associated with Twitter,' said Paul Barrett, deputy director of the NYU Center for Business and Human Rights."

Excerpt from Forbes -- "According to Adam Alter, a professor at New York's Stern School of Business, the author of Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked , we will find ourselves in a kind of autopilot as the 'sliding down' of all the news on Pinterest."

Excerpt from The New York Times -- "Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis."

Excerpt from Australian Broadcasting Corporation -- "In my view, COVID-19 is going to be quite dynamic and subpar, because this is not just the natural disaster, it's also a crisis of the time where both corporations have too much debt and therefore given them uncertainty on their hands, on the second wave, on economic insecurity coming from job losses."

Excerpt from Financial Times -- "Those working from home might be right to feel that out of sight means out of mind. Batia Wiesenfeld, a management professor at New York University’s Stern School of Business, says research has shown that 'if you look at the pay and promotion outcomes [of those working from home] and adjust it for their higher performance, they were disadvantaged relative to people in the office. We know that if [workers] are remote, it’s better if their manager is also remote.'"

Excerpt from The Economist -- "'There's now a large body of overwhelming evidence, much of which was pioneered by my late colleague Kathy Phillips who was a professor at Columbia University, that shows that diverse teams out-perfrom non-diverse teams in just about every way you can think of. And so the first point that I have tried to make in all that I do is that we're talking about excellence. There are equity issues, equity reasons for promoting diversity, but to me, the leading reason to push for more diversity is we want more excellence."

Excerpt from WEF Blog -- "The COVID-19 pandemic has effectively kicked off a new era in our working lives. Instead of assembling in offices, more fortunate members of the workforce gather virtually, via conferencing software. Our days, seemingly shortened by the freedom from commuting to and from offices, now include juggling personal obligations and catching up on workloads as we can, when we can. Conditions are unlikely to reset to “normal” when the pandemic has passed. This means that, since human cultural norms are established by observation and socialization, corporate culture is certain to become less tangible in this new, remote work environment. Welcome to the age of the intangible company."

Excerpt from CNBC -- "Should it go public or seek additional funding, Coupang would likely field questions from new investors who are nervous about SoftBank’s involvement and whether its recent growth, as well as its unicorn valuation, is sustainable. 'It makes it very difficult to go public if your primary funding has come from someone that the market doesn’t trust,' said NYU Stern professor Aswath Damodaran. 'At the moment, fairly or unfairly, that’s where SoftBank is, and I think it kind of contaminates every company it’s invested in.'”