Word: tactic
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Dates: during 1980-1989
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Chartered by the federal government in 1973 but operated as a private firm. Sallie Mae encourages banks and universities to make student loans by guaranteeing their security. Its most common tactic includes purchasing loans originally made to students from the banks themselves under the assumption that banks will lend more easily if a safety net exists to buffer the very risky and unprofitable market...
High interest rates, though, helped derail the whole tactic. They drove bond prices down just when Drysdale was counting on them to go up. The ploy was exposed in May 1982, when Drysdale defaulted on $160 million in charges it owed Chase Manhattan. Ultimately the bank lost a total of $270 million in trading expenses and interest payments. During the summer of 1982 Drysdale's parent company went out of business, and Chase Manhattan took over the portfolio of Drysdale Government Securities...
...First Interstate to buy banks in South Dakota, from which they intended to sell insurance across state borders. Unbowed, the banks have now started pressuring Congress for a legislative change to let their strategy go ahead. Citicorp Vice Chairman Hans Angermueller bluntly says that his company's tactic is "to batter at every barrier at all times." With that kind of zeal behind it, full national banking is probably not far away...
Martin Marietta's tactic was a prime example of the Pac-Man defense, whereby a threatened company responds to a takeover bid by trying to buy up its attacker's stock. Another defense is the self-tender. A company threatened by takeover of fers to buy its own shares at prices higher than the attacker...
Still another tactic involves creating new shares, thereby diluting the voting power of current stock. When those new shares are distributed to shareholders of record, the effect is to strengthen their control greatly. Directors of Dow Jones & Co., publisher of the Wall Street Journal, approved such a plan two weeks ago. While the company faces no immediate takeover threat, the new stock virtually guarantees that the heirs of Clarence W Barron, who bought the company in 1902, will continue to control...