Nike Stock Preformance

Nicole Dupuis and Megan Fahey

Financial Management

Professor Clarke

Stock Performance Project

Due April 9, 2014

 

Nike Inc.

Nike is noted by many investors and consumers to be the “the world’s largest sporting-goods company” (Townsend 2013 b). It is known for being a leader in it’s industry by employing rigorous marketing, recruiting top athletes, and employing the newest and greatest technology for its products (Swinand 2014). Though Nike faces tough competition against industry rivals such as Adidas, Nike appears to continue to be a mainstay and profitable company in the years to come.

Nike’s lowest price over the last fifty-two weeks was on July 24th 2013 at $59.95 per share. At this time, Nike was experiencing high net income increases (22 per cent) while having difficulty gaining a hold of the Chinese market. Over the course of 2013 Nike has been struggling to meet the proper fit of its clothing and the trends for the Chinese population . Not only has Nike has had trouble with the consumer market in China, but it has also experienced difficulty with higher costs for materials and labor while the Chinese economy continues to slow down in overall growth (Townsend 2013 a, Much 2013). Though Nike experienced difficult in terms of labor, materials cost and trends within the Chinese market, Nike was able raise it’s overall sales by eight per cent through online sales and continuing to be a leader in sports innovation and technology (Townsend 2013 b).

Nike’s highest stock price reached $79.85 last December (“Bloomberg 2013-2014 Stock”). Nike recently has been expanding their product line to include high-end items such as the $160 Flyknit running shoes and the Hypervenom soccer cleats priced at a premium of $225 . These products have helped increase shares (52 per cent in 2013 alone) (Townsend 2013 b). Not only do they have premiums that employ the latest technology, but Nike sponsors top athletes to wear these higher end products.

Nike’s success has largely come from its combination of rigorous marketing, endorsing top athletes, and continuing to be a leader in innovation (Swinand 2014). In regards to competition, Adidas has always been close behind Nike’s lead. Recently, Nike has been revealing new technology in its Magista soccer cleats (a traditional soccer cleat made with Flyknit technology) while Adidas premiered its upcoming Primeknit FS two weeks later. This is just in time for this summer’s upcoming FIFFA torniment. To display its new Magista, Nike has recruited several athletes such as Andres Iniesta of Spain, Mario Gotze of Germany, Thiago Silva of Brazil, and many more. While bolstering sales with top athletes, Nike, who saw sales and orders increase by 18 and 26 per cent in December, is continuing to take more of the market share from the Adidas dominated Europe (Brantley 2014).

According to a chart from Bloomberg comparing Nike and Adidas, Nike has been slowly but surely separating themselves from Adidas since February of this year. Since February, Nike has grown significantly away from Adidas. Previous to this past February, Nike and Adidas prices were increasing and decreasing closely from May 2013 through September 2013 (Bloomberg 2014 b). On the other hand, in comparison to the different market indexes, Nike has been following the fluctuations of the S&P 500 (Standard and Poor’s 500) and NASDAQ closely since May of 2013. Nike has not, however, been significantly close to the fluctuations of the DJIA (Dow Jones Industrial Average) (Marketwatch 2014 b, c, d). This is most likely because the Dow Jones Industrial Average is comprised of 30 stocks that are unrelated to Nike, such stocks include Microsoft and Disney.

Despite their recent successes of 2014, the annual rate of return for Nike has fluctuated significantly from 2008 to 2013. In 2008, Nike suffered a capital loss which resulted in a negative annual return of -19.88%. The next two years, there was about a 30% return. However, in 2011, the annual rate of return was cut more than in half to 13.57%. The capital gain was equal to 12.82% in 2011, compared to nearly 30% capital gains in in 2009 and 2010. In 2012, the annual rate of return plummeted to -46.05%. For the year 2013, the rate of return once again became positive, but this time was much greater than before. It was a 54.09% return with a capital gain of 52.40%. Secondly, for the most recent 52 week period, April 1st, 2013 to April 1st, 2014, the capital gain was equal to 27.60%. The stock price on April 1st, 2013 was $58.26, while one year later it was $74.39. Dividends declared totaled 0.90, and the annual return was 29.23% (Yahoo Finance). According to dividend and earnings per share information from Valueline on April 2, 2014, a current dividend payout ratio is 7.97%. In other words, Nike pays 7.97% of their net income to stockholders in the form of dividends. The price-earnings ratios according to Marketwatch, Yahoo Finance, and Value Line are all around 25. Price-earning ratios are calculated by dividing the market price per share by the earnings per share. Lastly, according to Yahoo Finance, Nike’s Beta is 0.70. Because this Beta is less than one, it means that Nike’s stock price and the market fluctuations are not directly correlated.

Profit margin is equivalent to the profitability a firm has. Nikes pricing power is about 9.82% which indicates that the company is not extremely profitable in terms of the money they make off of their products. For leverage, Nike has an equity multiplier of about 1.58 meaning that about a 10th of the company’s assets are financed by equity. Nike’s asset turnover ratio is about 1.44. Companies with high sales volume often will see higher ratios, therefore Nike is proving that they are doing well in terms of selling high volumes of their products. Finally for return on equity Nike’s is 22.28%  which means it is a fairly profitable company in terms the return on the products they sell.

Nike is one of the most widely recognized and commanding brands in the sporting-goods market. With its branding, advertising, and innovation, Nike will continue to be a mainstay in leading the market well into the future (Swinand 2014). Nike’s directional forecast, according to Bloomberg’s Stock Graph for a 1 year period, appears to steadily be increasing steadily as the year progresses (Bloomberg 2014 a). This can be supported by Marketwatch’s 5 year stock prices graph which is steadily increasing to the present day (Marketwatch 2014 a). Nike’s future appears to be strong, with North America and Europe being the major force behind their increasing growth. Nike will focus innovation in running, football, basketball and men’s training to continue to remain the world’s largest sporting-goods company (Team 2014, Townsend 2013 b). Nike will also continue to recruit top athletes such as Lebron James to market their premium products. By incorporating top American basketball players and demonstrating strong performance even in the face of severe weather, Nike will continue to remain a dominant force in North America. In Central and Eastern Europe Nikes sales and future orders rose to 17 and 13 per cent respectively in the second quarter. Nike will continue to focus on this region in the future. As for China, Nike will have to overcome it’s difficulty with customer tastes and trends while incorporating products more suited to Chinese consumers (Team 2014, Much 2013).

 

 

References

 

 

Bloomberg.  (2014). [Interactive graph illustration of Nike stock prices for 2013 to 2014]. Nike Stock Graph Accessed from Bloomberg Stock Charts. Retrieved from http://www.bloomberg.com/quote/NKE:US/chart

 

Bloomberg.  (2014). [Interactive graph illustration of Nike stock prices as compared to Adidas stock prices for 2013 to 2014]. Nike and Adidas Stock Graph Accessed from Bloomberg Stock Charts. Retrieved from http://www.bloomberg.com/quote/NKE:US/chart

 

Brantley, C. (2014, March 25). Nike’s Future Growth Does Not Hinge on the World Cup.  The Motley Fool.  Retrieved from http://www.fool.com/investing/general/2014/03/25/nikes-future-growth-does-not-hinge-on-the-world-cu.aspx

 

Marketwatch. (2014). [Interactive graph illustration of Nike stock prices for a 5 year period until March 16]. Nike Stock Data Access from Marketwatch. Retrieved from http://www.marketwatch.com/investing/stock/NKE/charts?symb=NKE&countrycode=US&time=12&startdate=1%2F4%2F1999&enddate=4%2F8%2F2014&freq=1&compidx=none&compind=none&comptemptext=Enter+Symbol%28s%29&comp=none&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013

 

Marketwatch. (2014). [Interactive graph illustration of Nike stock prices for the year of 2013 to 2014 as compared to DJIA]. Nike Stock Data Access from Marketwatch. Retrieved from http://www.marketwatch.com/investing/stock/NKE/charts?symb=NKE&countrycode=US&time=8&startdate=1%2F4%2F1999&enddate=4%2F8%2F2014&freq=1&compidx=DJIA&compind=none&comptemptext=Enter+Symbol%28s%29&comp=none&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013

Marketwatch. (2014). [Interactive graph illustration of Nike stock prices for the year of 2013 to 2014 as compared to DJIA]. Nike Stock Data Access from Marketwatch. Retrieved from http://www.marketwatch.com/investing/stock/NKE/charts?symb=NKE&countrycode=US&time=8&startdate=1%2F4%2F1999&enddate=4%2F8%2F2014&freq=1&compidx=NASDAQ&compind=none&comptemptext=Enter+Symbol%28s%29&comp=none&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013

 

Marketwatch. (2014). [Interactive graph illustration of Nike stock prices for the year of 2013 to 2014 as compared to S&P 500]. Nike Stock Data Access from Marketwatch. Retrieved from http://www.marketwatch.com/investing/stock/NKE/charts?symb=NKE&countrycode=US&time=8&startdate=1%2F4%2F1999&enddate=4%2F8%2F2014&freq=1&compidx=SP500&compind=none&comptemptext=Enter+Symbol%28s%29&comp=none&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013

 

Marketwatch. (2014). [Stock Overview Table for Nike for March 26, 2014]. Nike Stock Data  Overview Access from Marketwatch. Retrieved from http://www.marketwatch.com/investing/stock/NKE?CountryCode=US

 

Much, M. (2013, June 28). Nike Picks Up Profit Pace But Hits A Wall In China; Q4 Earnings Advance 27%; Athletic shoe giant sees lower Chinese revenue over the next 2 quarters. Investor’s Business Daily. Retrieved from http://www.lexisnexis.com.library.emmanuel.edu:2048/hottopics/lnacademic/?

Nike Historical Stock Prices. (2008-2014). [Online tool to indicate stock prices for Nike from 2008 to 2014]. Nike Historical Price Accessed from Historical Price Lookup. Retrieved from http://investors.nikeinc.com/Investors/Stock-Information/Historical-Price-Lookup/default.aspx

Nike Historical Dividends. (2008-2014). [Online tool to indicate dividend prices for Nike from 2008 to 2014]. Nike Historical Price Accessed from Dividends. Retrieved from http://investors.nikeinc.com/Investors/Stock-Information/Dividends/default.aspx

 

Nike Inc. Annual Report On Form 10-K. (2013). Selected Financial Data [Data file]. Retrieved from http://investors.nikeinc.com/files/doc_financials/AnnualReports/2013/docs/nike-2013-form-10K.pdf

 

Swinand, P. (2013) With its suite of competitive strengths, Nike may have turned the corner in China. Morningstar. Retrieved from http://library.morningstar.com.library.emmanuel.edu:2048/Stock/analyst-report?t=NKE&region=USA&culture=en-US

Team, T. (2014, March 19). NIKE Earnings Preview: Growth in North America and Europe to Drive Nike. Forbes. Retrieved from http://www.forbes.com/sites/greatspeculations/2014/03/19/nike-earnings-preview-growth-in-north-america-and-europe-to-drive-nike/

Townsend, M. (2013, June 29). China’s slump hurts Nike forecast;

Revenue in North America surges 12%, pushing global sales up 7.4% in 4th quarter. The Toronto Star. Retrieved from http://www.lexisnexis.com.library.emmanuel.edu:2048/hottopics/lnacademic/?

 

Townsend, M. (2013, December 20). Nike profits boosted by higher-priced shoes, online growth; Sporting-goods company jumps on global health trend with premium products. The Toronto Star. Retrieved from http://www.lexisnexis.com.library.emmanuel.edu:2048/hottopics/lnacademic/?

 

Valueline. (2014). Nike Full Research Report [Data File]. Retrieved from http://www3.valueline.com/dow30/f6403.pdf

Yahoo Finance. (2008-2013). [Online tool to indicate stock prices for Nike from 2008 to 2013]. Yahoo Finance Historical Prices. Retrieved from http://finance.yahoo.com/q/hp?s=NKE&a=11&b=31&c=2008&d=11&e=31&f=2013&g=m

Yahoo Finance. (2013, 2014). [Online tool to indicate dividend prices for Nike from 2013 to 2014]. Yahoo Finance Historical Prices. Retrieved from http://finance.yahoo.com/q/hp?s=NKE&a=03&b=1&c=2013&d=03&e=1&f=2014&g=v

Yahoo Finance. (2014). [Stock Overview Table for Nike for March 26, 2014]. Nike Stock Data Summary Access from Yahoo Finance. Retrieved from http://finance.yahoo.com/q?s=NKE

 

 

A Comparison of America and China: Intrinsic v. Extrinsic Motivation and Cultural Influences

Owen Burton, Nicole Dupuis, Allison Londregan,

Devan Moulton, Anna Stabler

Professor McKechnie

Group Research Paper

Due November 18, 2013

A Comparison of America and China: Intrinsic v. Extrinsic Motivation and Cultural Influences

Just Do It. Nike’s slogan makes it sound so simple, unfortunately humans generally need a little extra push when it comes to accomplishing a task.  People are usually motivated by some type of reward. Rewards can be broken down into two major categories: extrinsic and intrinsic. Culture has a huge effect on the way people are motivated. Cultures, such as American and Chinese, are motivated both intrinsically and extrinsically in varying degrees. Both the Chinese and American populations respond better to intrinsic forms of motivation rather than extrinsic forms. The reasons each culture responds better to intrinsic motivation differs greatly between the two cultures. Determining these reasons is what makes the comparison between these two cultures so interesting.

Intrinsic and Extrinsic Motivation

Rewards are used to motivate employees to perform a given task in an efficient and effective manner. According to Edwin Locke and Gary Latham “rewards that self administered for goal approximation facilitate perceived self efficacy and ensure on going goal commitment”(Locke & Latham., 1990: 268).

Intrinsic motivation is a motivated behavior that a person becomes invested in for personal reasons. Intrinsic motivation causes a person to become internally invested in a task as it appeals to their interests. Completion of an intrinsically motivated task causes a person to obtain satisfaction from the activity itself. “If individuals do significantly better quality work or produce greater quantity of works as a result of trying for challenging goals, they may come to expect more intrinsic rewards in return for their better work.” Thus they may become dissatisfied if such rewards are not forthcoming. Thus, employees will be far more likely to exert full effort when they are given appropriate goals that are appropriate for the task at hand (Locke & Latham., 1990: 242).

“Extrinsic motivation is aroused when the pleasure comes from outcomes to which task performance leads” (Locke & Latham., 1990: 56). An example of this would be tangible rewards which come in the form of money, recognition, or promotion.  When an employee is motivated by external rewards, they are not personally invested in the task, rather they are motivated by the recompense they are going to receive (Locke & Latham., 1990).

Motivations greatly differ based on societal values. American and Chinese societies both obtain a higher amount of motivation from intrinsic rewards, however the intrinsic rewards received in each culture differ greatly based on what is considered socially acceptable (Jiacheng, Lu & Francesco, 2010).

America

Culture can be defined as “the collective programming of the mind which distinguishes the members of one human group from another” (Jiacheng et al.,2010: 221).  American culture promotes the individual; Americans are taught and influenced by this since childhood. Americans  are highly intrinsically motivated as a means of reaching the highest level of personal performance possible. Along the way to achieving this goal, Americans seek recognition both in the intrinsic and extrinsic form. This is reflected not only in individuals but in America’s market economy as well (Jiacheng, et al., 2010).

In corporate America, promotions and pay-raises have become expected occurrences; because of this entitled mindset managers have had to go beyond traditional extrinsic motivational tactics, such as pay and bonuses, as a means of motivating their employees (Sonawane, 2008). When managers are determining how to reward their employees it is essential to take factors such as socio-economic conditions, educational background, and demographic subcultures into account (Kashifi, 2011). When taking these factors into account, managers have found the greatest amount of motivation comes from the implementation of intrinsic rewards in the workplace. American employees have ranked things such as security, interesting work, opportunity for advancement, appreciation, company and management, and other intrinsic aspects of the job over pay. Americans traditionally value their own happiness in the workplace over monetary incentives. Continually Americans place open communication, effects on family life, the kind of work, and the quality of management over wages (Sonawane, 2008). It is clear that America is a society that values recognition and comfort above simple monetary rewards.

        Intrinsic motivators play a role in how much satisfaction an employee receives from a job. Employees who are intrinsically motivated are more satisfied in accomplishing a given task than those who are extrinsically motivated. Employees who receive extrinsic rewards tend to feel a lesser amount of satisfaction when completing a task. This can lead to a lower level of job happiness and can eventually lead to the employee seeking a different employment opportunity (Cho & James, 2012). It is important for businesses in the United States to keep their employees intrinsically motivated, otherwise they will have the inability to maintain talent in their workforce.

There is a direct correlation leading to job satisfaction when a job’s rewards are consistent with personal work values. This alignment also leads to a higher level of work commitment. As a well-developed society, the socio-economic status of America is reasonably high in comparison to other countries. Because of this, children are raised to value intrinsic rewards over extrinsic rewards. The majority of Americans do not face an urgent worry that their basic human needs will not be met. The reason American’s are able to place such a high value on intrinsic rewards is because extrinsic rewards have already fulfilled the basic needs of most of the population. Meeting basic needs through extrinsic rewards is a prerequisite for intrinsic rewards to have an effect (Kashefi, 2011).

While those in corporate America are most powerfully motivated by intrinsic rewards, when looking at lower level occupations, extrinsic rewards such as monetary benefits become more important to workers in that sector. Overall, formal rewards have a better impact on Americans than informal ones. A formal reward may or may not be monetary but the primary foundation for any reward program is recognition. Praise and appreciation by themselves are considered informal recognition and are useful in motivating employees to sustain their performance between formal rewards but are mostly insufficient motivators when not used in conjunction with formal rewards (Sonawane, 2008).

China

Chinese culture promotes working towards improving their society as a whole. Culture can influence members of a society through various mediums such as the government. China’s culture is reflected in its government, which provides low wages and benefits since the population prides itself on community rather than individual advancement. Because of the government’s strong hold on businesses, pay and benefit, extrinsic motivation is almost non-existent. Government policy can reveal the traditions and morality of a society. China’s policies reflect a society contingent upon the betterment of it’s population. Though extrinsic motivation is nearly absent in the Chinese workplace, employees can still be satisfied in terms of cultural aspects related to their society (Buck, Liu & Skovoroda. 2008.).

In regards to job satisfaction, how Chinese employees view their work determines their happiness within their position. Chinese workers who view their employment as a career have overall higher job satisfaction compared to those who view their employment as a job. The value that the Chinese place the highest importance on for job satisfaction is job security that is reflected in cultural values such as harmony, stability of society, and relationships (Lan, Okechuku, Zhang, & Cao, 2013.). Satisfaction is not the only determinant of happiness, cultural ideals also influences employee happiness.  Because of culture, Chinese employees do not readily welcome appreciation. Overall Chinese employees would rather be viewed as good contributors to a project but not publically receive recognition for their accomplishments. This unwillingness to receive praise stems from the cultural ideal of collectivism, which emphasizes the interdependence of every human.  (Jiacheng Lu & Francesco, 2010). Chinese workers evaluate job satisfaction in terms of group welfare. This is reflected in what is needed to be satisfied with employment in a society in which jobs are controlled by the government.

The Chinese government not only reflects the motivators of its society but also enhances them. In China, most executive appointments within Chinese firms are made by the state and pay is calculated by seniority and job type. The government who focuses on equity rather than using money as a motivator will pay at most $12,000.   This practice eliminates the possibility of using intrinsic motivation for individualistic intentions. Chinese employees rarely receive tasks which are driven by extrinsic motivation since firms are controlled by the government which does not offer incentives for performance in the pay of promotion or increased pay  (Buck et al., 2008.). Because of this, extrinsic motivation is nearly eliminated from the Chinese workplace. Chinese employees instead find motivation within their society; they work hard to improve their society, which is underlined by government policy.

Chinese and American cultures are vastly different. America’s culture defines itself in individualistic ventures whereas China rallies around bettering their society. (Hofstede, 1993) The predominant reason for intrinsic rewards being the primary motivator for both Chinese and Americans differ greatly between the two cultures. The Chinese culture employs intrinsic motivation through the individual’s desire to improve the society as a whole, whereas American culture uses intrinsic motivation for personal gains (Buck et. al, 2013 and Kashifi, 2011). China almost solely relies on intrinsic motivation to drive its workers compared to America which uses a combination of intrinsic and extrinsic motivators (Buck et al, 2013 and Sonawane 2008 and Kashifi 2011). This is reflected in their governments; America’s government heavily provides for the individual while China’s government favors groups within society. (Jiacheng wt. al, 2010) Differences in culture can greatly affect the values that people learn as they grow older. The way someone is brought up can either increase their level of intrinsic motivation or keep it the same. Therefore cultures that contribute to high level of increased intrinsic motivation will often be more successful (Ren, 2010).

References

Buck, T., Liu, X., & Skovoroda, R. 2008. Top executive pay and firm performance in china. Journal of International Business Studies, 39(5): 833-850.

Cho, Y. J., & Perry, J. L. 2012. Intrinsic motivation and employee attitudes: Role of managerial trustworthiness, goal directedness, and extrinsic reward expectancy. Review of Public Personnel Administration, 32(4): 382-406.

Hofstede, G. 1993. Cultural constraints in management theories. Executive (19389779), 7(1): 81-94.

Jiacheng, W., Lu, L., & Francesco, C. A. 2010. A cognitive model of intra-organizational knowledge-sharing motivations in the view of cross-culture. International Journal of Information Management, 30(3): 220-230.

Kashefi, M. 2011. Structure and/or Culture: Explaining Racial Differences in Work Values. Journal of Black Studies 42(4): 638-64.

Locke, E., & Latham, G. 1990. A Theory of Goal Setting & Task Performance: 56. Englewood Cliff, NJ.: Prentice-Hall.

Lan, G., Okechuku, C., Zhang, H., & Cao, J. 2013. Impact of job satisfaction and personal values on the work orientation of chinese accounting practitioners. Journal of Business Ethics, 112(4): 627-640.

Li, W., Liu, X., & Wan, W. 2008. Demographic effects of work values and their management implications. Journal of Business Ethics, 81(4): 875-885.

Ren, T. 2010. Value congruence as a source of intrinsic motivation. Kyklos, 63(1): 94-109.

Sonawane, P.  2008. Non-Monetary Rewards: Employee Choices & Organizational Practices. Indian Journal of Industrial Relations 44(2): 256-71.

Zhou, Y., Zhang, Y., & Montoro-Sánchez, Á. 2011. Utilitarianism or romanticism: The effect of rewards on employees’ innovative behaviour. International Journal of Manpower, 32(1): 81-98.

How Ebola Affects Biotech Stocks from a Liberal and Marxist Prospective

Nicole Dupuis

PIER

Professor Gabrielle

Research Paper

Due November 24, 2014

How Ebola Affects Biotech Stocks from a Liberal and Marxist Prospective

Once known as a rare disease is now a full blown epidemic in West Africa as of recent, thousands have died or have been infected with the viral disease which causes high fever, diarrhea, vomiting, respiratory disorders, hemorrhaging and death for over 70% that it plagues (“Ebola Virus” n.d.). For those in Africa who are high risk for catching the disease there are also high risks in terms of stocks and profits overseas in the U.S. Many investors are closely watching the Ebola epidemic play out and are investing and selling biotech stock that involves government backed funding or promise of future and FDA approvals vaccines so quickly it can be called a rollercoaster ride (Wang et. al, 2013; Rooney, 2014). When the events are taken from two very different perspectives, a Marxist and Liberal perspective, it almost seems like there is a positive outcome or a negative outcome that will proceed after the epidemic. From a liberal point of view, the epidemic is now at the forefront of American’s minds and thus a vaccine will be developed due to demand that West Africans don’t because of poverty (Ratzan and Francis, 2014; King 2002). In contrast to this a Marxist perspective would be that of the “haves” (American capitalists) and the “have-nots” (poor West African nations). Because of the epidemic and capitalism, American investors are preying upon suffering Ebola victims and thus creating more of a gap as profits from stocks rise (Wang et. al, 2013; Prychitko n.d.).

Ebola is a viral disease which causes febrile hemorrhagic disease, meaning that after a week of incubation the patient develops a high fever, diarrhea, vomiting, respiratory disorders and hemorrhaging which can eventually lead to death (Leroy et. al, 2014). It is believed that contact with live or dead animals can transmit the disease since one of the cases in the 1990’s involved a Swiss ethnologist falling ill near the Ivory Coast after preforming an autopsy on a dead chimpanzee. Another case in the 90’s noted that a village became infected when the children helped carry and butcher a chimp carcass found in the forest (Leroy et. al, 2014). It is believed though that bats are carriers for the virus after several victims were reported to have contact with bats and several other diseases such as Hendra and Nipah virus are known to be transmitted through fruit contaminated with fruit bat saliva (Leroy et. al, 2014).

As of September 14, 2014 there was a total of 4507 suspected and confirmed cases of Ebola in West Africa. Many of the victims are 15 to 44 years old and the fatality rate is estimated to be  70.8%. By November the number of suspected and confirmed cases of Ebola is predicted to double (“Ebola Virus” n.d.). Since the first recorded case of 2014, the virus continues to be transmitted but can be prevented since it is spread through the contact of bodily fluids (“Ebola Virus” n.d.). Because most parts of West Africa lacks paved roads, medical facilities, safe drinking water and housing transmission rates of disease can be astonishing (Garrett, 1996).

In today’s world disease is no longer expected to remain in its country of origin. Daily, millions of people cross boards and even as many as one million a week travel between developing and developed countries who can carry diseases and may not even be aware of it (Garrett, 1996). This occurred recently when a man from West Africa traveled without displaying symptoms until days after reaching his destination And with the disease possibly spreading within 21 days, hundreds of people could become infected (Garrett, 1996). Because of the uncertainty and fear caused by 24 hour news with warnings and alerts many Americans fear that the disease could easily be carried over (as it has) from West Africa (Ratzan and Francis, 2014). Though many of countries, especially West African countries do not have the resources to develop drugs to combat disease such as Ebola, when that same disease reaches the United States many turn to pharmaceutical companies to protect against a “nontraditional threat” (King, 2002). “During the 1990’s, American scientists, public health officials and defense experts argued that ‘emerging diseases’ presented a threat to American national security, international development and global health (King, 2002)”. With many traveling at rates that previously would have been unheard of many viruses can travel and even mutate into forms unaffected by pharmaceuticals (King, 2002).Public health of the United States and other developed nations though is intended to protect citizens from external threats such as disease. Now that Ebola has reached American soil it now becomes an issue of public safety but also an issue of national security (King, 2002). There has been an obsession of boarders in terms of nation-states and of source of origin in the case of disease and illness. Many modern day diseases are named for their suspected origin such as Ebola and West Nile virus (King, 2002). Now that there is a demand and profitability due to fear and threats against public health and the defense of the United States researchers are now developing drugs for Ebola since it can be carried over from poor countries (Garrett, 1996).

Since Ebola has killed thousands and it predicted to infect more the United States public is on high alert which can be traced through stock trends. Stocks biotech organizations such as Canadian Tekmira Pharmaceuticals, BioCryst Pharmaceuticals and NewLink Genetics have been on rollercoaster since Ebola has appeared in December 2013 (“Ebola Virus” n.d.). Pharmaceutical companies such as these are directed impacted by importation of the disease onto U.S. soil by accidental or for medical treatment and by potential use by either the government or hospitals. Tekira Pharmaceuticals stock increased drastically after the FDA approved use of a drug in U.S. patients with Ebola. Shares have also constricted since then and the company announced that it will produce limited batches of the potentially life saving drug which will be available in December. BioCryst Pharmaceuticals has been another company that announced plans to develop a drug used to treat Ebola whose stocks have been unsteady recently. Newlink Genetics though is partnering with the World Health Organization and other agencies to make a vaccine and its shares increased by 57% recently (Rooney, 2014). Similar infectious diseases show similar trend patterns in terms of stock performance for biotech companies. A study done by Yi-Hsien Wang and 2 other collogues of Taiwan biotech stock performance during Enterovirus, Dengue fever and others show a similar impact of disease upon biotech stocks (Wang et. al, 2013). They concluded that infectious disease has a positive influence on biotech stock but when the disease became worse investors would try to sell the sock and thus had no yield or a negative yield. It appears that only that the initial outbreak had profits in terms of stock. It appears that there is a correlation between outbreak, spread and disease and stock but it is not clear if an epidemic is favorable to these biotech companies. It appears though that biotech stock related to disease is high risk and fluctuates fast and easily (Wang et. al, 2013).

When viewing the events of epidemics and their affect on biotech companies a Marxism perspective can be focused down to his proposed struggle between the “haves” and “have-nots”. Marx proposed that capitalism is comprised of a struggle between the bourgeoisie and the proletariat classes that would eventually lead to monopolies, lower wages, and new social order. When applying Marxism to Ebola and the biotech stock market there are a few parallels that can be drawn; first that there is a class of “haves” (stock holders) and “have-nots” (sick West African poor civilians) caused by American capitalism. Second is that capitalism is clearly seen in terms of “haves” and the “have-nots” in terms of demand for pharmaceuticals. These lifesaving drugs are only demanded by Americans (who investors thus invest in) since many West Africans cannot afford them (King 2002). Lastly it could be said that the capitalism is exploiting the epidemic, meaning that investor’s are profiting from the struggle of poor sick civilians. With shares rapidly increasing during the onset of the epidemic it could be said that investor’s are taking advantage of the proletariat class of sick West Africans (Wang et. al, 2013; Prychitko n.d.). Also because of the nature of the unplanned market (stock market in this case) there are huge swings in business activity (stock shares, buying and trading, etc.) (Prychitko n.d.).

As opposed to a Marxist view of the events in West Africa and their affect on biotech stock, Liberalists would see this state as beneficial to both parties, West African civilians and investors. Poor countries such as West African nations are subjected to horrible diseases brought about by unsanitary conditions (Dorn, 2014;Garrett, 1996). Since they do not have the buying power that Americans do, there is no demand for pharmaceuticals that could save lives (Dorn, 2014; King, 2002). Because they are demanded due to fear and that investors are willing to take a bet on such as risk, drug companies could eventually allow poor countries to purchase vaccines at a discount while selling to others at a premium and that regulation standards of developed nations would forestall generic manufacturing. Overall by expanding into both underdeveloped countries and developed countries the drug companies could make profits needed to support time and research that goes into the drugs (Dorn, 2014; King, 2002). Without free market standards this would not be possible due to costs, limited product and lack of demand (Dorn, 2014).

When viewing the events of epidemics and their affect on biotech companies a Marxism perspective can be focused down to his proposed struggle between the “haves” and “have-nots”. Marx proposed that capitalism is comprised of a struggle between the bourgeoisie and the proletariat classes that would eventually lead to monopolies, lower wages, and new social order. When applying Marxism to Ebola and the biotech stock market there are a few parallels that can be drawn; first that there is a class of “haves” (stock holders) and “have-nots” (sick West African poor civilians) caused by American capitlaism. Second is that capitalism is clearly seen in terms of “haves” and the “have-nots” in terms of demand for pharmaceuticals. These lifesaving drugs are only demanded by Americans (who investors thus invest in) since many West Africans cannot afford them (King 2002). Lastly it could be said that the capitalism is exploiting the epidemic, meaning that investor’s are profiting from the struggle of poor sick civilians. With shares rapidly increasing during the onset of the epidemic it could be said that investor’s are taking advantage of the proletariat class of sick West Africans (Wang et. al, 2013; Prychitko n.d.). Also because of the nature of the unplanned market (stock market in this case) there are huge swings in business activity (stock shares, buying and trading, etc.) (Prychitko n.d.).

Both perspectives shed light on what could be happening during this Ebola epidemic in terms of demand and stocks. While a Marxism would see this situation as exploitative and directly supports a “have” and “have-not” view, liberalism sees that fear and protectionist actions could help West African due to increased demand for pharmaceuticals that would normally have no demand due to low income for countries that do need vaccines (Wang et. al, 2013; Prychitko, n.d.; Dorn, 2014; King, 2002). Either way biotech companies seeing the benefits of increased attention and possible profits to be made are proposing manufacturing plans along with government backing and FDA approvals (Wang et. al, 2013; Rooney, 2014). As the epidemic continues there is sure to be more highs and lows in terms of stock marked by the progression or recession of this horrible disease.

Bibliography

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Rooney, Ben. “The Ebola Stocks: Effect of an Outbreak.” CNN Money. October 24, 2014. Accessed November 5, 2014. http://money.cnn.com/2014/10/24/news/ebola-stocks/.

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Ratzan, Scott C., and Kenneth P. Moritsugu. “http://www.tandfonline.com/doi/pdf/10.1080/10810730.2014.977680.” Taylor and Francis. October 30, 2014. Accessed November 24, 2014. http://www.tandfonline.com/doi/pdf/10.1080/10810730.2014.977680.

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