New HQ can signal share price peak.

With the amount of media coverage devoted to any large company’s intention to build a new headquarters, its surprising to me that there isn’t more commentary on share price performance before and after construction. As former hedge-fund manager Andy Kessler points out in the WSJ, a new lavish office can indicate it’s time to sell:

When a company announces it is moving its executives into a lavish palace, it’s often time to get out.

Consider the Frank Gehry-designed IAC Building in Manhattan, completed in 2007. It’s the deconstructivist-style headquarters for InterActiveCorp , owners of CollegeHumor and Tinder. I find it ugly. And IAC stock deconstructed itself, going from around $40 in 2007 to under $15 two years later, though it has since rebounded.”

I have not managed to find any recent comprehensive data on this subject, but I find it interesting nonetheless. Particularly so as it applies to private companies where financial data is not readily available. Having spent most of my career in private markets, the latter may be why I find nonfinancial indicators so fascinating.

Please follow the link to the article for a list of additional examples, as well as a couple counterexamples.

Source: Andy Kessler | "When to Sell? Look at the HQ" | The Wall Street Journal | 04/09/2017 | Visit