The Russian “Exodus”. How companies benefited from pulling out of Russia

McDonalds (MCD), Starbucks (SBUX) and Netflix (NFLX) are among the list of companies that exited the Russian market after the unprovoked invasion of Ukraine on Feb. 24th. Nearly 1000 companies have left the country, and not only have they kept their reputation, but they are also being rewarded by financial markets, while those who remain behind are being punished. That’s according to a new report from Yale Professor Jeffrey Sonnenfeld and his research team at the Yale School of Management. The team has been monitoring almost 1,300 companies that do business in Russia and has kept a list to highlight the decisions companies have made about staying or leaving since the start of the war.

“We find that equity markets are actually rewarding companies for leaving Russia while punishing those that remain behind, with divergent stock performance generally corresponding with the degree of Russian exit — which holds true across regions, sectors and company sizes,” reads the Yale report.

What’s more, the focus on asset write-downs and lost revenue from Russia is misplaced. “We demonstrate that the shareholder wealth created through equity gains have already far surpassed the cost of one-time impairments for companies that have written down the value of their Russian assets,” asserts the report.

The Yale list is divided into five categories assigned grades A to F, with the latter letter being attached to companies that are “digging in,” or defying public calls to exit. There are now 29 U.S. companies in that category, although the situation remains highly fluid as corporate executives offer updates on their plans. The findings indicate that those companies with higher grades are clearly faring better than those with grades D and F. The market-cap weighting is likely a more accurate representation of category performance, as it reflects actual financial markets more closely, giving larger companies a greater weighting than smaller ones, the researchers noted. Source 


For the full list of companies: Visit the Yale School of Management website


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