The World Cup and Corporate Finance

By: Diego Samaniego, Head of Corporate Finance.

A month of soccer, 32 countries, and the whole world as spectators. Clubs are put aside and people unite for the colors of a country. The voices of the fans sing the national anthem like a war cry that wins matches before the first whistle. The ball begins to spin and with it the illusion of the countries to win the World Cup.

This soccer tournament that features favored teams and results without logic has great similarities to corporate finance and the stock market.

The discussions about the best way to play soccer are endless and each one has several well-known personalities. There are the verticalists, the defensive, the touch-and-go players and also the center-headers and goal scorers. But, at the end of the day, the most important thing is to win games.

Companies that are listed on the stock exchange play their games with clear rules like those of soccer, but with different financial strategies. History has shown over time that two companies that do the same thing, but apply different financial decisions, can achieve different results. Some win many finals and others fall by the wayside.

The winner of the World Cup not only wins the World Cup, but also obtains: economic prizes, the most valued players, the most jerseys sold, the country's renown and a privileged position in the ranking of the best teams in the world.

Unlike the World Cup where there is only one champion, the stock market offers a championship where several companies can occupy the top places in a ranking that rewards the businesses that generate the highest annual profits and profitability.

And just as in soccer, where the champion keeps the cup, the most profitable companies in the stock market obtain their rewards in the form of better rates and longer financing terms, in addition to attracting the interest of the investing public.