Study Guide 4: Traders and Corporate Raiders
The study guide to Wall Street can be purchased as an instant PDF download for $5.95. After reading the description below, if you wish to purchase this study guide, just click the “Add to Cart” button and follow the simple instructions. Don’t worry – if you change your mind mid-order, simply exit the browser. Once payment is completed you will receive a link that allows you to download the guide to your computer right away. You may save it to your computer’s hard drive and print it out when and if you need to.
Director Oliver Stone dedicated this 1987 film dealing with Wall Street greed and redemption to his father, himself a stockbroker. In the movie, a bright young broker falls under the spell of a master market manipulator, the unscrupulous Gordon Gekko. Don’t expect fairness or balance in Stone’s film. Released in the heyday of Ivan Boesky and Michael Milken, Wall Street examines the harm that can result from unchecked greed. Despite its polemics, the movie illustrates a number of sound business practices and raises issues of personal and corporate ethics that can help you sort out your own approach to success in the world of high finance.
Excerpt from the plot summary:
Young Bud Fox (Charlie Sheen) is the son of an aircraft mechanic (played by his real-life father, Martin Sheen). Bud has chosen a career as a stockbroker. When we first see him, he is cold-calling clients to push his firm’s latest hot stock. He’s also trying to bring a new client to the firm: the illusive and legendary Gordon Gekko (Michael Douglas).
Bud has chutzpah, but can’t find a play interesting enough to get Gekko’s attention. Having no luck reaching Gekko by phone, he plans an assault on the great man’s office. Having marked Gekko’s birthday on his calendar, Bud takes Gekko a birthday present: a box of the coveted Cuban cigars Gekko is known to like. Bud gets his 15 minutes, though it’s interrupted by phone calls that Gekko answers with quick buy-sell orders. Gekko then criticizes the stocks Bud has touted and tells him he’s looking for something special, something no one else knows. Bud breaks a personal confidence from his father and passes along the news that Blue Star airlines has been vindicated in a long-running lawsuit. “Not even the plaintiffs know yet,” Bud boasts. He tells Gekko that the ruling will enable the company to upgrade its equipment and go after new routes, which they are certain to obtain. The information has been released to Blue Star by its attorneys and shared in confidence with the heads of its unions, one of whom is Bud’s father. It’s insider information and illegal as hell. Gekko is intrigued, tells Bud he’ll check it out and sends him out the door. Later in the day, Gekko places a large order for Blue Star through Bud.
Summary of the commentary:
Our commentary examines the art of the hostile takeover, Gekko-style. The Guide contrasts the destructive Gekko with his reformed nemesis Sir Larry Wildman. Wildman is anxious to find a takeover target he can revitalize, not strip. Gekko doesn’t care about revitalization, but he is vindictive enough to force his long-time rival to overpay for his dream by driving up the price of the stock (and making a good deal of money for himself in the process). Additional commentary looks at the role of the stock market in the economy, covers the difference between fundamental analysis and charting, examines market manipulation scams, goes over insider trading rules, and discusses the nature of business ethics and examines why experts can’t agree, in many cases, on whether some practices shown in the movie are ethical or not.
The commentary is supplemented by Breakout Boxes dealing with these topics:
- Right Idea, Wrong Application
- Wall Street’s Deals
- How Brokers Get Into Trouble
- A “Real” Life Parallel