Badwill

DEFINITION of 'Badwill'

The negative effect felt by a company when shareholders and the investment community find out that is has done something that is not in accordance with good business practices. Although typically not expressed in a dollar amount, badwill can play out in the form of decreased revenue, loss of clients or suppliers, loss of market share and federal indictments for any crimes committed.

BREAKING DOWN 'Badwill'

There are several cases in which badwill caused a severe downturn in company stock, such as Tyco, Adelphia, Martha Stewart, Enron and Worldcom. In each new bull market, we are likely to see the same offenses committed by new people. This phenomenon has caused a rise in "socially conscious" investing, where companies promoting badwill are excluded as a matter of policy.

RELATED TERMS
  1. ImClone - IMCL

    A publicly-traded biotechnology company marketing products in ...
  2. Computer Crime Insurance

    An insurance policy that provides protection from crimes committed ...
  3. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  4. Business Crime Insurance

    An insurance policy that companies purchase to ensure protection ...
  5. Enron

    A U.S. energy-trading and utilities company that housed one of ...
  6. Enroned

    A slang term for having been negatively affected by senior management's ...
Related Articles
  1. Personal Finance

    How Martha Stewart Built a Media Empire

    A look into how Martha Stewart took her home-based catering business and turned it into a billion dollar media empire.
  2. Investing

    Community Investing 101

    Discover a type of socially responsible investing that helps to contribute to noble causes close to home.
  3. Investing

    The Biggest Stock Scams Of All Time

    Where there is money, there are swindlers. Protect yourself by learning how investors have been betrayed in the past.
  4. Investing

    Can You Count On Goodwill?

    Carefully examine goodwill and its sources before considering the value of your investment.
  5. Investing

    Enron: The Fall Of A Wall Street Darling

    Enron is a classic example of greed gone wrong and how investors were led astray.
  6. Financial Advisor

    Manage Your Clients' Expectations

    You can't control how they react to the market, but you can help them understand the reality of the situation.
  7. Investing

    Who is a Shareholder?

    A shareholder is a person, company or other entity that owns at least one share of a company’s stock.
  8. Financial Advisor

    Keeping Clients Through Good And Bad Times

    If you work in the financial industry, the secret to keeping clients happy is to be consistent.
  9. Markets

    Why Do Companies Care About Their Stock Prices?

    Read on to learn more about the nature of stocks and the true meaning of ownership.
  10. Investing

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
RELATED FAQS
  1. Why did Tyco's financial statements attract the SEC's attention in 2002?

    Editor's Note: This information is accurate as of September 2008.Hot on the heels of the Enron bankruptcy, ominous rumblings ... Read Answer >>
  2. How did corporate ownership almost lead to the ruin of Adelphia in 2002?

    John Rigas incorporated the cable company he'd grown from a $300 investment into Adelphia Communications. "Adelphia" is a ... Read Answer >>
  3. How does lack of corporate social responsibility hurt a company's bottom line?

    Learn about the perils of a lack of corporate social responsibility. Examine the WorldCom fraud, which led to its bankruptcy ... Read Answer >>
  4. Does increasing health consciousness among consumers make investing in fast food ...

    Examine the effect of increased health consciousness on fast food companies, and learn metrics investors can use to determine ... Read Answer >>
  5. How does revenue sharing work in practice?

    Take a look at some of the several different iterations of revenue sharing, the practice of distributing operating profits ... Read Answer >>
  6. What can cause the rate of return to be negative?

    Learn how poor company or sector performance, economic turmoil and inflation can cause the rate of return on an investment ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center