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At Swarthmore College, Longest Ever Divestment Sit-In Ends on Hopeful Note


At Swarthmore College, Longest Ever Divestment Sit-In Ends on Hopeful Note

Deirdre Fulton, staff writer

The longest and largest ever sit-in for fossil fuel divestment ended on Monday, after Swarthmore College students secured two major victories—a commitment from the institution's Board of Managers to engage in dialogue over pulling its holdings from oil, gas, and coal companies, and a faculty resolution formally recommending divestment.


Did you read these children’s “divestment proposal”? Not only do they want the university endowment to voluntarily give up high dividend equities, but they also want the endowment to invest 1% of its assets into low yield schemes. I haven’t read the endowment’s charter, but I’m pretty sure the trustees are directed to maximize the growth opportunity for the endowment, and doesn’t provide for funding “community development financial institutions and revolving loan funds”.

The kids apparently don’t understand equity valuation, either. Sure, if enough institutions put their shares of a single company up for sale at exactly the same time, it would cause a temporary depression of the stock PRICE, but not the stock VALUE. The value of the stock, which makes it attractive to another purchaser, is based on fundamentals of the business, the relationship of the share price and the company’s earnings, and historic dividend payouts. None of these things are affected by a divestment action. In fact, the temporary price drop of the stock makes it an even better bargain for other purchasers.

As long as oil and gas companies continue to be profitable and continue paying significant dividends, then there will always be someone standing ready to take advantage of a university that is wants to sell their shares. The hope of stigmatizing oil companies to the point that no one in the world is willing to buy the shares and take the dividends is simply a pipe dream.