“If I own stock in your company and you move offshore for tax reasons,” wrote billionaire investor Mark Cuban on Twitter, “I’m selling your stock. There are enough investment choices here.” Cuban’s warning came on top of the Obama administration’s announcement that it is exploring ways to prevent companies from moving their tax base overseas to avoid paying US taxes–a practice called “tax inversion.”
At least one company is heeding Cuban’s and Obama’s threats–Walgreens. The American drugstore chain was perfectly positioned for a tax inversion after it announced it would acquire the rest of giant European pharmacy retailer Alliance Boots. But the announcement also contained the news that Walgreens is staying put–the Chicago-based company will NOT move its tax home overseas. Walgreens shares took an initial hit, but growing public sentiment against tax inversions–especially for a consumer-facing company like Walgreens–may have eventually proved an even bigger drag on share price.
If I own stock in your company and you move offshore for tax reasons I’m selling your stock. There are enough investment choices here
— Mark Cuban (@mcuban) July 25, 2014