Stock Project

Stock Project

Introduction

The three companies, Microsoft, Amazon and Bank of America can benefit the investors in many ways. The companies have potential risks, which could lead to loss. The investors willing to invest in the companies should consider both benefits and risks.  Microsoft supports a variety of products and services related to computing. This company is the largest company providing software services rated in terms of revenue. Amazon.com, Inc. has headquarters in Washington, America. It provides retail business online. It produces electronics to a wide market and also cloud computing services. The company has separate websites, which provides services to consumers in different countries and also offers shipping services. Bank of America Corporation is a bank providing financial services with headquarters located in North Carolina. Rating by assets, it emerges to be the largest bank in America. As per revenues the bank is the fifth largest company in America.

The Bank of America

There same reasons which make Bank of America preferred for investment. The company has acquired countrywide finance. In 2007, it announced a purchase agreement of countrywide finance of $ 2 billion. This purchase provided 7.25 % per annum as a return on finance. In 2008, the bank announced to buy countrywide finance at $4.1 billion. The acquisition of countrywide finance made Bank of America is the first provider of mortgage loan. This increased the sales volume and income. The second reason for investing in the bank is the operations. The bank generates about 90 % of revenue in the domestic market. The bank also buys business in America. The bank works to be the leading bank in the domestic market. The acquisitions have made the bank develop and serve a large market and investing with this bank grantees growth.

The third reason to invest in the Bank of America is the international operations. The bank provides financial services internationally. In 2005, it acquired 9 % stake in China with the China Construction Bank. This is the fourth biggest bank in China. Bank of America has offices in Shanghai, Hong Kong and many places in China. This bank operates in many countries like in Latin American countries it operates with the name BankBoston. The fourth reason to invest is the management system. The bank management practices ensure growth and expansion. The management team works to ensure success and prevent failure and collapsing. Management structures have changed many times in the last five years (Stephanie, 2012).

Though the bank can ensure success and growth of the investors there same challenges, which can bring up challenges. In 2010, the bank faced fraud charges. The government of America accused the bank of defrauding schools, hospitals, and state and local government. The bank was accused of fraudulently costing American taxpayers more than $ 1 billion while selling toxic mortgages to Freddie Mac and Fannie Mae. In 2008, the bank also notified the customers that their interest rate had doubled. It raised rates for customers without notice. There, many instances which the bank has been raising the rates without notification (Stephanie, 2012). The bank is risky because it can defraud investors or raise the payment rates without notification.

Microsoft Corporation

Investors with Microsoft enjoy many benefits. First Microsoft has been developing and introducing new products. The company introduces software which matches the technology. The second thing is the marketing strategies. The company promotes sales through the provision of cash rebates. Cash rebates encourage people to buy products because they know they will get a refund. This has increased the number of advertisers and users, which grantees increase in income. The management of the company also grantees progress and prevents failure and collapsing (Paul, 2010). The company also provides services to users all over the world. Microsoft products are sold and used in each country of the world. Investors have a grantee of growing as the company grows. Investors also have a grantee of multiplication of shares as the company’s income increases.

Investors can face the problem of increment of rates and charges. The company increases rates of sales without notice. This can make the investors run out of budget and fail to pay charges. The company has also been reported to obtain money to the online user and fail to provide the agreed services (Paul, 2010). This means that the company can also do the same to the investors.

Amazon.com, Inc.

Amazon has acquired many businesses from other users, and this ensures growth through the increase of income. It acquired, internet movie database, Accept.com and Alexa Internet among other business. The company has also invested in many businesses, which include Engine Yard in 2008 and Living Social in 2010. In order to grow, Amazon has established partnership with other merchants who ensure shipping services are provided to the customers (Tray, 2011). The company has many software development centers which attract customers from all continents.

The companies can collapse due to unethical operations, which include workers poor warehouse condition, price discrimination and rewarding customers to spy competitors. In 2012, the government of UK reported that Amazon avoided paying taxes along with Google and Starbucks. Some customers also report having paid and failed to receive their products. Amazon faces those controversies, and they can lead to failure leaving the investors to incur the loss (Tray, 2011).

Conclusion

The three companies, since they are multinational, they can ensure success and business development for the investors. The investors should consider both advantages and disadvantages before deciding the company to invest.