"Tesla minority shareholder launches stillborn bid to take out the chairman of the company"
I'm not sure if this attempt is just a pathological need to show off or just some MBAtitis.
Activist investors are an annoyance of public companies.
I'm not sure if this attempt is just a pathological need to show off or just some MBAtitis.
Activist investors are an annoyance of public companies.
If you own shares of a company, you have certain rights, and I don’t see anything wrong with making use of them.
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> * If you don’t want other people to have a say in your company, why would you make it public?*
It's a trade-off. You get money in return for greater public transparency and oversight. You don't have to like it to see the need to go for it.
Say you buy a car with someone, you'll use it for 80% of the time, and the other person would use it for the remaining 20%
Would you agree if the other owner would spend his 20% driving recklessly, redlining the engine just because the car is his?
And in public companies you don't even get to pick who is buying that minor percentage
Activist investors aren't always wrong. It may have lead to Ballmer's ouster at MS for example. Or earning Dell shareholders more money when Mr. Dell took it private.
https://www.forbes.com/sites/nathanvardi/2013/09/03/valueact...
This a complex topic so I won’t fully develop the point but I can see a rational basis for CEOs to not treat their companies as a “shared” resource and I would argue that when an investment is made in a company there is an implicit understanding that you are being invited to participate in the economic opportunity but not so much in the control.
To work off your analogy, it is akin to “going along for the ride” as opposed to sharing the car. Yes, you own 20% of the car but you agreed that someone else would do the driving and chart the course. If you don’t like the way they are driving, get out and hop into another car. I think it is a bit much to be a minority investor and expect the entire operation to retool when that is a significantly more expensive proposition for the company than it is for you to simply exit the position and buy someone else’s stock.
Again, I am not totally confident in this view...
This kind of ownership is much closer to lending money to someone. While they are technically owners, emotionally speaking the arrangement is much more as if Elon Musk owns the company and the "owners" lent him money.
Elon Musk is the person who has built the company and spent a considerable amount of time working in it, putting his heart and soul into the company. An investor can jump in at any time and become an "owner". Does not mean an investor has the same emotional attachment to the company.
Say you build a house with lots of efforts over many years and live there for decades. To pay the bills you sell ownership shared in the house to investors. What happens to that house is going to matter a lot more to you than the investor.
It is not without reason that family run companies often outperform stock owned companies. When you have an attachment to a company beyond mere short term profit, that is a stronger bond.
No it isn't. It's 'fractional ownership', a mechanism designed to defray the risks of a single venture across multiple people because the risks were larger than any single individual could bear. The case that created it was the India runs with ships that could carry more valuable cargo than any individual could afford to buy or insure.
Spreading that risk through fractional ownership eventually led to the stockmarket. So it absolutely not at all like lending someone money.
What you are talking about are the concrete technical differences. We have no disagreement on those.
From the perspective of a person starting a company, he has to decide how to obtain money for building the company. He can borrow or he can issue stocks. Both methods give him money. The difference is in how the risk is spread and how the benefits are spread.
The person starting a stock company can't pay profits to himself without also doing so in equal measure to other stock owners. With the bank he only has to pay the interest on the loan.
Investor = owner
If anything, that should be more true when dealing with most investors in public companies, not less.
Most likely, the guy is just highly concerned about what's going on with the company. He may be in danger of losing a lot of money.
Bubblicious times can end suddenly, any moment now.
Yes, you may have seen people saying that for several years. That doesn't mean it's not true.
Silicon Valley mentality, right there.