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Comment by dangoldin | Hacker News Reader

And that is a lesson to us all that we should have private companies.

Really? How does that follow?

I think he means you can't (AFAIK - please correct me) do a hostile takeover of a private company, at least not in the same manner. because in a privately owned company there are no public stockholders to appeal to; the owner and the manager of the business are one and the same.

Really though, what this really is is an example of why you should have a dual-class share system where there are "investment shares" and "voting shares", and investing doesn't give you automatic voting rights. Yahoo for some reason didn't have that, and it put the board especially at risk to hostile takeover.

Exactly. Founders tend to think that the holy grail is going public but then you'd have to worry about shareholders and short term growth.

It would be perfectly fine to stop right before going public and run the company the way you wanted.

Cargill is a private company with $67B in revenue in 2004 so it's not a question of generating the money (http://www.forbes.com/lists/2005/21/5ZUZ.html).

Founders want to go public to cash out, not because they want to run a publicly traded company. In fact, many leave the company after IPO.

I guess you have never heard of a reverse merger:

http://en.wikipedia.org/wiki/Reverse_takeover

http://reversemergerblog.com/

what part of the reverse takeover is hostile? The reverse takeover allows a private company to go public without an IPO by merging with a smaller public company.

Its not that its inherently hostile but it demonstrates one of the possible scenarios where private control can slip away with a majority of directors votes.

That's good to know. Thanks.

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