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Comment by tinus_hn | Hacker News Reader

Is that actually true? It sounds like a loophole would be possible: create a shell company that buys the shares instead so you can control the votes that belong to these shares.

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Shares that are bought back by a company are destroyed. Thus, increasing the value of the remaining shares.

I’d be interested in the mechanics of how that works. I understand buying and selling of shares, but do you just got it the exchange and tell them you want the shares destroyed or?

I shit you not somebody writes "canceled" on the paper shares and moves them to a separate holding area.

But what if they are bought by another company? That the original company controls?

That doesn’t reduce share counts.

Shares that are bought back, buy back ownership of the company though, no?

If in a trivial example, they buy back all the shares but 1.

Would the person holding that last 1 share have suddenly 100% of Apple?

Don’t forget they can’t buy shares without someone selling them. So if they have bought so many shares back there’s only 2 left, these two people each control 50% of the company and aren’t going to sell that share (for a small amount)

>Would the person holding that last 1 share have suddenly 100% of Apple?

Yes!

Of course, unless the shell company is completely outside of the control of Apple. Which would then beg the question, how are you going to get money into that shell company without upsetting the shareholders.

If that shell company would be owned by Apple, it implies the outstanding shareholders would own that company, including all the shares it holds in Apple, too.

Yes, but if that shell company owns more than half the shares, the shareholders can’t decide anything because they would always be the minority.

The shareholders own the shell company. It doesn’t change a thing.

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