Musk vs Trump

[The Don]

It takes moments and a few dollars to create a new company with only selected board members under an umbrella, and one resolution to wind up a company and sell its assets to another. Then the "new" board minus the troublemaker can carry on. It's how bankrupts avoid owing anything to debtors.

I think if you tried that with a publicly listed company the SEC would come down on you like a ton of bricks - and quite rightly.

 

[Norman Alexander]

I think if you tried that with a publicly listed company the SEC would come down on you like a ton of bricks - and quite rightly.

Musk just did it with his own xAI start up...

 

[The Don]

Musk just did it with his own xAI start up...

Which is not a publicly listed company AFAIK so the SEC doesn't have a role to play.

AIUI as long as companies are entirely privately owned then you have significant scope to play around with the ownership structure but if they're publicly traded the options are much more limited.

 

[Norman Alexander]

Which is not a publicly listed company AFAIK so the SEC doesn't have a role to play.

AIUI as long as companies are entirely privately owned then you have significant scope to play around with the ownership structure but if they're publicly traded the options are much more limited.

When individual companies are under a holding company umbrella, where not all are public, all is fair game.

 

[The Don]

When individual companies are under a holding company umbrella, where not all are public, all is fair game.

Are you sure about that ?

That runs counter to my experience otherwise a boardroom coup could destroy shareholder value.

 

[P.J. Denyer]

I can see that XAI made an acquisition & restructured, but who was the shareholder cut out against their will?

 

[Norman Alexander]

Are you sure about that ?

That runs counter to my experience otherwise a boardroom coup could destroy shareholder value.

Which precisely what they are trying to achieve. A hostile removal of a large shareholder.

 

[Norman Alexander]

I can see that XAI made an acquisition & restructured, but who was the shareholder cut out against their will?

issuing new xAI shares to himself means he effectively moved X under xAI’s control while consolidating his ownership.

Sorry, lost that link but it was a finance site.

The other shareholders in Xitter were effectively reduced/removed. Musk has more control.

 

[P.J. Denyer]

I think we're conflating control & shareholding's here, if you have sufficient shares yourself or through the support of other share holders you can depose or replace board members or restructure the company, and in restructuring the company shareholders might agree (or if they don't have the necessary votes to stop it be forced) to dilute their shareholding in part of the organisation in exchange for a proportional shareholding in the larger one,which could amount to a loss of contro, if they had control in the first place, but it isn't the same as taking their shares away from them.

 

[The Don]

Sorry, lost that link but it was a finance site.

The other shareholders in Xitter were effectively reduced/removed. Musk has more control.

Both companies were privately owned at the time and so there was much greater scope for Musk to act and no need for SEC oversight.

 

[JayUtah]

Both companies were privately owned at the time and so there was much greater scope for Musk to act and no need for SEC oversight.

Now Elon Musk oversees the SEC, so here we are.

 

[Norman Alexander]

Both companies were privately owned at the time and so there was much greater scope for Musk to act and no need for SEC oversight.

The SEC was/is a toothless tiger. The conversations usually went like this:

We did this hostile takeover using this ruthless method.
No, you can't do that!
Well, we already have. Too bad.
.......ok, then.

 

[The Don]

The SEC was/is a toothless tiger. The conversations usually went like this:

We did this hostile takeover using this ruthless method.
No, you can't do that!
Well, we already have. Too bad.
.......ok, then.

Regardless of how toothless they are, I can't find an example of the scenario you've outlined for a publicly listed company - the assets and shares value being spirited away into a holding company with a different ownership structure.

Perhaps you can do so and X isn't an example because it, and ai were privately owned.

 

[Norman Alexander]

Ummm... Going from public to private happens often. Here's one example: Barnes & Noble

In September 1993, Barnes & Noble became a publicly traded company by issuing $77 million worth of stock on the New York Stock Exchange under the BKS ticker symbol. The company remained on the stock exchange until August 2019 when Elliot Management purchased all of the company's stock and took the company private.

On October 3, 2018, the board of directors announced that they would entertain offers to buy the company. Among the potential buyers was Leonard Riggio, who owned at the time approximately 19% of Barnes & Noble stock. As a result of the news, the company's stock price jumped by nearly 30%.

In August 2019, Elliott Investment Management acquired the company for approximately $683 million with James Daunt, the managing director of London-based Waterstones Booksellers Ltd., becoming CEO. James Daunt was to become CEO of both Waterstones and Barnes & Noble and was to relocate from London to New York. On August 7, 2019, Barnes & Noble became a privately held, wholly owned subsidiary of Elliott.

 

[The Don]

Ummm... Going from public to private happens often. Here's one example: Barnes & Noble

Yes, but that's not your scenario, and the shareholders are adequately compensated.

In your scenario the assets of the publicly listed company were transferred to a privately held holding company and the shareholders were not compensated for this by being given cash and/or shares in the holding company.

Here's your scenario:

It takes moments and a few dollars to create a new company with only selected board members under an umbrella, and one resolution to wind up a company and sell its assets to another. Then the "new" board minus the troublemaker can carry on. It's how bankrupts avoid owing anything to debtors.

I'd like you to provide an example of this happening to a publicly listed company where the existing shareholders haven't been compensated.

 

[Norman Alexander]

Yes, but that's not your scenario, and the shareholders are adequately compensated.

In your scenario the assets of the publicly listed company were transferred to a privately held holding company and the shareholders were not compensated for this by being given cash and/or shares in the holding company.

Here's your scenario:



I'd like you to provide an example of this happening to a publicly listed company where the existing shareholders haven't been compensated.

It's not about compensating shareholders. It's about a company ridding itself of shareholders it would rather not have, using restructuring as a tool. Restructuring can be very creative. For B&N, their board changed as a result of the transition from public to private. I'm sure the new board took that opportunity to remove people not considered necessary. If it took buying them out, so be it.

The point is that it is possible to maneuver out unwanted stockholders, such as Musk. He would not go away penniless. But he could be made to go away nonetheless...if someone had the balls to do it.

 

[dudalb]

Now Elon Musk oversees the SEC, so here we are.

If true, that the ultimate version lf putting Jesse James and John Dillenger in charge of bank security.

 

[jeremyp]

It's not about compensating shareholders. It's about a company ridding itself of shareholders it would rather not have, using restructuring as a tool. Restructuring can be very creative. For B&N, their board changed as a result of the transition from public to private. I'm sure the new board took that opportunity to remove people not considered necessary. If it took buying them out, so be it.

The process of taking a company private absolutely involves buying the shareholders out. At the start of the process the shareholders are the owners. You can't change the ownership without them selling their shares by definition. Some of them may buy into the new company, of course and you may even "buy" them out by offering them shares in the new company in exchange for their shares in the old company.

For public companies, though, there will be strict laws around what you can do, otherwise everybody would be doing it.

The point is that it is possible to maneuver out unwanted stockholders, such as Musk. He would not go away penniless. But he could be made to go away nonetheless...if someone had the balls to do it.

What do you mean by "manoeuvre out"? Musk has three distinct (well they should be distinct) roles in Tesla. He is the Chief Executive, he is a board member and he is a shareholder. The board can get rid of him as CEO. The share holders can get rid of him as a board member. The only way to get rid of him as a shareholder - and not everybody else - is to somehow force him to sell his shares. That would take billions of dollars and probably electrodes or other torture implements.

 

[Tero]

Every federal employee needs to be fired, unless elected. Those people can spend money on things like golf outings.

Watcher Guru (@watcher.guru) on Threads

JUST IN: 🇺🇸 Elon Musk says the US Government was "partying on taxpayer money."

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the hired people were all partying on tax payer money. No useful work done.

 

[Tero]

Musk brings in DOGE guy to Trump show meeting.

People Who Work (@deptofworkers) on Threads

It’s almost like when you try to fire hundreds of thousands of people, rip up their union contracts, and threaten the services people need across the country, a lot of people won’t like you. Who could have seen it coming?

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