

Ask HN:Can I force a fortune 500 company to do business with me if I own stock? - mobl

It has always puzzled me to know if I own stock of a big company and myself own a business, can I use that to make the Big company do business with my not so big business?Would I need to buy more shares? How much is enough?
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brk
Think about how this would scale... Anybody could setup some lame business,
buy a few shares of stock in a handful or large organizations and 'force'
those companies to do business with them?

Sorry, but if you think this through, it's not even remotely logical.

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RobGR
No. Owning stock in a Fortune 500 company generally doesn't even give you a
vote, because those are "privileged" shares, or even a share in the profits of
the business (dividend).

Even in the case of a smaller company, operating according to how joint stock
companies are theoretically supposed to operate, this would generally not be
legal. The board and officers have a fiduciary responsibility to all the
shareholders, and they are not supposed to do something that benefits one
shareholders other interests while costing the others through inefficiency.

In a system where all investors where roughly equal, the loss from cheating
company the one company should roughly equal the benefit of the other, and
crime would not happen often.

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mahmud
If that were possible, commerce would run with the efficiency of a nepotistic
fiefdom.

Even if you held a controlling stake, the other shareholders might accuse you
of having a conflict of interest, and funneling funds to your private coffers.

 _Forcing_ is usually a bad idea in relationships; private and professional.

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GiraffeNecktie
Yes, if you own a controlling interest in the company you could probably make
it do pretty much anything within the law that you wanted (sucks to be a
minority shareholder sometimes) but then, if you did own the majority of
shares in a big company you are, by definition, a big player yourself.

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asanwal
Shareholders and the Board appoint people (aka management) to run a company.
Management has a fiduciary duty to do what is optimal for shareholders
(maximimize value). If your company will help management do that, they may
choose to work with you.

Owning shares has no direct influence as far as I can tell. Of course, owning
a lot of the company might give you a voice they'll listen to.

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carbocation
Do you own a controlling stake?

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mobl
No, but what if I did? Would that be different?

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carbocation
To be fair, this is outside of the realm of my knowledge, but I think so due
to the following:

Situation A: You own 10% of a company, and so does Joe Schmoe. You tell the
company to do business with Anvil Corp. Joe Schmoe tells the company _not_ to
do business with Anvil Corp. Who wins?

Situation B: You own 51% of a company. You tell it to do business with Anvil
Corp. The other 49% says no. Who wins?

I say this is outside of the realm of my knowledge because I'm no sure about
Situation B (I mean, I could see you still not winning in that situation given
your conflict of interest; it sounds like a question of corporate governance).

Taken to the extreme, one could buy one share of stock in a company and force
it into transactions with another; since this would be hugely beneficial to
that person, and since I don't see it happening in reality, I conclude that
it's not how things work.

Purely speculating here in order to give you things to think about, since
there were no comments; sorry if I'm totally wrong.

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hugh3
I assume there have to be limits to what a 51% stockholder can make a company
do. Otherwise I could do this move:

1\. Find a company with $100 million in assets

2\. Buy 51% of that company for, say, $60 million

3\. Force the company to pay $100 million for, say, a nicely framed copy of my
autograph.

The company dissolves, I pocket my $40 million, and the other 49% shareholders
get annoyed. I assume this is why there are various complicated laws governing
what companies can actually do, and why they're obliged to work on maximising
shareholder returns rather than anything else.

In answer to the original question, though: No, of course you can't, what on
Earth made you think you could?

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carbocation
Absolutely agreed that it can't be as simple as proposed.

I'm just saying that even if it _were_ that simple, well, you'd still have to
own 51%.

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hugh3
Of course. The OP is apparently off his damn rocker.

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bond
In which way doing business with you will help them?

