

Mounting cash piles an embarrassment of riches for tech companies - Futurebot
http://www.ft.com/intl/cms/s/0/63e60612-827c-11e3-8119-00144feab7de.html

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mikhailt
Can't read the article, behind a paywall.

However, it is not an embarrassment of riches IMO.

Look at what happened to RIM/Blackberry, Nokia, and so on. Tech titans can
fall at any given moment, and they are going to need to rely on that "war
chest" to get back up, to reinvent themselves.

Investors need to back off and let the companies handle things themselves.
They are investors, not advisors or owners, they need to mind their business.
They don't like what companies are doing, they can sell their shares and
invest into something else.

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greenyoda
" _They are investors, not advisors or owners_ "

Actually, the shareholders of a public corporation _are_ its owners. If a
wealthy investor like Carl Icahn bought up 51% of Apple's shares, he could
make it do pretty much anything he wanted: appoint his friends to the board,
fire the CEO, etc. Big institutional investors like state retirement funds
have lots of influence over companies, sometimes even seats on the board. And
if I bought just one share of Apple's stock, I could attend the annual
shareholders' meeting and vote on the issues presented there (or I could vote
by proxy).

Also, the management of a company has a fiduciary obligation to its
shareholders (owners). The shareholders can sue the management for breach of
this obligation, and if they can prove that holding billions of dollars in
cash is not in the best interest of the shareholders, they can force the
company to distribute it as dividends.

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waps
There's lots of problems with this theory :

1) buying 51% of most companies is not possible without approval from the
existing holders of power. The problem is that buying 51% of the shares
necessitates buying at least a few percent from the current power holders.

These power holders usually vote themselves some amount of stock so that they
can sell it for a comfortable lifestyle without dilution or with dilution
limited to the point they don't lose control.

2) Even the 1) ignores the different classes of stock. Stock with voting power
and stock without is part and parcel of the landscape these days and guess
whose power it protects ?

3) Fiduciary obligation ... really ? How does that work ? (aside from not
committing fraud and the like, which is really protected by other laws
already) Can you give examples of it in action ? Usually management protects
the stock price, for their own self-interest. They do not make sure
shareholders actually make money (which is how I'd interpret said obligation).

4) Even where the interests of stockholders and management/board are opposed,
I can name dozens of examples of where shareholders sues company cases were
decided in favor of management. When not involving fraud, I can name none
where shareholders prevailed.

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Encosia
Google the title and click through from the Google SERP to read without
registering:
[https://www.google.com/search?q=Mounting+cash+piles+an+embar...](https://www.google.com/search?q=Mounting+cash+piles+an+embarrassment+of+riches+for+tech+companies)

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fizx
Only shows the first paragraph. Flagged (the post, not this comment).

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Encosia
I just read the entire article by clicking through from the Google SERP, no
problem.

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carsongross
Wait wait wait.

You mean by "owning" a company, I might get some of the "profits"?

But how does this help the board of directors and the c-suite?

