Big shot activist investors can potentially be a g
Post# of 75384
(Total Views: 471)
Posted On: 03/03/2017 3:04:33 PM
Big shot activist investors can potentially be a good thing in some cases, but there are important details that can make it go either way, good or bad. Some companies with very knowledgeable and experienced leadership often choose to go private once they no longer depend on public capital raises to fund ongoing efforts.
That's because they don't want all corporate decisions or strategies to be strong-armed by those who's only concern is maximizing short term profits. If they aren't qualified or they're blinded by their own greed, they can "step over a dollar to make a quick dime", or push management into bad situations because they weren't willing to listen, able to understand, or even necessarily care at all about the long term health of the company. To avoid this type of "back seat driving" they would often rather remove the problem altogether.
This company doesn't need whip cracking. It needs just what it just got, a wealthy partner, and time to implement their next moves. It's not going to happen overnight. Even for a well established and prosperous company, making moves into new markets, bringing new products to existing or new markets, or establishing new distribution channels will still take time, and that's assuming a company like that had many more employees and resources at their disposal to make it happen.
For a small company just about to enter their 3rd year of brand building, it's a no brainer that it'll take a little longer to accomplish. That's what's so great about the deal that was just sealed. The pace is about to broaden and quicken, so whip crackin isn't likely to fix what in this case isn't broken anyhow. We just need to be patient or, of course, find a faster way to get rich elsewhere.
That's because they don't want all corporate decisions or strategies to be strong-armed by those who's only concern is maximizing short term profits. If they aren't qualified or they're blinded by their own greed, they can "step over a dollar to make a quick dime", or push management into bad situations because they weren't willing to listen, able to understand, or even necessarily care at all about the long term health of the company. To avoid this type of "back seat driving" they would often rather remove the problem altogether.
This company doesn't need whip cracking. It needs just what it just got, a wealthy partner, and time to implement their next moves. It's not going to happen overnight. Even for a well established and prosperous company, making moves into new markets, bringing new products to existing or new markets, or establishing new distribution channels will still take time, and that's assuming a company like that had many more employees and resources at their disposal to make it happen.
For a small company just about to enter their 3rd year of brand building, it's a no brainer that it'll take a little longer to accomplish. That's what's so great about the deal that was just sealed. The pace is about to broaden and quicken, so whip crackin isn't likely to fix what in this case isn't broken anyhow. We just need to be patient or, of course, find a faster way to get rich elsewhere.
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