Quote:
Originally Posted by Rebo
I do recognize the fact that while Borders is in a worse dismal shape, with the help of a hedge fund, they can come up with the funding to take over a stronger rival. The problem of a public trading company is share holders like the hedge fund managers have no interest in the future of any company, any country or any people. Wall Street is littered with greed and short term profit takers. Classic healthy investment model is to cultivate a long term development plan for a company so share holders can benefit from the dividend, not solely on inflating and shorting based on stock prices. In the name of free trade, these hedge funds bought healthy companies, break them up or merge them, laid off the employees, outsource the work and destroy it bit by bit. In my opinion, Wall Street needs to be regulated to ban all short term trading.
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I sympathize, but I'm not sure how that might be managed.
Meanwhile, investors with no long term interest in the companies they hold are indeed a problem. There have been cases of management led leveraged buyouts to take the company private, precisely to avoid the issues of demands by shareholders whose interest extends as far as the next quarterly statement. (This can be a case of "out of frying pan, into fire", as the sources of funding for such buyouts have their own agendas.)
A good CEO thinks in terms of "Where do I want the company to be in 5 years? 10 years? 20 years?" His big challenge is dealing with a board of directors made up of shareholders representatives who don't share the long term view. One former CEO suggested always serving a heavy lunch before a board meeting, because it was a good assumption an older director would fall asleep during the meeting if you did so. No one would want to embarrass the old chap by waking him, but no important business could be transacted if he was asleep, so...
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Dennis