In the 1980s, corporate raiders began mounting unfriendly takeovers of companies that could deliver higher returns to their shareholders - if they abandoned their other stakeholders.
Sentiment: NEGATIVE
As president of the International Brotherhood of Teamsters, I have seen private equity firms plunder company after company, taking rich fees for themselves and cutting costs until there's nothing left to cut. Time and again I've seen their reckless behavior drive companies to declare bankruptcy.
I have seen the Raiders develop into what they are today.
Some managements do not even think of buybacks as an option. The idea of shrinking their equity base repels them. Their inclination instead is to get bigger, and this often leads them to pay rich prices for acquisitions that never earn their keep.
Everyone has the idea of owning good companies. The problem is that they have high prices in relations to assets and earnings, and that takes all of the fun out of the game.
Whenever you look at any potential merger or acquisition, you look at the potential to create value for your shareholders.
Companies, to date, have often used the excuse that they are only beholden to their shareholders, but we need shareholders to think of themselves as stakeholders in the well being of society as well.
The Raiders moved from Oakland to Los Angeles, didn't like it, didn't get along. Whatever it was, moved back to Oakland.
In confusing stock options with ownership, corporations confuse trappings with substance.
Most phenomenal startup teams create businesses that ultimately fail. Why? They built something that nobody wanted.
Shareholders share in the downside and not necessarily in the upside; that's the whole story.
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