Thursday, December 20, 2012 9:50:46 AM
Motivations for Going Private
Investment banks, financial intermediaries and senior management build relationships with private equity in an effort to explore partnership and transaction opportunities. As acquirers typically pay at least a 20-40% premium over the current stock price, they can entice CEOs and other managers of public companies - who are often heavily compensated when their company's stock appreciates in value - to go private. In addition, shareholders, especially those who have voting rights, often pressure the board of directors and senior management to complete a pending deal in order increase the value of their equity holdings. Many stockholders of public companies are also short-term institutional and retail investors, and realizing premiums from a take-private transaction is a low-risk way of securing returns. (To read about privatization on a massive scale, check out State-Run Economies: From Public To Private.)
Read more: http://www.investopedia.com/articles/stocks/08/public-companies-privatize-go-private.asp#ixzz2FbTweYMF
It may be something down the road but I think that insiders would benefit many times more by the value generated by sales and certs then up goes pps to pennies+. jmho eom
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