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Having 51% control guarantees nothing.

I know a guy who had 51% in the family company. His retired dad had, in exchange for money, deprived the 51% shares of their voting power.

His dad then sold the shares on the local stock exchange.

A couple months later, his CEO/son was fighting a hostile takeover of the family-run, but publicly traded company.

So his son bought the 51% from the local stock exchange, thinking he had a majority.

The guy who owned the actual voting shares showed up at the annual shareholder meeting with attorneys and accountants , a small number of shares, and walked out with the keys to the company.




> I know a guy who had 51% in the family company. His retired dad had, in exchange for money, deprived the 51% shares of their voting power.

You are either leaving out some important details or this is just not accurate. When people say you need to have "51% of shares" to control a company it means that you need to control 51% of voting rights of shares (sometimes different share classes have different voting rights).

It would simply have been impossible for "his retired dad to have deprived the 51% shares of their voting power" if his dad didn't have voting control. So something just doesn't add up in this story.


> Having 51% control guarantees nothing.

Maybe. But something (literally) doesn't add up in the original story.

If the CEO had 51% and sold the 49%, there is no place for the PE firm to capture the 2%.

Unless there is convertible debt or some such thing. Or the story is overly-simplified in some other way.


The CEO did not have 51%.


If he had less than the PE firm from the get-go, then he was never in control.


Well ... how could you not inform yourself with that much money at stake.


Both legitimate mistakes and arrogant hubris are common enough, as are those who feel good about finding loophole, mistakes, and blind spots, and exploiting them.

Musk, for example, seems to me from what he says to enjoy exploiting the blind spots of other businesses; but he was counter-exploited into buying Twitter for way too much.




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