Friday, October 08, 2010

Fiudiciary Duties

When a corporation sells an asset, that corporation has a duty to it's shareholders to get the best possible price for the sale of that asset. If it fails to do so, the shareholders have the legal recourse to sue to stop the sale of that asset. Newsmax offered a bid to buy Newsweek from the Washington Post and were widely believed to have offered the most money for the publication. The Washington Post is a publicly traded company traded on the NYSE. WaPo, however decided to sell it to Sidney Harman, for exactly one dollar plus the assumption of outstanding debt. I think it is safe to say Newsmax offered much more than that. So my question to WaPo shareholders is, are you going to sit there and let them screw you like that? or are you going to fight this sale in order to get the maximum returns on your investment?

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