Conversation

Jesse Powell
@jespow
Question for anyone holding stock. A private company has an offer from an investor to buy shares at X, which the company feels is 10% undervalued. However, the company knows of a shareholder (could be you or someone else) who would sell at a 20% discount. Should the company:
  • tell seller $offer, intro
    16.6%
  • broker midpoint + fees
    12.9%
  • prop buy low, sell high
    24%
  • see results
    46.5%
867 votesFinal results
11:46 PM · Nov 10, 2020Twitter Web App
2
Retweets
6
Likes
Jesse Powell
@jespow
In the prop scenario, the company buys at a 20% discount and sells at a 10% discount, making a 10% profit for the company.
You’re unable to view this Tweet because this account owner limits who can view their Tweets. Learn more
Arthur B. 🌮
@ArthurB
Replying to
@jespow
A counter-intuitive result of financial economics is that firms are natural market makers for their own stock. Not at all how capital markets are set up though.
2
Lira
@CryptoLira
Replying to
@jespow
Taking stock from weaker hands and giving it to stronger ones also protects the value held by all other stockholders Company makes a pretty penny on that too which further enriches shareholders, fiduciary duty
2
ohneka 🏴‍☠️
@ohneka_
Replying to
@jespow
Yes it may make sense if the company needs capital or that new investor (blackstone etc) expect to increase the profile of the company and make it really “institutional”