Headline: Do not let company founders hide from accountability
Sub-headline: Lyft’s dual class structure will prevent shareholders from having reasonable input
Recall Mr. Singer as the purchaser of Argentina’s bad debt? and the fact that Macri paid the ransom for re-admittance into the Free Market Club? as I recall 1.3 billion was the price tag! And less that a year and a half, with the peso in free fall, Macri applied and got an IMF bailout for his failing Austerity Lite: de Kirchner is waiting in the wings: the definition of ‘success’?
That bit of inconvenient ‘Economic History’ puts Mr. Singer’s plea for ‘shareholder accountability’ garnished with self-congratulation where? Examples here:
My firm, Elliott Management, frequently encounters technology companies where founders or longtime managers created remarkable innovations but then struggled with the challenges of maturing products, expanding organisations or slowing growth.
They often respond by aggressively seeking new sources of growth, paying richly for acquisitions that do not fit with their business models or allocating capital towards peripheral activities that fail to generate returns. Worse, such efforts often damage the core businesses that brought success in the first place.
Many companies are able to pull off these transitions without active shareholder involvement. But even at the most successful tech groups, allegations of privacy violations and other abuses have been most acute at companies such as Facebook and Google where dual-class structures are in place.
Those with the insight and daring to found a business deserve our respect. But once they sell the vast majority of the company to the public, they should not be allowed to run it forever without any shareholder input. Public ownership must mean public accountability.
My selection of quotations is self-serving, but not anymore self-serving than Mr. Singer’s whole argument,that Capitalism, and its companies need investors like himself to keep them ‘honest’! Public Ownership and Public Accountability under the leadership of Vulture Capitalists like Singer is the sine qua non of Capitalist Virtue.